Scope 3 category 3: well-to-tank and grid losses explained

Category 3 is the Scope 3 category most companies can calculate completely, because it uses the same fuel and electricity data they already collect for Scopes 1 and 2. It captures emissions that happen before the energy reaches you: extracting, refining and transporting fuels, and the electricity lost in the grid.

What the standard says

The Scope 3 Standard describes category 3 as the "Extraction, production, and transportation of fuels and energy purchased or acquired by the reporting company" that are not already counted in Scope 1 or 2. The GHG Protocol's technical guidance splits it into four activities (table 3.1):

Activity D applies mainly to utilities and energy retailers that buy electricity to resell. For most companies, category 3 means A, B and C.

Well-to-tank: activities A and B

"Well-to-tank" (WTT) is the name the UK government conversion factors use for upstream fuel emissions. A WTT factor covers everything from extraction to the point of use; the combustion itself stays in Scope 1 (for fuels you burn) or Scope 2 (for electricity you buy).

You apply WTT factors to exactly the quantities you already report:

• natural gas, diesel, LPG and other fuels from Scope 1, using the WTT factor for the same fuel and unit;
• electricity from Scope 2, using the WTT factor for electricity generation.

Grid losses: activity C

Part of the electricity generated is lost in the transmission and distribution grid before it reaches you. The guidance's formula for this activity is "electricity consumed (kWh) × electricity life cycle emission factor ((kg CO2e)/kWh) × T&D loss rate (%)".

How you apply it depends on the data source:

• UK (DESNZ): DESNZ publishes a ready-made T&D factor per kWh, applied to the electricity you report in Scope 2, plus a separate WTT factor for the T&D share.
• Italy (ISPRA): ISPRA publishes a factor per kWh lost and the share of losses in consumption for each year. The guide to Italian electricity factors explains when to add losses and when they are already included.

Worked example (UK, 2026 factors)

An office uses 200,000 kWh of natural gas (gross calorific value) and 100,000 kWh of grid electricity in the UK. Factors are DESNZ 2026, in kg CO2e per kWh.

Category 3 adds 11,382 kg CO2e, equal to 23% of this office's Scope 1 and 2 total of 49,558 kg.

Common mistakes

• Counting upstream emissions twice. Some factors are "life-cycle" factors that already include upstream emissions (many commercial databases work this way). If you use one for Scope 1, the WTT part is already inside it, so adding category 3 on top double counts. Use direct combustion factors in Scope 1 and WTT factors in category 3.
• Mixing units. Natural gas factors differ between gross and net calorific value (0.18231 vs 0.20199 kg CO2e/kWh for combustion in DESNZ 2026). Use the WTT factor with the same basis as your Scope 1 factor.
• Forgetting heat and steam. If you buy district heat or steam, it has WTT and distribution-loss factors as well.
• Leaving it out. The Scope 3 Standard says "Companies shall account for all scope 3 emissions and disclose and justify any exclusions." In the example above, category 3 is almost a quarter of Scope 1 and 2, so leaving it out needs a real justification.

In LCALens

For fuels and electricity, the upstream fuel and energy calculator applies the WTT factors and the grid losses calculator the T&D factor, each saved as a separate category 3 calculation. Upstream emissions are never mixed into the Scope 1 or Scope 2 figures. For business travel, commuting and freight, ticking "also save the well-to-tank emissions" records the upstream part as a companion calculation.