Scope 1, 2 and 3 emissions explained with manufacturing examples
What are Scope 1, 2 and 3 emissions, which items fall into each scope in a manufacturing company, how do they map to ISO 14064-1 categories and where do they meet the CBAM calculation? A practical guide.
What are Scope 1, 2 and 3 emissions? Scope 1 covers direct greenhouse gas emissions from sources a company owns or controls, such as boilers, furnaces, company vehicles and refrigerant leaks. Scope 2 covers indirect emissions from the generation of electricity, steam, heat and cooling that the company buys and consumes. Scope 3 covers all other indirect emissions across the value chain: suppliers, logistics, the use of sold products and their end of life. The three-scope split comes from the GHG Protocol and is the common language of corporate carbon accounting.
This guide explains the three scopes from the point of view of a manufacturing company, with practical examples. It also shows how the scopes map to the ISO 14064-1 categories, where the data comes from, and how a corporate inventory connects to the product-level calculation required under the EU's CBAM. If you buy from Turkish manufacturers, it also explains what your suppliers can realistically provide.
Where does the scope concept come from?
The GHG Protocol, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), is the international set of standards that describes how companies prepare a greenhouse gas inventory. Its Corporate Standard divides emissions into three scopes according to whose stack they come from. The aim is to avoid double counting within one inventory and to separate what a company directly controls from what it influences.
The Protocol covers seven greenhouse gases: carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF₆) and nitrogen trifluoride (NF₃). Each is converted with its global warming potential (GWP) into tonnes of CO₂ equivalent (t CO₂e), so different gases can be shown in a single total.
Scope 1: direct emissions
Scope 1 is what a company releases directly into the atmosphere from sources it owns or operates. In a manufacturing plant the typical items are:
- Stationary combustion: natural gas, fuel oil, coal or LPG burned in boilers, furnaces, dryers and generators.
- Mobile combustion: company-owned or controlled vehicles, forklifts and construction machinery.
- Process emissions: gases released by chemical reactions rather than combustion, such as limestone calcination in cement or electrode consumption in steelmaking.
- Fugitive emissions: refrigerant leaks from air conditioning and cooling systems, SF₆ leaks from electrical switchgear.
Scope 1 is usually the easiest to measure, because the data sits in the company's own invoices and meters. The usual difficulties are process emissions and incomplete records of refrigerant top-ups.
Scope 2: indirect emissions from purchased energy
Scope 2 is the emission produced at the generator's site when the electricity, steam, heat or cooling a company buys is produced. The stack belongs to someone else, but the demand comes from the company, so it is tracked separately.
The GHG Protocol Scope 2 Guidance defines two methods and asks companies to report both:
| Method | Emission factor used | When it makes a difference |
|---|---|---|
| Location-based | Average emission factor of the grid where the electricity is consumed | Reflects the grid's overall carbon intensity, regardless of supplier choice |
| Market-based | Contractual factor of the electricity purchased (energy attribute certificates, power purchase agreements, supplier-specific factors) | Reflects choices such as buying renewable electricity |
In practice, Scope 2 needs the kWh figures from monthly electricity bills and any renewable energy certificates. Electricity generated on site by burning fuel, for example in a gas-fired cogeneration unit, is reported in Scope 1 because the fuel is burned on site; the same energy is not counted again in Scope 2.
Scope 3: other indirect emissions in the value chain
Scope 3 covers emissions that result from the company's activities but occur at sources it neither owns nor controls. For most manufacturers it is the largest part of the footprint. The GHG Protocol Scope 3 Standard splits it into 15 categories: 8 upstream and 7 downstream.
| Side | Categories | Example for a manufacturer |
|---|---|---|
| Upstream | 1 Purchased goods and services · 2 Capital goods · 3 Fuel- and energy-related activities · 4 Upstream transportation · 5 Waste generated in operations · 6 Business travel · 7 Employee commuting · 8 Upstream leased assets | Purchased steel sheet, polymer granules, chemicals; inbound freight; staff shuttle buses |
| Downstream | 9 Downstream transportation · 10 Processing of sold products · 11 Use of sold products · 12 End-of-life treatment · 13 Downstream leased assets · 14 Franchises · 15 Investments | Shipping to customers, lifetime emissions of energy-using products, recycling or landfill |
Calculating every Scope 3 category completely in year one is not realistic. The standard expects the company to identify which categories are relevant (large or open to influence) and to disclose and justify any exclusions. Manufacturers usually start with category 1 (raw materials) and categories 4 and 9 (freight).
How do the scopes map to ISO 14064-1 categories?
