Carbon Reduction Plans – what you need to know
If you plan to bid for public sector contracts, you’ll need to become quickly familiar with Carbon Reduction Plans (if you’re not already). Chances are, you’ll already be familiar with these if you’ve submitted bids for public sector contracts in recent years.
Carbon Reduction Plans were introduced in 2021 and aim to support the Government’s push to Net Zero by 2050 by requiring suppliers bidding for public contracts to calculate their emissions and commit to a plan for reducing their emissions to ‘Net Zero’ by 2050.
In a nutshell, Carbon Reduction Plans consist of the following key areas:
- Your emissions and organisational activity causing those emissions (split into Scope 1, 2 and 3 – explained further below)
- Your carbon reduction initiatives
- Targets
- Declaration
Emissions
Emissions are split into Scope 1, 2 and 3:
Scope 1 – Direct emissions including e.g.: those arising from your vehicle fleet
Scope 2 – Indirect emissions including e.g.: utilities including gas and electricity
Scope 3 – Other emissions including e.g.: those arising from waste disposal, business travel, supply chain, purchase of goods and services, investments.
For most organisations, scope 3 emissions account for the most significant emissions with estimates ranging from 80 to 90% of an organisation’s total emissions.
Carbon Reduction Initiatives
These should include your current and future (planned) activities to manage and minimise your carbon footprint. These can, and should, span the breadth of scope 1 to 3 emissions.
Typical actions you might see under Scope 1
- Electrification of the vehicle fleet
- Installation of solar panels
Typical actions you might see under Scope 2
- Switching to a renewable energy supplier and green tariffs
- Implementing energy efficiency measures (e.g. energy efficient light-bulbs and improving insulation in buildings)
Typical actions you might see under Scope 3
- Minimising business travel and encouraging the use of video-conferencing
- Car pooling and incentivising use of public transport for staff
- Supply chain engagement and sourcing products and services from companies with low-carbon practices and commitments to reducing carbon emissions
- Designing products and services that with carbon reduction in mind including encouraging responsible disposal by customers
Targets
Make sure any targets you set here align with the vision for Net Zero by 2050. In some procurements you will see that potential suppliers are encouraged to set an earlier target (e.g. 2045).
What you need to know:
You will likely need to complete a Carbon Reduction Plan if the contract value is over £5m per year (including VAT).
Even if you have completed a Carbon Reduction Plan, you can still fail to be awarded a public contract on the basis that:
- You haven’t declared your GHG emissions in accordance with the required standard (see relevant documents under helpful links including the guidance on the reporting of GHG emissions and the official ‘how to’ document;
- You didn’t complete the declaration on the Carbon Reduction Plan (see the template under helpful links);
- You haven’t provided details of the environmental measures and actions you will take during the life of the contract;
- You haven’t completed the Carbon Reduction Plan to the required (technical) standard.
If you are bidding as part of a consortium of suppliers, each of you will need to complete a Carbon Reduction Plan.
If you’ve been trading for less than 12 months you might not need to publish a full Carbon Reduction Plan, but you should still do so as soon as possible. You will still likely need to confirm your commitment to achieving Net Zero by 2050.
Whilst there is a requirement to ensure your carbon footprint reporting complies with the Green House Gas Reporting Protocol (see helpful links) there is no requirement to have your carbon footprint audited.
Carbon Reduction Plans should be updated at least annually.
The action you need to take (at an absolute minimum):
- Download the Carbon Reduction Plan template
- Calculate your Scope 1, 2 and 3 emissions (the tools on this page are a useful starting point: https://smeclimatehub.org/start-measuring/)
- Start recording your Scope 1, 2 and 3 emissions
- Develop a plan for managing your carbon footprint (and consider reflecting this in form of an Environmental Policy and Action Plan)
- Complete the Carbon Reduction Plan template (in accordance with the technical standard including ‘signing’ the declaration)
- Publish the Carbon Reduction Plan on your website (don’t miss this step)
- Submit your bid!
Helpful links:
Carbon Reduction Plans – templates and standards
A useful (and official) ‘how to’ on completion of carbon reduction plans: https://assets.publishing.service.gov.uk/media/67b334c67c070e71525f5818/PPN_006_Technical_standard_for_Completion_of_Carbon_Reduction_Plans.pdf
Template for Carbon Reduction Plan: https://assets.publishing.service.gov.uk/media/6800e3930b24153af1e7c700/2025-04-16_PPN_006_Carbon_Reduction_Plan_Template.odt
Technical standard for the completion of Carbon Reduction Plans: https://www.gov.uk/government/publications/ppn-006-taking-account-of-carbon-reduction-plans-in-the-procurement-of-major-government-contracts/ppn-006-technical-standard-for-completion-of-carbon-reduction-plans-html
Reporting your Green House Gas emissions – standards
Guidance on the reporting of Green House Gas emissions: https://ghgprotocol.org/corporate-standard
Scope 3 emission calculations – supplementary guidance: https://ghgprotocol.org/sites/default/files/standards/Scope3_Calculation_Guidance_0.pdf
Carbon footprint and Greenhouse Gas emissions – calculators
Calculators for measuring your carbon footprint and Greenhouse Gas emissions: https://smeclimatehub.org/start-measuring/
Policy documents and PPNs
PPN006 (originally issued in June 2021 as PPN 06/21) was updated in February 2025 to reflect changes to the Procurement Act 2023 and the Procurement Regulations 2024) sets out how public bodies should take account of Carbon Reduction Plans:
