What Are Scope 1, 2 & 3 Emissions? A Guide for Mid-Sized Companies
By Dr. Max Rosvall Välme, PhD in Strategic Sustainable Development, Uppsala University · Reviewed by Morten Rosén
Scope 1, 2 and 3 are the three categories of greenhouse-gas emissions defined by the GHG Protocol. Scope 1 covers direct emissions, Scope 2 covers purchased energy, and Scope 3 covers value-chain emissions. The EU's Voluntary Standard (VS, formerly VSME) requires only Scope 1 and 2 at the basic level.
Quick facts
- Scope 1 = direct emissions from sources you own or control (vehicles, on-site fuel).
- Scope 2 = indirect emissions from purchased energy (electricity, heat, steam, cooling).
- Scope 3 = value-chain emissions, split into 15 categories (upstream 1-8, downstream 9-15).
- VS Basic Module disclosure B3 ("Energy and greenhouse gas emissions") requires total energy consumption in MWh and gross Scope 1 and 2 emissions in tCO₂eq.
- Scope 3 appears only in the Comprehensive Module, and only where it yields relevant information.
- The standard references the GHG Protocol Corporate Standard (2004) as its method.
- The Voluntary Standard (VS) was adopted by the European Commission on 3 July 2026 and replaces the VSME name.
What is the difference between Scope 1, 2 and 3 emissions?
The difference is who controls the emission source. Scope 1 is direct emissions from sources you own or control. Scope 2 is indirect emissions from the energy you purchase. Scope 3 is every other indirect emission across your value chain.
A practical way to picture it: Scope 1 is the fuel your own vehicles and boilers burn. Scope 2 is the electricity, heat, steam or cooling you buy and consume. Scope 3 is everything else, from the goods and services you purchase to business travel, waste, and the use of the products you sell. The GHG Protocol, developed by the World Resources Institute and the World Business Council for Sustainable Development, is the standard that defines all three.
What are the 15 categories of Scope 3?
Scope 3 is divided into 15 categories under the GHG Protocol Corporate Value Chain Standard. Categories 1-8 cover upstream activities, such as purchased goods and services. Categories 9-15 cover downstream activities, such as the use of sold products.
Upstream examples include purchased goods and services (Category 1), capital goods (Category 2), and fuel- and energy-related activities not already in Scope 1 or 2 (Category 3). Downstream examples include the processing, use and end-of-life treatment of sold products. For many mid-sized companies, Scope 3 is the largest part of the footprint, which is also why it is the hardest to measure, and why the Voluntary Standard does not demand it at the basic level.
Does a VS (VSME) report require Scope 3 emissions?
No. The Basic Module of the Voluntary Standard (VS, formerly VSME) requires only energy consumption, Scope 1 and location-based Scope 2 emissions. Scope 3 belongs to the Comprehensive Module, and even there it is reported only where relevant.
The Basic Module sets a floor, not a ceiling. The standard explicitly encourages additional sector-specific or entity-specific information where it makes a report more relevant and comparable, and it names Scope 3 among that information. So if you prepared for CSRD and already built a Scope 3 inventory, include it. What VS removes is the obligation to produce data you do not have, not the value of data you do.
How do mid-sized companies calculate Scope 1 and 2 emissions?
You calculate emissions by multiplying activity data by an emission factor. For Scope 1, activity data is the fuel you burn. For Scope 2, it is the energy you purchase. The Voluntary Standard requires the location-based method for Scope 2, using the average emission factor of your local grid.
In practice, you start with one of two approaches. Activity-based uses physical quantities, such as litres of fuel or kWh of electricity, and gives you the most accurate result. Spend-based uses financial data and average factors, and produces a defensible number fast when primary data is missing. My advice to most first-time reporters: start spend-based to get a complete baseline, then refine the few high-impact areas with activity data. The choice between spend-based and activity-based calculation methods decides both how precise your numbers are and how much work the first report takes.
What is the easiest way to calculate emissions for a VS report?
The easiest way is a tool that maps your activity data to emission factors and outputs Scope 1, 2 and 3 in the format the standard expects. This removes the manual factor look-ups and spreadsheet work that make first reports slow.
Future Fluent's GHG calculator does exactly this. It covers Scope 1 through 3, spend-based or activity-based, against a database of emission factors, and outputs figures in the format the Voluntary Standard's B3 disclosure expects. You start free with Scope 1 & 2 — no credit card — and move up to Professional when Scope 3 and your wider reporting ambitions call for it.
Calculate your Scope 1-3 emissions free →
Frequently asked questions
Are Scope 1, 2 and 3 emissions mandatory?
It depends on the standard. Under the Voluntary Standard (VS, formerly VSME), Scope 1 and location-based Scope 2 are required in the Basic Module; Scope 3 is only in the Comprehensive Module, where relevant.
Is Scope 2 location-based or market-based under the Voluntary Standard?
The standard requires location-based Scope 2 emissions, calculated using the average emission factor of the local electricity grid.
Which GHG standard does the Voluntary Standard use?
It references the GHG Protocol Corporate Accounting and Reporting Standard (2004 version) as the basis for estimating greenhouse-gas emissions.
Has VSME been renamed?
Yes. The European Commission adopted the standard as the "Voluntary Standard" (VS) on 3 July 2026. It builds on EFRAG's VSME work and is now scoped for non-listed companies up to 1,000 employees.