A Carbon Reduction Plan is a structured document that records where your business emissions come from today, sets targets for reducing them, and describes the actions you are taking or planning. What makes it different from a sustainability policy is that it is grounded in measured data, not aspirational language — and that distinction is exactly what procurement teams are now being asked to verify.
What Is a Carbon Reduction Plan?
A Carbon Reduction Plan (CRP) is a formal document that sets out an organisation's commitment to achieving Net Zero greenhouse gas emissions by 2050, in alignment with the UK government's own Net Zero target. It includes the organisation's current emissions baseline, a set of reduction targets with interim milestones, and the specific actions being taken to meet them.
The format was formalised for procurement purposes under PPN 06/21, which requires all suppliers bidding for central government contracts over £5 million per year to submit a compliant CRP as part of their tender. The document must be published on the organisation's website and signed off by a director or equivalent level of seniority.
The PPN 06/21 standard requires CRPs to cover at minimum: total annual greenhouse gas emissions (broken down by scope), a commitment to Net Zero by 2050, and at least five specific actions being taken to reduce emissions. Emissions data must be verified for the first year and annually thereafter by an independent third party or an internal verification process that follows accepted standards such as GHG Protocol.
Scope 1, 2, and 3 Emissions: What They Mean
The GHG Protocol divides greenhouse gas emissions into three scopes based on their source and relationship to the reporting organisation. Understanding these distinctions is essential for preparing a CRP because they determine which emissions you are required to report and where your reduction actions will have the most effect.
Scope 1: Direct emissions
Emissions from sources owned or controlled by your organisation. For most businesses, this means gas boilers, diesel generators, company vehicle fuel consumption, and any combustion processes on your premises. If you heat your building with natural gas, those emissions are Scope 1.
Examples: Natural gas heating, diesel company vehicles, process equipment fuel
Scope 2: Purchased energy emissions
Emissions from the generation of electricity, heat, or steam that your organisation purchases and consumes. These occur at the power station or energy generation facility, not at your site, but they are attributed to you as the consumer. Every unit of grid electricity you consume carries a carbon emissions factor based on the grid generation mix.
Examples: Grid electricity consumption, purchased district heating
Scope 3: Value chain emissions
All other emissions that occur in your upstream and downstream value chain — from suppliers, business travel by employees using their own vehicles or public transport, employee commuting, waste disposal, use of sold products, and so on. Scope 3 typically represents the largest share of an organisation's total footprint but is the most complex to measure.
Examples: Supplier manufacturing emissions, employee commuting, business travel, product use
PPN 06/21 requires reporting of Scope 1 and 2 emissions as a minimum, with Scope 3 encouraged but not mandated for the initial submission. As reporting standards mature, Scope 3 requirements are expected to become more formal.
How Solar PV Reduces Your Emissions
Solar PV directly reduces Scope 2 emissions. Every kilowatt-hour generated by your rooftop solar system and consumed on-site displaces a kilowatt-hour that would otherwise have been purchased from the grid. The UK grid electricity emissions factor — published annually by the Department for Energy Security and Net Zero — is used to convert kWh consumed into kgCO2e. As grid generation decarbonises, this factor falls over time, but displacing grid electricity with on-site solar remains one of the most direct and verifiable ways to reduce your Scope 2 baseline.
The calculation is straightforward. A commercial solar installation generating 80,000 kWh/year with a self-consumption rate of 75% offsets 60,000 kWh of grid electricity annually. At the current UK grid emissions factor of approximately 0.207 kgCO2e per kWh (DESNZ, 2024 figure), that represents a reduction of around 12,420 kgCO2e — or just over 12 tonnes of CO2e per year. That figure is specific, verifiable, and auditable from metering data. It sits in your CRP as evidence of real action, not intention.
Example Carbon Reduction Calculation
Illustrative only. Actual emissions factors should be taken from current DESNZ conversion factor publications.
Who Needs a Carbon Reduction Plan?
Under PPN 06/21, a CRP is mandatory for suppliers bidding for central government contracts with a value of £5 million or more per annum. However, the practical scope is wider than this formal threshold suggests. Many local authorities, NHS trusts, universities, housing associations, and arm's length bodies have adopted similar requirements in their own procurement processes. Additionally, larger private-sector clients — particularly those with their own sustainability reporting obligations — are increasingly asking for evidence of supplier emissions credentials.
Businesses that supply services to any of these organisations should assess whether a CRP is required for their specific contracts and whether their position in wider supply chains creates indirect pressure to report. Even where a CRP is not currently a formal requirement, preparing one positions the business ahead of the curve as requirements expand.
Writing Your Carbon Reduction Plan: Core Steps
- 1
Measure your baseline: collect 12 months of energy consumption data (gas, electricity, fuel) and calculate your Scope 1 and Scope 2 emissions using the current DESNZ conversion factors. Include company vehicle mileage for Scope 1.
- 2
Set targets: commit to Net Zero by 2050 as the headline target, with an interim target for 2030 (typically 50–70% reduction from baseline). Be specific about the base year and the scope of emissions covered.
- 3
List your actions: include at least five specific measures, with dates and expected emission reductions where quantifiable. On-site solar installation is among the most impactful Scope 2 reduction actions available to most businesses.
- 4
Verify the data: for PPN 06/21 compliance, emissions data must be verified. This can be done by an external third party (preferred) or by an internal process following GHG Protocol standards.
- 5
Publish and maintain: the CRP must be published on your company website. It should be reviewed and updated annually, with progress tracked against the targets set in the document.
Frequently Asked Questions
Is a Carbon Reduction Plan legally required?
Under PPN 06/21, a CRP is a mandatory requirement for suppliers tendering for central government contracts of £5 million or more per year. It is not a general legal requirement for all businesses. However, many public and private sector clients are adopting similar requirements, and the expectation is that CRPs will become more widely mandated as sustainability reporting frameworks develop.
How long does it take to prepare a Carbon Reduction Plan?
For a small to medium business with straightforward energy consumption, collecting the data and drafting the document typically takes two to four weeks if an energy audit is already available. The most time-consuming part is usually gathering 12 months of accurate consumption data from all sites and vehicles.
Can solar generation be counted in a Carbon Reduction Plan?
Yes. On-site solar generation that displaces grid electricity reduces your Scope 2 emissions and is counted as an action in your Carbon Reduction Plan. The reduction is calculated using the DESNZ grid emissions factor and is verifiable from solar monitoring data. This is one of the most direct and auditable emission reductions available to most businesses.
What is the difference between Net Zero and carbon neutral?
Carbon neutral means offsetting remaining emissions through carbon credits or other mechanisms, while still emitting. Net Zero means actually reducing emissions as close to zero as possible, with only residual hard-to-abate emissions offset. The UK government and most procurement frameworks require a Net Zero trajectory, not carbon neutrality via offsetting alone.
Do I need external verification for my emissions data?
For PPN 06/21 compliance, the first year's data should be verified by an independent third party or through a robust internal verification process. Many businesses use energy consultants or auditors for this. Ongoing annual data should follow the same verification approach to maintain the plan's credibility.
Related pages
Important disclaimer. This article provides general guidance on Carbon Reduction Plans based on UK government policy and GHG Protocol standards current as of June 2026. Emissions conversion factors should be taken from the most current DESNZ publication. PPN 06/21 requirements and their application vary by contract and contracting authority. This article does not constitute compliance, legal, or energy advice. Independent professional advice should be sought for specific compliance requirements. Last updated June 2026.