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    Scope 1 and 2 emissions explained: definitions, examples and how to calculate them

    Scope 1 emissions come from sources your company owns or controls, such as gas boilers, company vehicles and refrigerant leaks. Scope 2 emissions come from the electricity, heat, steam or cooling you buy. You calculate both by multiplying activity data, like kWh or litres, by an emission factor, then report Scope 2 two ways: location-based and market-based.

    Last updated 30 October 2026 · By Tom Wilford, Founder, Ella

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    What are Scope 1 and 2 emissions?

    The GHG Protocol Corporate Standard splits a company's greenhouse gas emissions into three scopes so that two companies never count the same tonne in the same scope. Scope 1 covers direct emissions from sources you own or control. Burn gas in your boiler, diesel in your vans or let refrigerant leak from your air conditioning, and that is Scope 1. Scope 2 covers indirect emissions from the generation of energy you buy and consume: purchased electricity, heat, steam and cooling. The emissions physically happen at the power station, but they exist because you used the energy, so they sit in your inventory. Everything else in your value chain, from purchased goods to business travel in someone else's vehicle, is Scope 3. We cover that in our guide to the 15 Scope 3 categories.

    Scope 1 vs Scope 2 vs Scope 3: the difference at a glance

    Most people get stuck on edge cases, so here is the quick version with the sources we see most often in UK companies.
    Scope 1 vs Scope 2 vs Scope 3: the difference at a glance
    Scope 1Scope 2Scope 3
    What it coversDirect emissions from sources you own or controlIndirect emissions from energy you buyAll other indirect emissions in your value chain
    Typical sourcesNatural gas boilers, company cars and vans, generators, refrigerant leaks, on-site process emissionsGrid electricity, district heating, purchased steam or coolingPurchased goods, freight, business travel, employee commuting, waste, use of sold products
    Typical dataGas meter readings, fuel cards, fleet mileage, F-gas service logsElectricity and heat bills, half-hourly meter data, supplier fuel mix, REGO certificatesSpend exports, supplier data, travel bookings, surveys
    Required by SECR?YesYesOnly some transport, such as business mileage in employee cars where the company pays for fuel
    How hard to measureUsually straightforward once you find the data ownersStraightforward, with one choice to make on location vs market-basedHardest: mostly supplier and spend data

    Scope 1 emissions examples

    The Corporate Standard groups Scope 1 into four types of activity. In practice, most office-based and service companies only have the first two and the fourth. 1. Stationary combustion: gas or oil burned in boilers, furnaces and generators you control. 2. Mobile combustion: fuel used in vehicles your company owns or leases and controls, such as pool cars, vans and HGVs. 3. Process emissions: emissions released by chemical or physical processes, for example in cement or chemicals manufacturing. 4. Fugitive emissions: leaks of refrigerant gases from air conditioning and refrigeration, and other unintended releases. Refrigerants catch people out. A single top-up on an air conditioning unit can carry a large footprint because some refrigerants have global warming potentials in the thousands. If your landlord maintains the units, you still need the service logs.

    Scope 2 emissions examples and the two methods

    Scope 2 is mostly grid electricity, plus heat, steam or cooling bought from a third party such as a district heat network. The GHG Protocol Scope 2 Guidance (2015) asks companies to report Scope 2 in two ways: 1. Location-based: uses the average emission factor of the grid where you consume the electricity. In the UK that is the government's UK electricity factor. 2. Market-based: uses the emission factor tied to the electricity you have contracted for, for example a supplier-specific fuel mix or a renewable tariff backed by Renewable Energy Guarantees of Origin (REGOs). Contractual instruments must meet the Guidance's eight Scope 2 Quality Criteria. Show both numbers side by side. Buyers, CDP and auditors increasingly look at the location-based figure to check that a low market-based number is backed by more than certificates. The GHG Protocol consulted on revisions to the Scope 2 Guidance between 20 October 2025 and 31 January 2026. The proposals keep dual reporting and add hourly matching and deliverability requirements for the market-based method. Check the final text on the GHG Protocol website before you change how you buy power.
    Scope 2 emissions examples and the two methods
    Location-basedMarket-based
    Emission factorAverage grid factor for the country or regionSupplier, tariff or certificate-specific factor
    UK sourceDESNZ UK electricity conversion factorSupplier fuel mix disclosure, REGOs, PPAs
    What it tells youYour footprint given the grid you actually draw fromThe effect of your energy purchasing choices
    Common pitfallUsing last year's factor for this year's dataClaiming zero without valid certificates for every kWh

    How to calculate Scope 1 and 2 emissions, step by step

    The arithmetic is simple: activity data multiplied by an emission factor gives kg CO2e. The work is in getting complete, evidenced activity data. 1. Set your organisational boundary. Pick operational control, financial control or equity share and apply it to every site, vehicle and subsidiary. 2. List every Scope 1 and 2 source: each meter, gas supply, vehicle, generator and air conditioning unit. 3. Collect activity data for the reporting year: kWh from electricity and gas bills or meter data, litres or miles from fuel cards and fleet records, kg of refrigerant topped up from service logs. 4. Fill gaps with a documented estimate. For a site with no gas bill, floor area multiplied by a published energy benchmark is a defensible fallback, as long as you flag it as an estimate. 5. Apply the right factors. For UK activity, use the UK government GHG conversion factors for the year your activity took place. 6. Calculate Scope 2 twice, location-based and market-based. 7. Keep the evidence. Every number should trace back to a bill, meter read or log, with the factor and its version recorded next to it.

