Purchased energy
Scope 2 emissions
Scope 2 emissions are the indirect emissions from generating the electricity, steam, heat and cooling an organisation purchases or acquires and consumes.
What counts as Scope 2 emissions?
Scope 2 covers emissions from generating purchased or acquired electricity, steam, heat and cooling used by the organisation, as explained in the Scope 2 Guidance.
| Energy or activity | Scope 2 question | Evidence to start with |
|---|---|---|
| Purchased electricity | Which electricity is bought or acquired and consumed within the inventory boundary? | Meter records, supplier bills and the reporting period |
| Purchased steam, heat or cooling | Which purchased energy is consumed within that boundary? | Quantity, unit, supplier information and an appropriate energy-specific factor |
| Fuel burned in a controlled boiler | Check the direct-emissions boundary rather than treating the fuel as purchased electricity | Fuel records and the organisational boundary |
| Electricity transmission and distribution losses | Keep the separate Scope 3 treatment distinct from generation emissions | The relevant loss factor and method |
How do location-based and market-based methods differ?
Location-based accounting uses grid-average information, while market-based accounting uses the applicable hierarchy of contractual and other data described in the Scope 2 Guidance.
Module 01 / 04
Location-based
Identify the grid region and the appropriate average generation factor.
Module 02 / 04
Market-based
Evaluate the contractual evidence and the applicable data hierarchy.
Module 03 / 04
Same activity
Keep the purchased-energy quantity and boundary clear in each calculation.
Module 04 / 04
Separate results
Label the method rather than describing the two totals as gross and net.
Read the detailed guidance and evidence
Section 7.4.2 explains that the methods are not a gross/net pair and that market-based accounting can reflect fossil-fuel or mixed-resource instruments as well as renewable instruments.
Use the GHG conversion factors guide to check the activity year, units and selected factor components before preparing the calculation.
Does every reporting framework require both methods?
No, so name the reporting basis before deciding which outputs to prepare, including the specific location-based requirement in UK SRS S2 paragraph 29(a)(v).
| Reporting basis | What to distinguish | Primary provision |
|---|---|---|
| GHG Protocol Scope 2 Guidance | Dual reporting applies where the company has operations in markets providing product- or supplier-specific contractual data | Section 1.5.1 |
| UK SRS S2 | Disclose location-based Scope 2 and the necessary information about contractual instruments; market-based disclosure is permitted | Paragraph 29(a)(v) and B30–B31 |
| SECR | Check the applicable quoted or unquoted reporting route and its energy/emissions fields rather than equating every inventory with a SECR report | Schedule 7 paragraphs 15, 20D and 20F |
Which electricity records belong in the calculation?
Start with the organisational boundary and reconcile the purchased-energy records to the sites, entities and reporting period included in the inventory.
Module 01 / 04
Entities
Identify the entities and consolidation approach used for the inventory.
Module 02 / 04
Sites
List the meters and purchased-energy records assigned to each included site.
Module 03 / 04
Period
Identify the consumption period, including any estimated opening or closing readings.
Module 04 / 04
Shared supplies
Document allocations and explain unresolved gaps rather than assuming a bill covers the whole boundary.
Read the detailed guidance and evidence
The Corporate Standard sets the organisational accounting framework, while this record checklist is editorial preparation advice for making its application inspectable.
How are location-based electricity emissions calculated?
Multiply the activity quantity by the matching emissions factor, then convert the result to the presentation unit, using DESNZ Table 9 for the factor in this example.
| Fictional example input or step | Value | Meaning |
|---|---|---|
| Activity | 10,000 kWh used during calendar 2026 | Fictional purchased UK grid electricity quantity |
| 2026 generation factor | 0.13096 kgCO₂e/kWh | Published 2026 factor, using the 2025 data-year row in Table 9 |
| Calculation | 10,000 × 0.13096 = 1,309.6 kgCO₂e | The kWh units cancel, leaving kilograms of CO₂ equivalent |
| Convert to tonnes | 1,309.6 ÷ 1,000 = 1.3096 tCO₂e | Generation emissions only, with the calculation precision retained |
Which factor and year should be used?
Match the factor to the energy, geography, unit and activity period, using the annual-set rule in DESNZ paragraph 1.10.
Module 01 / 04
Energy type
A UK grid-electricity factor is not a generic factor for purchased heat, steam or cooling.
Module 02 / 04
Unit
Record the activity unit and factor denominator before multiplying.
