Scope 1, 2 and 3 emissions explained (CO2 Performance Ladder)
Scope 1, 2 and 3 split an organisation’s CO2 emissions by source. Scope 1 is direct emissions from sources you own, such as diesel in your vans. Scope 2 is the emissions from purchased energy, such as electricity. Scope 3 is all other emissions in your chain, from purchased materials to the use of your products. The classification comes from the GHG Protocol , the global standard for carbon accounting. The CO2 Performance Ladder uses the same classification, but it sets out per level or step which scopes you must measure. For how to calculate the figures, read calculating your CO2 footprint.
Short answer: scope 1 = what you burn or emit yourself. Scope 2 = the emissions from generating the electricity and heat you buy. Scope 3 = the emissions of others in your value chain, split across 15 categories. For level 3 or step 1 of the ladder, you mainly measure scope 1 and 2. From level 4 or step 2, scope 3 is added.
On this page
Definitions and examples side by side.
The three scopesCalculating location-based and market-based.
Scope 2: two methodsUpstream and downstream with examples.
The 15 scope 3 categoriesScopes per level and per step.
What the ladder requiresScope 1, 2 and 3: the difference in one table
| Scope | What it is | Examples for a contractor | Where you get the data from |
|---|---|---|---|
| Scope 1 | Direct emissions from sources you own or control | Diesel in your own excavators and vans, natural gas for heating, refrigerant leaks | Fuel cards, fuel receipts, gas bills, maintenance logs |
| Scope 2 | Indirect emissions from purchased electricity, heat, steam or cooling | Electricity at the office and on site, district heating | Energy bills, meter readings |
| Scope 3 | All other indirect emissions in the value chain, upstream and downstream | Production of purchased concrete, transport by suppliers, employee commuting, waste processing | Purchasing data, supplier data, LCAs, estimates |
A handy rule of thumb: for scope 1, the emissions come from your own exhaust or chimney. For scope 2, they come from the chimney of the power plant that makes your electricity. For scope 3, they come from the exhaust or chimney of someone else in your chain.
A leased car or leased machine that you control counts as scope 1 for most organisations. A hired subcontractor with their own equipment falls under scope 3. Record your choice in your organisational boundaries, so the auditor can see how you set the boundary.
Scope 2: location-based and market-based
According to the GHG Protocol Scope 2 Guidance , you calculate scope 2 in two ways.
| Method | How it works | Effect of green electricity |
|---|---|---|
| Location-based | Average emissions of the electricity grid in your country | No effect: you use the grid average factor |
| Market-based | Emissions of the electricity you contractually purchase | With guarantees of origin, your scope 2 can fall |
Handbook 4.0 of the ladder requires both. The location-based footprint is new. For the market-based footprint, a supplier-specific factor for grey electricity is preferred. This is set out in the SKAO change list 4.0-3.1 .
The 15 categories of scope 3
The GHG Protocol Scope 3 Standard divides scope 3 into 15 categories. Eight sit before you in the chain (upstream), seven come after (downstream). The examples are based on Practical Guide part 2 from SKAO .
| No. | Category | Direction | Example |
|---|---|---|---|
| 1 | Purchased goods and services | Upstream | Production of steel, concrete, subcontractors |
| 2 | Capital goods | Upstream | Production of a new crane or machine |
| 3 | Fuel- and energy-related activities | Upstream | Extraction and transport of fuel (well-to-tank) |
| 4 | Upstream transport and distribution | Upstream | Supplier delivers materials |
| 5 | Waste generated in own operations | Upstream | Processing of construction and office waste |
| 6 | Business travel | Upstream | Flights, train, mileage claimed for use of a private car |
| 7 | Employee commuting | Upstream | Employees who travel to work by their own transport |
| 8 | Upstream leased assets | Upstream | Leased resources not yet in scope 1 or 2 |
| 9 | Downstream transport and distribution | Downstream | Third parties transport your product to the end customer |
| 10 | Processing of sold products | Downstream | Customer processes your semi-finished product further |
| 11 | Use of sold products | Downstream | Energy use of a building or installation you deliver |
| 12 | End-of-life treatment of sold products | Downstream | Demolition and waste processing of what you have built |
| 13 | Downstream leased assets | Downstream | Equipment you rent out to others |
| 14 | Franchises | Downstream | Energy use of franchisees |
| 15 | Investments | Downstream | Emissions of companies in which you invest financially |
For most companies only a few categories are really large. For a construction firm these are often category 1 (materials) and 11 (use of what is built). For an engineering consultancy, the influence of the design on the emissions during execution weighs most.
Which scopes does the CO2 Performance Ladder require per level and step?
The ladder has two handbooks that exist side by side during the transition period. The difference in scopes per version:
| Ladder | Scope 1 and 2 | Business travel | Other scope 3 |
|---|---|---|---|
| Handbook 3.1, level 1 to 3 | Yes | Yes, part of the footprint | No |
| Handbook 3.1, level 4 | Yes | Yes | Qualitatively mapped, plus chain analysis |
| Handbook 3.1, level 5 | Yes | Yes | Material scope 3 quantitatively mapped |
| Handbook 4.0, step 1 | Yes, location- and market-based | No longer mandatory | No |
| Handbook 4.0, step 2 and 3 | Yes | Mandatory as scope 3 category 6 | Yes, at least two thirds quantified, at least one upstream and one downstream category |
Source: Practical Guide part 1 for handbook 3.1, and the SKAO change list for 4.0. Under 4.0, non-CO2 greenhouse gases, such as methane or refrigerants, also count where they are relevant.
Example: scopes of a fictional installation company
An installation company with 40 employees puts its emissions in order for the first time. The totals are fictional and calculated with factors from co2emissiefactoren.nl .
| Source | Scope | Emissions (tonnes CO2e) | Share |
|---|---|---|---|
| Diesel company vans | 1 | 210 | 58% scope 1 and 2 |
| Natural gas, office and workshop | 1 | 35 | |
| Refrigerant leakage from air conditioning | 1 | 5 | |
| Electricity (market-based, partly green) | 2 | 110 | |
| Total scope 1 and 2 | 360 | ||
| Purchased installation materials | 3 (cat. 1) | approx. 1,900 | Estimate based on purchase volume |
| Energy use of delivered installations | 3 (cat. 11) | approx. 4,500 | Estimate based on lifespan |
The pattern is typical: scope 3 is many times larger than scope 1 and 2. That is why the ladder asks for attention to the chain from the higher levels and steps.
Common mistakes with scope 1, 2 and 3
- Double counting. Electricity from your own solar panels does not belong in scope 2. Only purchased energy counts.
- Green electricity without evidence. Without guarantees of origin, you may not record zero in the market-based method.
- Forgetting scope 3 for leased equipment. Determine whether you have control (scope 1) or not (scope 3).
- Outdated factors. Use the current list from co2emissiefactoren.nl and note which version you used.
Next step
Calculate your own footprint with calculating your CO2 footprint and see what level 3 or level 5 requires of you. Working with ISO 14001? Then scope 1 and 2 are often already visible in your environmental aspects.