Scope 1 & Scope 2 Emissions: Definitions, Differences and Their Role in Carbon Accounting

‍

Scope 1 and Scope 2 are the two most straightforward emissions categories defined by the GHG Protocol — the global standard for corporate greenhouse gas accounting. Together with Scope 3, they form the complete framework for measuring a company's Corporate Carbon Footprint (CCF) and, at the product level, connect directly to the emission factors that underpin Product Carbon Footprint (PCF) calculations.

‍

Scope 1: Direct emissions

‍

Scope 1 emissions are all direct greenhouse gas (GHG) emissions from sources that are owned or directly controlled by the company. They arise wherever a company combusts fuel or operates processes that release GHGs on-site. Typical Scope 1 sources include:

‍

• Stationary combustion: gas or oil burned in boilers, furnaces, kilns, or reactors on company premises
• Mobile combustion: fuel burned by company-owned vehicles, forklifts, or machinery
• Process emissions: GHGs released as a direct result of industrial processes — for example, CO₂ from calcination in cement production, or fluorinated gases from refrigeration and air conditioning
• Fugitive emissions: unintentional leaks of GHGs, such as methane from pipelines or refrigerants from cooling systems

Scope 1 emissions are generally the easiest to measure directly, because the company controls the source. They form the foundation of any corporate carbon inventory and are a mandatory disclosure under CSRD/ESRS E1.

‍

Scope 2: Indirect emissions from purchased energy

‍

Scope 2 emissions are indirect GHG emissions associated with the generation of purchased electricity, steam, heat, or cooling that the company consumes but does not produce itself. They are "indirect" because the actual combustion or generation process happens at the utility or power plant, not at the company's own site — but the company's energy demand drives those emissions.

‍

The GHG Protocol defines two methods for calculating Scope 2:

‍

• Location-based method: uses average grid emission factors for the country or region where the energy is consumed — the most common approach and the default for many reporting frameworks
• Market-based method: uses emission factors from specific energy contracts, renewable energy certificates (RECs), or guarantees of origin (GOs) — relevant for companies that have purchased certified renewable electricity

For manufacturing companies, Scope 2 is directly connected to PCF calculations: the energy consumed in each production step carries a CO₂e factor based on the local electricity grid mix, which varies significantly by country and year. This is one reason why geographic differentiation in CO₂e databases matters so much for accurate product-level carbon accounting.

‍

Scope 1 and 2 vs. Scope 3: scale and complexity

‍

While Scope 1 and Scope 2 cover a company's own operational emissions, Scope 3 covers everything else across the value chain — from raw material extraction and supplier manufacturing to product use and end-of-life. For most industrial companies, the contrast is stark: Scope 1 and 2 combined typically represent 10–30% of total GHG emissions, while Scope 3 accounts for 70–90%.

‍

This is why, from a climate strategy and regulatory perspective, Scope 3 — and by extension, product-level carbon data — receives the most attention. But Scope 1 and 2 remain essential: they are the most directly controllable emissions, and reducing them (through electrification, renewable energy procurement, or efficiency improvements) feeds directly into the factory-gate emission factors that influence PCF calculations for every product manufactured.

‍

How Scope 1 and 2 connect to PCF

‍

In a cradle-to-gate PCF calculation, Scope 1 and Scope 2 emissions from the company's own manufacturing processes appear as process energy inputs: the gas burned in a furnace, the electricity consumed in an injection moulding machine, or the heat used in a coating line all carry CO₂e values derived from the respective Scope 1 and Scope 2 emission factors for that facility's energy sources and grid. Companies that reduce their Scope 2 footprint by switching to renewable electricity therefore also reduce the embedded carbon of every product they manufacture — a direct link between corporate energy strategy and product-level decarbonization.

‍

Scope 1, 2, and the regulatory landscape

‍

Both CSRD/ESRS E1 and the GHG Protocol Corporate Standard require companies to report Scope 1 and Scope 2 emissions as a baseline. Science Based Targets (SBTi) require companies to set near-term reduction targets for Scope 1 and 2 alongside Scope 3. For CBAM, the embedded production emissions that importers must report are essentially a combination of Scope 1 and Scope 2 emissions from the non-EU producer's manufacturing process — making supplier-level Scope 1 and 2 data a key input for EU importers' compliance calculations.

‍

Want to calculate Scope 1, 2, and 3 emissions across your products and value chain?

‍

Explore our CO₂e database and PCF calculation tools, or contact our team to access the sustamizer® and build a complete, audit-ready emissions picture from product to portfolio.

‍