ISO 14064-1:2018, widely used for verification in Turkey and Europe, groups the same emissions into six categories instead of three scopes. The two systems are not alternatives; the same inventory can be presented both ways.
| ISO 14064-1 category | GHG Protocol equivalent |
|---|---|
| Category 1: Direct emissions and removals | Scope 1 |
| Category 2: Indirect emissions from imported energy | Scope 2 |
| Category 3: Indirect emissions from transportation | Scope 3 (freight, business travel, commuting) |
| Category 4: Indirect emissions from products used by the organisation | Scope 3 (purchased goods and services, capital goods, waste) |
| Category 5: Indirect emissions associated with the use of products from the organisation | Scope 3 (processing, use and end of life of sold products) |
| Category 6: Indirect emissions from other sources | Items not covered above |
The mapping is not one to one: ISO 14064-1 asks the organisation to define its own significance criteria for categories 3 to 6. Setting up the inventory to support both classifications from the start makes it easier to answer customer questionnaires and verification audits from the same data. Carbonet's corporate carbon footprint module tags every record with both its scope and its ISO category, and the report follows the standard you select. How we structure an ISO 14064-1 inventory by category is explained on our ISO 14064 GHG inventory software page, and how verification works in what is ISO 14064-1.
Where does the data come from?
The basic formula is the same for every scope: activity data × emission factor = emissions. Activity data is the amount of fuel, electricity, tonne-kilometres or purchased material; the emission factor is the t CO₂e per unit, taken from sources such as IPCC, DEFRA, national inventories or supplier-specific data.
- Scope 1: natural gas and fuel invoices, fuel card statements, vehicle mileage logs, refrigerant service records, raw material consumption for process emissions.
- Scope 2: electricity bills (kWh), steam or heat purchase invoices, guarantees of origin for renewable electricity.
- Scope 3: purchasing records (quantity and supplier), delivery notes and distances, waste declarations, travel and shuttle records, product carbon data requested from suppliers.
The most common mistake is entering annual totals and losing the source documents. Verifiers ask which invoice a figure came from, so monthly records linked to documents matter.
Where do the scopes meet the CBAM calculation?
For a manufacturer exporting to the EU, a corporate footprint and CBAM are not the same thing, but they draw on the same data. The corporate inventory covers the whole company over a year; CBAM requires embedded emissions per product, in t CO₂e per tonne of goods.
- Direct emissions (CBAM): fuel and process emissions at the installation, essentially the share of Scope 1 attributable to production processes.
- Indirect emissions (CBAM): emissions from electricity consumed in production, similar to Scope 2. The CBAM legislation specifies separately for which goods indirect emissions are taken into account.
- Precursors (CBAM): embedded emissions of purchased intermediate goods that are themselves CBAM goods, a narrow and defined slice of Scope 3 category 1.
The key difference is that CBAM allocates emissions to goods within installation and production process boundaries, using the method set by the EU. If the fuel and electricity data in a corporate inventory are well structured, the raw material for the CBAM calculation is already in place. Our CBAM embedded emissions calculation page explains this step by step.
Who asks for Scope 1, 2 and 3 data, and why?
- EU and large customers: they need Scope 1 and 2 data from suppliers for their own Scope 3 accounts, which is why supplier questionnaires and platform requests arrive.
- Reporting standards: in Turkey, TSRS 2, part of the Turkish Sustainability Reporting Standards issued by the Public Oversight Authority (KGK), requires disclosure of Scope 1, 2 and 3 greenhouse gas emissions in climate-related reporting.
- Finance: banks and investors increasingly ask for emissions data in lending and investment decisions.
- Your own costs: seeing energy and fuel use item by item reveals reduction opportunities and CBAM-related cost exposure early.
Where to start
A realistic first-year path: define the organisational boundary (which sites and entities are included), build Scope 1 and 2 completely from monthly invoices, select and justify the relevant Scope 3 categories, and record the source and version of every emission factor. From the second year, supplier-specific data improves the quality of Scope 3.
Carbonet is a carbon management software developed by LNA Soft in Izmir, Turkey. It prepares Scope 1-2-3 and ISO 14064-1 inventories from a single dataset and passes the same data to the CBAM embedded emissions calculation. To see it working with your own data, request a demo or write to info@carbonet.com.tr or on WhatsApp (+90 533 368 05 99).
Frequently asked questions
What is the difference between Scope 1 and Scope 2?
Scope 1 is emitted directly from the company's own sources such as boilers, furnaces and vehicles. Scope 2 is emitted where the electricity, steam, heat or cooling the company buys is generated; the stack belongs to someone else, but the consumption is the company's.
Is Scope 3 reporting mandatory?
Under the GHG Protocol Corporate Standard, Scope 3 reporting is optional, but customer requests and standards such as TSRS 2 in Turkey increasingly expect Scope 3 disclosure. In practice companies report their relevant categories and justify exclusions.
Which scope does on-site generated electricity fall into?
Electricity you generate on site by burning fuel, for example in cogeneration, is reported in Scope 1 because of the fuel combustion. It is not counted again in Scope 2, which avoids double counting.
Do I have to choose between ISO 14064-1 and the GHG Protocol?
No. ISO 14064-1:2018 groups emissions into six categories and the GHG Protocol into three scopes. The same inventory can be presented both ways, and tagging records with both from the start makes this easy.
Can a Scope 1-2-3 inventory replace a CBAM report?
No. CBAM requires embedded emissions per product under the EU's method, while a corporate inventory shows the company's annual total. If fuel and electricity data are collected properly, though, the raw data for CBAM is ready.