Carbon Reduction Plans
Suppliers bidding for UK government contracts over £5 million annually must have a Carbon Reduction Plan (CRP).
Carbon Reduction Plans
When looking at carbon reductions plans we first need to look back to 2019, when the UK Government amended the Climate Change Act 2008 to establish a legally binding target of Net Zero carbon emissions by 2050.
In 2021 the Cabinet Office published Procurement Policy Note PPN 06/21, replaced by PPN 006 in February 2025, which mandates that Carbon Reduction Plans (CRP) be completed by all suppliers bidding for any central government contract valued above £5 million per annum.
The PPN introduces new criteria relating to the selection of suppliers for government contracts and regardless of the size of the organisation all suppliers will be required to submit their own Carbon Reduction Plans. Within their carbon reduction plans they will need to detail their carbon footprint as well as confirming their commitment to achieving Net Zero by 2050.
A suppliers Carbon Reduction Plan must be approved by a by a company director (or senior leadership) within the organisation within 12-months of the date of the procurement exercise and submitted to the relevant contracting authority and your company’s Carbon Reduction Plans must be published on your website.
The following broadly outlines the components of the plan:
> A commitment to Net Zero by 2050 – The government’s Net Zero target is a commitment to reduce the UK’s greenhouse gas emissions by 100% when compared to levels from 1990. All suppliers are required to pledge their commitment to this in their carbon reduction plans.
> Base year vs current emissions – Your current emissions are divided into three separate scopes, then added up and measured against a previous baseline year. They are measured as CO2e (carbon dioxide equivalent). This unit is made up of the seven greenhouse gases identified by the Kyoto Protocol: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PCFs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3).
> Be published and updated regularly on their UK website.
> Provide current UK emissions for Scope 1 and 2 of the GHG Protocol and defined subset of Scope 3 emissions: business travel, employee commuting, waste generated in operations, upstream transportation and distribution and downstream transportation and distribution.
> Detail the environmental management measures that can be applied in the delivery of the contract.
For those suppliers that fall below the threshold of the streamlined energy and carbon reporting requirements, this could be the first time they need to perform a carbon net footprint reporting exercise along with the calculation of emissions reduction targets.
To make the carbon reduction plans process easier the Government have provided a template for the carbon reduction plan which will help suppliers understand what needs to be disclosed.
But the tricky part as always is collecting the data and completing the calculations required.
This is likely to create a significant workload for some companies along with the short amount of time that this report needs to be completed by.
So, beginning the process early will ensure eligibility for any procurement contracts that require a carbon reduction plan as well as been best practice.
Carbon Reduction Planning
For those companies that have already started to disclose their emissions either voluntary or mandatory and have set targets for reduction, may well find that their current reporting methodology aligns to the requirements of PPN 006 already.
The supporting guidance on PPN 006 outlines the circumstances in which a contracting authority may refuse to award a contract based on failing to meet the selection criteria.
> Implement an organisational commitment to reducing Greenhouse Gas emissions.
> Disclose organisational GHG emissions to a contracting authority.
> Provide your Carbon Reduction Plans which has not been signed off, that does not include environmental management measures too.
How to measure your carbon reduction program
The government has provided resources based on Green House Gases (GHG) conversion factors to help organisations calculate their CO2e emissions.
Organisations may wish to seek guidance within the carbon accounting sector to ensure the data they provide is as accurate as possible. ISO 14064-3 and ISAE 3410 are widely used standards for GHG emission report verification, but there is no specific requirement for companies to audit their carbon footprint reporting.
Emissions Reduction Targets
Once CO2e across the scopes is calculated, your company is required to commit to a carbon reduction plans target over the next five years to further reduce your emissions. Your actual progress on your carbon reduction plans is then plotted on a graph against your target progress, to demonstrate that you are meeting your aims.
Carbon Reduction Projects
Finally within your carbon reductions plans, you are asked to describe carbon reduction projects that you have completed or implemented since your baseline measuring year in your carbon reduction plans. We can create a carbon reduction plan that fits your business goals.
This may include management measures such as certification schemes like ISO 14001 or PAS 2060, signing up to SBTI or other specific measures through which you can demonstrate tangible emissions reduction.
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“We’ve signed up to the SME Climate Commitment and recognising that climate change poses a threat to the economy, nature and society-at-large, our company commits to take action immediately in order to, halve our greenhouse gas emissions before 2030, Achieve net zero emissions before 2050 and Disclose our progress on a yearly basis.”
Catalyst can support you to comply with the new legislation and assist with the development of your carbon reduction plans to meet the new selection criteria. We can further support you at every stage of your Net Zero journey, from collecting data and measuring your current carbon footprint to setting goals for improvement.
Build Your Own Carbon Reduction Plans
Get in touch and discuss your objectives with us.
