Scopes of Greenhouse Gas Emissions

Greenhouse gas emission scopes classify emissions according to their relationship with a reporting entity. They separate emissions released by the entity itself from indirect emissions associated with purchased energy and the wider value chain. The classification supports consistent corporate greenhouse gas inventories.

What each scope covers

• Scope 1 comprises direct emissions from sources owned or controlled by the entity, such as fuel combustion in boilers and vehicles, industrial processes, and fugitive leaks.
• Scope 2 comprises indirect emissions from generating purchased or acquired electricity, steam, heating, or cooling consumed by the entity. The emissions physically occur at the energy producer's facilities.
• Scope 3 comprises all other indirect emissions in the entity's upstream and downstream value chain, excluding those counted in Scope 2.

Value-chain examples

Scope 3 extends beyond the entity's operational boundary and is commonly organised into upstream and downstream activities.

• Upstream examples include purchased goods, capital goods, fuel and energy activities not included in Scopes 1 or 2, transport, waste, business travel, and employee commuting.
• Downstream examples include distribution, processing and use of sold products, end-of-life treatment, franchises, and investments.
• For a refinery, on-site fuel combustion is Scope 1, purchased electricity is Scope 2, while extraction of purchased crude and combustion of sold fuels by users can be Scope 3.

Accounting significance

Scopes are defined from each reporting entity's perspective, not as globally exclusive categories. The same physical emission may be Scope 1 for an electricity generator and Scope 2 for its customer; it may also enter another entity's Scope 3 inventory.

• The distinction identifies different mitigation levers: operational changes for Scope 1, low-carbon energy procurement for Scope 2, and supplier or product-value-chain action for Scope 3.
• Entity-level inventories should not be added mechanically across firms because double counting can occur between their scopes.