Scope 3 Category 2: Capital Goods — How to Calculate Equipment Emissions

What Is Scope 3 Category 2?

Scope 3 Category 2 — capital goods — covers the embedded greenhouse gas emissions in the equipment, machinery, vehicles, buildings, and IT hardware your company purchases during the reporting year. These are assets with a useful life of more than one year, as opposed to consumables (which fall under Category 1 purchased goods).

Category 2 is defined in the GHG Protocol Corporate Value Chain (Scope 3) Standard and is required for companies where capital expenditure is material to their overall footprint. It is frequently underreported because most businesses do not think of buying a new piece of machinery or a company van as generating carbon emissions — but the manufacturing of those assets did generate significant emissions before they arrived at your premises.

Which Assets Count as Capital Goods for Category 2?

Capital goods covered by Category 2 include:

• Industrial machinery and equipment — CNC machines, lathes, presses, compressors, generators
• Company vehicles — vans, trucks, cars (the manufacturing emissions; fuel use is Scope 1)
• IT equipment — laptops, servers, monitors, printers, phones
• Buildings — new office construction or significant building purchases (embodied carbon in materials)
• HVAC systems — air handling units, chillers, boilers (installation)
• Racking, shelving, and warehouse equipment

Note: vehicles and machinery bought on operating leases are typically not included in Category 2 — operating lease emissions are allocated to the lessor under GHG Protocol rules.

The Two Calculation Methods for Category 2

Method 1 — Supplier-specific data Use lifecycle assessment (LCA) data provided by the equipment manufacturer — increasingly available as Environmental Product Declarations (EPDs). This is the most accurate method but requires asking your supplier for embodied carbon data.

Method 2 — Spend-based estimation Multiply your capital expenditure (in £/€/$) by an industry-average emission intensity factor (kgCO2e per £ spent). This is less accurate but practical where supplier-specific data is unavailable.

Industry-average spend-based emission factors (DEFRA 2023, approximate):

Worked example: A manufacturer spends £85,000 on a new CNC milling machine in 2024. 85,000 × 0.43 = 36,550 kgCO2e = 36.6 tCO2e added to Scope 3 Category 2 for 2024.

Is Category 2 Required on Supplier Carbon Questionnaires?

Most SME supplier questionnaires ask for total Scope 3 — not a breakdown by category. Category 2 is included in your Scope 3 total if you choose to calculate it. For SMEs, the GHG Protocol allows reporting the most material Scope 3 categories and labelling others as not calculated.

If your business makes significant capital purchases relative to your operating footprint (e.g., you bought a £200,000 piece of equipment this year), Category 2 may be your largest Scope 3 item and should be included. If you buy minimal capital equipment, it may be immaterial.

How to Report Category 2 in DeCarbonOPS

DeCarbonOPS covers Scope 3 Categories 3, 5, 6, and 7 in its standard Carbon Passport calculation. For Category 2 capital goods, calculate using the spend-based method above and add the result to your Scope 3 total before generating your passport. You can note in your questionnaire response that Category 2 is included in your declared Scope 3 figure.