To assist your company in getting ready for a better, zero-carbon future, we will collaborate with you to develop an actionable and customised Carbon Reduction Plan using the carbon emission data from your carbon footprint.
Your Carbon Reduction Plan is a high-level strategy document that will include specific measures to reach the objectives specified by your business, a detailed identification of carbon reduction targets, and a summary of prior carbon footprint assessments (where available).
PPN 006 Scope 3 Emissions: The Five Categories You Must Report
PPN 006 asks for Scope 1, Scope 2 and a defined subset of Scope 3 emissions across your UK operations. The first two are straightforward once you have the data. Scope 3 is where most bidders lose time, because the underlying standard is far broader than the requirement.
Scope 1 covers direct emissions from sources you own or control: fuel combustion, your company fleet, and fugitive emissions such as refrigerant leaks.
Scope 2 covers indirect emissions from the electricity, steam, heat and cooling you purchase.
Scope 3 covers everything else in your value chain. The GHG Protocol defines fourteen Scope 3 categories. PPN 006 requires only five of them:
- Category 4 – Upstream transportation and distribution
- Category 5 – Waste generated in operations
- Category 6 – Business travel
- Category 7 – Employee commuting
- Category 9 – Downstream transportation and distribution
Emissions must be measured and reported using the GHG Reporting Protocol corporate standard, alongside the government reporting standard for Carbon Reduction Plans. Published conversion factors turn each greenhouse gas into its carbon dioxide equivalent, so the whole plan reports in a single unit.
How Long PPN 006 Compliance Takes
Gathering the baseline and current emissions data takes anywhere from a few weeks to a few months, depending on how complex your supply chain is. Bids are more often lost on timing than on effort. If you expect to tender for central government contracts above the £5 million threshold, start collecting the data before the opportunity is advertised rather than after.
Failing the selection criteria means exclusion from the bidding process altogether. The plan has to be signed off by your senior leadership and published on your website before you bid, not while you are bidding.
About Catalyst
Catalyst Digital Energy is an award-winning energy consultancy with a focus on digital energy services, total energy contract lifecycle management and energy management services. It is revolutionising how businesses manage energy with its unique Energy Spend Management Platform, which is powered by Robotic Process Automation (RPA) EaaSi®.
Catalyst is digitising all aspects of energy, including billing, data, consumption, spend, payments, procurement and emissions reporting. When combined with its fully funded renewable energy solutions, Catalyst offers a unique and powerful approach to managing energy.
What is a Carbon Reduction Plan and who needs one?
A Carbon Reduction Plan (CRP) is a published document outlining a supplier's commitment to achieving net zero by 2050 and detailing current greenhouse gas emissions across Scopes 1, 2 and 3. Under the UK Government's PPN 06/21 procurement policy, suppliers bidding for public sector contracts above £5 million per annum are required to publish a compliant CRP. Catalyst supports organisations in preparing, reviewing, and publishing PPN 06/21-compliant Carbon Reduction Plans.
What must a Carbon Reduction Plan include?
A compliant Carbon Reduction Plan must include: a commitment to achieving net zero by 2050; current Scope 1 and 2 GHG emissions data (with Scope 3 strongly recommended); at least one baseline year of emissions data; a declaration of environmental management measures; and a clear commitment to annual updates. The plan must be signed by a senior director and published on your company website.
What are Scope 1, 2 and 3 emissions?
Scope 1 emissions are direct emissions from sources owned or controlled by your organisation (e.g. company vehicles, on-site combustion). Scope 2 covers indirect emissions from purchased electricity, heat or cooling. Scope 3 captures all other indirect emissions in your value chain, including business travel, supply chain, waste, and product use. PPN 06/21 requires Scope 1 and 2 as a minimum; Scope 3 reporting is increasingly expected.
How often must a Carbon Reduction Plan be updated?
Carbon Reduction Plans must be updated and republished annually. Each update should reflect the most recent year's emissions data, progress against reduction targets, and any new commitments or actions taken. Catalyst provides ongoing CRP management services to ensure your plan remains compliant, current, and publicly accessible for procurement purposes.
What happens if our Carbon Reduction Plan is non-compliant?
Failure to publish a compliant Carbon Reduction Plan may result in disqualification from public sector procurement opportunities covered by PPN 06/21. Non-compliance can also affect your organisation's sustainability reputation and ESG credentials. Catalyst reviews plans against current government guidance to identify and resolve any gaps before submission to a contracting authority.
More on Carbon and Net Zero
> Carbon reporting explained, what you must report, who it applies to and how to get started.
> Full carbon reporting, Scope 1, 2 and 3 measured and reported properly.
> Carbon footprint reduction, cutting the footprint once you have measured it.
> Carbon offsetting, what to offset, what to reduce first, and how to avoid greenwashing.
> SECR reporting, mandatory streamlined energy and carbon reporting for qualifying companies.
> Net zero strategy, a credible route to net zero rather than a press release.