Module 03 / 04
Activity year
The 2026 factors are intended for activity data falling entirely or mostly within 2026.
Module 04 / 04
Version
Retain the factor publication and selected row so that a reviewer can reproduce the result.
Read the detailed guidance and evidence
The 2026 electricity publication uses underlying 2025 data under the revised methodology, so the activity-factor publication year and the underlying statistical data year are distinct concepts in paragraph 3.8.
Does the activity period fit the factor year?
Use the calendar-year coverage helper to check which annual factor set fits the activity period, then verify the particular factor and units separately.
Which factor set applies · by the activity-data year
A check of the factor-year rule only.
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Read the detailed guidance and evidence
DESNZ paragraph 1.10 describes the 2026 factors as intended for activity data falling entirely or mostly within 2026.
This helper does not choose the energy category, grid region, contractual instrument or emissions factor for the reader.
What evidence supports a market-based figure?
Assess the contractual information against the complete Scope 2 Quality Criteria in Table 7.1, rather than relying on a tariff label.
Module 01 / 04
Attribute claim
Identify the emissions attribute associated with the electricity quantity.
Module 02 / 04
Exclusive claim
Check that the same emissions attribute is not being claimed through competing instruments.
Module 03 / 04
Retirement
Retain evidence of tracking and redemption, retirement or cancellation for the reporting entity.
Module 04 / 04
Time and market
Check the relevant consumption period and market, alongside the remaining applicable criteria.
Read the detailed guidance and evidence
This is a partial preparation checklist rather than a substitute for all the criteria, including the supplier-specific and residual-mix provisions in Table 7.1 and section 7.5.
Why can two methods give different results?
The same fictional electricity quantity can produce two labelled accounting results, which should remain separate rather than being presented as a gross/net reduction under section 7.4.2.
| Illustrative method | Factor assumption | Result for the same 10,000 kWh |
|---|---|---|
| Location-based | Actual 2026 UK generation factor: 0.13096 kgCO₂e/kWh | 1,309.6 kgCO₂e, or 1.3096 tCO₂e |
| Market-based illustration | Fictional factor: 0.04000 kgCO₂e/kWh, assumed to satisfy the applicable hierarchy and quality criteria | 400 kgCO₂e, or 0.4000 tCO₂e |
| Interpretation | Two methods applied to the same activity, not an offset subtraction | The numerical difference alone does not demonstrate a physical emissions reduction |
Where do electricity losses and upstream emissions go?
Keep generation emissions separate from electricity losses and upstream fuel-cycle emissions, using DESNZ paragraph 3.9 to interpret the UK factors.
Module 01 / 04
Generation
The UK electricity-generation factor used in the worked example belongs in Scope 2.
Module 02 / 04
Grid losses
The methodology classifies the separate transmission and distribution loss emissions as Scope 3.
Module 03 / 04
Upstream fuel
The generation factor does not include the production and delivery of fuel to power stations.
Module 04 / 04
Calculation record
Identify which factor was applied and the scope/category where its result is recorded.
Read the detailed guidance and evidence
The Scope 3 Standard provides the value-chain accounting framework, and the Scope 3 emissions guide explains the category structure separately.
What should software or an adviser demonstrate?
Use the worked calculation as a small acceptance test and ask the proposed preparer to explain each decision before relying on a dashboard total.
| Test | Ask for | Record to retain |
|---|---|---|
| Reproduce the result | Trace the 10,000 kWh example through the named factor to tonnes | Source quantity, factor row, units and calculation |
| Distinguish methods | Show location-based and market-based fields without overwriting one with the other | Method labels, input evidence and contractual limitations |
| Correct a bill | Replace a quantity while preserving the original record and review history | Correction reason and affected reporting outputs |
| Hand over the pack | Export the source records, calculations, assumptions and open issues | A usable evidence pack outside the platform |
How should the result be reviewed before reporting?
Reconcile the quantity, factor and method to the chosen reporting output, and keep the explanation alongside the number.
Module 01 / 04
Quantity
Check the included sites and the reconciliation to source evidence.
Module 02 / 04
Method
Confirm that the output uses the method its reporting basis calls for.
Module 03 / 04
Assumptions
Document estimates, allocations, contractual evidence and limitations.
Module 04 / 04
Comparability
Explain a factor or methodology change before interpreting a year-on-year movement.
