Greenhouse gas emissions
Scope 1, 2 and 3 explained for companies and suppliers.
A clear explanation of the three GHG scopes, with practical manufacturing examples and the company perspective kept explicit.
Quick answer
The scope depends on the reporting company.
Scope 1 covers direct emissions from sources owned or controlled by the reporting company. Scope 2 covers indirect emissions from purchased or acquired electricity, steam, heat and cooling consumed by the company. Scope 3 covers other indirect value-chain emissions.
The same physical emission can sit in different inventories depending on whose perspective is being reported. A supplier's Scope 1 emissions can be part of a customer's Scope 3 inventory.
Scope 1 is direct.
Natural gas in a company boiler, diesel in controlled vehicles or refrigerant loss from controlled equipment.
Scope 2 is purchased energy.
Electricity, steam, heat or cooling generated outside the company but consumed by the reporting company.
Scope 3 is value chain.
Other indirect upstream and downstream emissions, structured into 15 GHG Protocol categories.
Perspective matters.
Scopes are assigned from the reporting company's boundary, not from a universal label attached to the activity.
What does Scope mean in greenhouse gas accounting?
The Greenhouse Gas Protocol uses Scope 1, Scope 2 and Scope 3 to classify a company's greenhouse gas emissions. The structure helps show whether emissions come from direct sources, purchased energy or the wider value chain.
A corporate greenhouse gas inventory is normally reported in CO2e, because several greenhouse gases can be converted into carbon dioxide equivalents.
- CO2
- CH4
- N2O
- HFCs
- PFCs
- SF6
- NF3
The three scopes describe the relationship between the reporting company and the emission source.
Scope 1: direct emissions from owned or controlled sources.
Scope 1 includes direct greenhouse gas emissions from sources owned or controlled by the reporting company.
For a manufacturer, Scope 1 often starts with combustion sources, company vehicles and refrigerants. Direct process emissions may also exist in some sectors, but they should not be assumed for every company.
Stationary combustion
Natural gas or other fuels in boilers, furnaces, burners, production equipment or generators.
Mobile combustion
Fuel used in owned or controlled cars, vans, trucks or other operating vehicles.
Fugitive emissions
Refrigerant losses from air-conditioning, cooling, heat pump or production refrigeration systems.
Process emissions
Direct emissions from certain physical or chemical production processes, where they actually occur.
Scope 2: emissions from purchased energy.
Scope 2 covers indirect emissions from the generation of purchased or acquired electricity, steam, heat or cooling consumed by the company.
The company does not emit directly at its own site when grid electricity is generated elsewhere. But the company consumes the energy, so the generation emissions are treated as Scope 2.
- Purchased electricity for production machines, lighting, compressors, IT and buildings
- Purchased heat for offices or production spaces
- Purchased steam or cooling where relevant
- Location-based Scope 2 using grid or regional emission intensity
- Market-based Scope 2 where suitable contractual instruments and supplier information apply
Purchased electricity is not Scope 3 just because the power plant is outside your company.
Scope 3: other indirect value-chain emissions.
Scope 3 covers other indirect emissions in the reporting company's upstream and downstream value chain that are not Scope 2.
For a manufacturing company this can include purchased materials, capital goods, external transport, waste treatment, business travel, employee commuting, processing of sold products, use of sold products and end-of-life treatment.
Scope 3 is not simply 'all supplier emissions'. It is the reporting company's value-chain inventory.
The 15 Scope 3 categories give the value chain structure.
The GHG Protocol Scope 3 Standard groups value-chain emissions into eight upstream and seven downstream categories. Not every category applies to every company.
The categories are the full framework. Relevance depends on the business model.
Upstream categories 1-4
Purchased goods and services, capital goods, fuel- and energy-related activities not included in Scope 1 or 2, and upstream transportation and distribution.
Upstream categories 5-8
Waste generated in operations, business travel, employee commuting and upstream leased assets.
Downstream categories 9-12
Downstream transportation and distribution, processing of sold products, use of sold products and end-of-life treatment of sold products.
Downstream categories 13-15
Downstream leased assets, franchises and investments.
The same emission can be Scope 1 for one company and Scope 3 for another.
A steel producer burns natural gas. For the steel producer, those direct emissions are Scope 1. A machine builder that buys the steel may treat associated upstream material emissions as part of Scope 3 Category 1.
This is not automatically a double-counting error inside one inventory. Scope classification is made from the perspective of each reporting company.
Supplier perspective
Your Scope 1 and Scope 2 can become relevant input to your customer's Scope 3.
In customer questionnaires, the field label is not enough.
If a customer asks for Scope 1, do not enter a full carbon footprint. If a customer asks for Scope 2, check whether location-based, market-based or both methods are requested.
If a customer asks for Scope 3, clarify whether it wants a total, selected categories, a screening, a product-specific input or a supplier corporate inventory.
- Which legal entity or site is in scope?
- Which reporting period applies?
- Which scopes and categories are requested?
- Which method and emission factor source were used?
- Is supporting evidence or a calculation workbook required?
Current rules and future standard development should stay separate.
GHG Protocol and ISO are working toward a harmonised global Corporate Standard. Current rules should stay separate from proposed or future developments.
The official July 2026 update describes a consolidated public consultation planned for Q2 2027 and a final harmonised Corporate Standard planned for Q4 2028. Drafts and proposals should not be presented as already applicable requirements.
For a calculation today, use the currently applicable methodology and document boundary, data, factors, methods and assumptions.
From concept to data
Know the scopes, but still missing the numbers?
Send the customer request or available energy and emissions data. We can identify which scope is being asked for, structure the source data and prepare a traceable response for internal review.
FAQ
Frequently asked questions
What is the difference between Scope 1, Scope 2 and Scope 3?
Scope 1 is direct emissions from owned or controlled sources. Scope 2 is indirect emissions from purchased electricity, steam, heat or cooling. Scope 3 is other indirect value-chain emissions.
Is electricity Scope 2?
Purchased or acquired electricity consumed by the reporting company is generally part of Scope 2. Current guidance distinguishes location-based and, where applicable, market-based accounting.
Does every company need to calculate Scope 3?
Not for the same reason in every context. Scope 3 may be required by a customer, reporting framework, programme, bank or climate target, but the need and depth depend on the reporting context.
Can the same emission appear in two companies' inventories?
Yes. Scopes are assigned from the reporting company's perspective. A supplier's direct emissions can be relevant to a customer's value-chain inventory.