    2026 UK emission factors for the most common sources

    The Department for Energy Security and Net Zero (DESNZ) published the 2026 UK government GHG conversion factors on 11 June 2026. Many people still call them the DEFRA factors. These are the headline factors most UK companies use for Scope 1 and 2. The UK electricity factor fell by about 26% compared with the 2025 set, partly because DESNZ changed the method to cut the data lag from two years to one. If your electricity emissions dropped this year without any change in use, that is the main reason. We explain what to do about it in our blog on the 2026 DEFRA emission factors.
    2026 UK emission factors for the most common sources
    SourceScopeUnit2026 factor (kg CO2e)
    UK grid electricity (generated)Scope 2per kWh0.13096
    Natural gasScope 1per kWh (gross CV)0.18231
    Natural gasScope 1per cubic metre2.02633
    Diesel (average biofuel blend)Scope 1per litre2.58354
    UK electricity transmission and distribution lossesScope 3per kWh0.01299

    Where Scope 1 and 2 reporting goes wrong

    From our sales calls, the maths is rarely the problem. A recent prospect described their starting point as basic carbon footprinting, Scope 1 and 2, and their first question was whether we had a checklist of what data they would need. That is the right question. The usual failure points are: 1. Missing sites. Small offices on a landlord's service charge often have no electricity bill in your name. 2. Missing refrigerants. Nobody asks facilities for the F-gas log until the auditor does. 3. Fuel cards that mix business and personal mileage. 4. A market-based zero with no REGO evidence behind it. 5. Estimates with no label, so nobody knows which numbers to improve next year. Our view: track the share of each category that is estimated. A single blended confidence score for the whole footprint tells you nothing about where to fix your data.

    How Ella calculates Scope 1 and 2 emissions

    Ella is AI-native carbon accounting software built as an agent, and its carbon tool is the most guided on the market. It sets your boundary from how your business operates and builds your Scope 1 to 3 checklist straight away, so you know which meters, vehicles and units to collect for. Ella then does the collection. It sends collect links to the data owners at each site, chases missing responses and tracks what is still outstanding. Your team can drag and drop electricity bills, gas bills, fuel card statements and spend exports, and Ella reads them, applies the correct DESNZ factor and calculates activity-based and spend-based emissions automatically, with the source attached to every number. The output is an audit-ready Scope 1 and 2 inventory with location-based and market-based Scope 2, an SECR summary, and a reduction and net zero roadmap, backed by expert support from Ella's sustainability team.

    How Ella helps

    Carbon accounting software

    Guided Scope 1 to 3 footprint with automatic data collection, DESNZ factors and an audit trail on every number.

    ESG reporting software

    Turn your carbon data into CSRD, VSME and CDP-ready reporting without rebuilding spreadsheets.

    ESG strategy software

    Set targets and a reduction roadmap from your Scope 1 and 2 baseline.

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    Frequently Asked Questions

    What are Scope 1 and 2 emissions in simple terms?

    Scope 1 is the greenhouse gas your company releases directly, for example from gas boilers, company vehicles and refrigerant leaks. Scope 2 is the emissions from producing the electricity, heat, steam or cooling your company buys and uses.

    What is the difference between Scope 1 and Scope 2 emissions?

    Scope 1 emissions happen at sources you own or control. Scope 2 emissions happen at someone else's power station or heat plant but are caused by the energy you purchase. Burning gas on site is Scope 1; using grid electricity is Scope 2.

    Is electricity Scope 1 or Scope 2?

    Purchased grid electricity is Scope 2. Electricity you generate yourself by burning fuel, for example in an on-site diesel generator or gas CHP, puts the fuel combustion in Scope 1. Grid transmission and distribution losses are reported in Scope 3.

    Are company cars Scope 1 or Scope 3?

    Fuel used in vehicles your company owns or leases and controls is Scope 1. Business mileage in employees' own cars, often called grey fleet, is Scope 3 business travel, although SECR asks UK companies to include it in their energy and emissions disclosure.

    How do you calculate Scope 2 emissions?

    Multiply the kWh of electricity you used by an emission factor. For the location-based figure, use the grid average, such as the 2026 UK factor of 0.13096 kg CO2e per kWh. For the market-based figure, use your supplier or contract-specific factor.

    What is the difference between location-based and market-based Scope 2?

    Location-based uses the average carbon intensity of the grid you draw from. Market-based reflects the electricity you have contracted for, such as a renewable tariff backed by REGOs. The GHG Protocol asks companies to report both.

    Which emission factors should UK companies use for Scope 1 and 2?

    Most UK companies use the UK government GHG conversion factors published each June by DESNZ, still widely called the DEFRA factors. Use the set that matches the year your activity took place and record which version you used.

    Do I need to report Scope 1 and 2 emissions?

    In the UK, quoted companies and large unquoted companies and LLPs must report Scope 1 and 2 emissions under SECR. Many other companies report them because customers, CDP, EcoVadis or public sector tenders under PPN 006 ask for them.

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