Read the detailed guidance and evidence
The 2026 electricity methodology change in paragraph 3.8 means that a change in a reported figure should not automatically be described as an operational saving.
What is a practical order for preparing the evidence?
Use this editorial sequence to prepare and review the work, with the applicable standard providing the actual reporting requirements.
- 101
Identify the reporting basis
Name the report and its location-based or market-based instructions. - 202
Set the boundary
Document included entities, sites and energy purchases. - 303
Collect activity records
Reconcile bills, meter data, periods and estimates. - 404
Select factors
Record energy, geography, unit, publication year and source row. - 505
Check contractual evidence
Apply the relevant hierarchy and complete quality criteria where needed. - 606
Calculate separately
Retain each method and the relevant scope/category classification. - 707
Review the evidence
Resolve gaps and reproduce a sample calculation. - 808
Prepare the disclosure
Label methods, assumptions and the necessary explanatory information. - 909
Retain the pack
Save the approved output, working records and review decisions.
How does Scope 2 fit the wider reporting brief?
Use the calculation record to connect purchased-energy accounting with the reporting standard and the support being commissioned.
Module 01 / 04
Standards
Identify the disclosure basis before deciding which outputs are needed.
Module 02 / 04
Software
Specify the calculation and export tests a platform must demonstrate.
Module 03 / 04
Advice
Define the unresolved boundary, factor or contractual judgement.
Module 04 / 04
Handover
Keep the evidence in a form the next reporting team can use.
Read the detailed guidance and evidence
Start with the sustainability reporting standards guide, then use the carbon accounting software guide, carbon consultancy guide or SECR software guide for the relevant buying task.
What should the electricity evidence register contain?
Keep the activity, factor, method and review fields together so that another preparer can reproduce the calculation.
| Record group | Fields to keep |
|---|---|
| Activity | Entity, site, purchased energy, period, quantity and unit |
| Factor | Publication year, factor value, denominator and source row |
| Method | Location-based or market-based label and contractual evidence where applicable |
| Review | Calculated result, reviewer, estimates and unresolved issues |
Frequently asked
Questions people ask
What are Scope 2 emissions?
They are indirect emissions from generating the purchased or acquired electricity, steam, heat and cooling consumed by an organisation.
What is the difference between location-based and market-based Scope 2?
Location-based accounting uses grid-average information, while market-based accounting uses the relevant hierarchy of contractual and other data under the Scope 2 Guidance.
Does UK SRS S2 require both Scope 2 methods?
UK SRS S2 requires location-based Scope 2 and necessary information about contractual instruments, while permitting market-based information rather than universally requiring a second total.
Does the GHG Protocol require dual Scope 2 reporting?
The Scope 2 Guidance requires dual reporting where a company has operations in markets providing product- or supplier-specific contractual data, so the condition should not be omitted.
Are electricity transmission losses Scope 2?
The DESNZ methodology classifies generation emissions as Scope 2 and the separately calculated electricity transmission and distribution losses as Scope 3.
Does a market-based figure prove a physical emissions reduction?
No, because the two methods are different accounting approaches and their numerical difference alone does not establish a physical reduction.
Sources
Primary sources
Primary provisions and official guidance read on 26 October 2026.
- GHG ProtocolScope 2 Guidance: owner page
- GHG ProtocolScope 2 Guidance (2015), sections 1.5, 6 and 7, Table 7.1
- GHG ProtocolCorporate Accounting and Reporting Standard
- GHG ProtocolCorporate Value Chain (Scope 3) Standard
- DBTUK SRS S2, paragraph 29(a)(v) and B30–B31
- DESNZGovernment conversion factors collection
- DESNZGreenhouse gas reporting conversion factors 2026
- DESNZ2026 methodology, paragraphs 1.10, 3.8–3.9 and Table 9
- legislation.gov.ukQuoted-company energy and emissions disclosures: paragraph 15
- legislation.gov.ukUnquoted-company energy and emissions disclosures: paragraph 20D
- legislation.gov.ukUnquoted-company methodologies: paragraph 20F
- UK GovernmentEnvironmental Reporting Guidelines, including SECR guidance
Continue reading
Read next
GHG Protocol
Understand the wider organisational accounting framework.
Scope 3 emissions
Keep value-chain categories distinct from purchased-energy generation.
UK SRS S2
Read the climate disclosure requirements.
Carbon accounting software
Turn the evidence trail into a demonstration task.
Carbon consultancy
Specify support for unresolved accounting judgements.