Scope 3 Category 3: Upstream Fuel and Energy Activities Explained

What Is Scope 3 Category 3?

Scope 3 Category 3 — upstream fuel and energy related activities — covers the greenhouse gas emissions that occur during the extraction, production, and transportation of the fuels and electricity your company uses, before those fuels and electricity reach your meter or vehicle tank.

These are sometimes called well-to-tank (WTT) or upstream emissions. They are separate from the combustion emissions in your Scope 1 and the generation emissions in your Scope 2.

A simple illustration: - You burn natural gas in a boiler → that combustion produces CO2 → Scope 1 - Before that gas reached your meter, it had to be extracted from the ground, processed, compressed, and piped → those operations produced emissions → Scope 3 Category 3

Why Category 3 Is Often Reported Without Knowing It

Here is the good news: if you are using DEFRA 2023 emission factors, Category 3 is likely already included in your calculations.

DEFRA publishes two types of emission factors for fuels: - Combustion only — covers just the burning of the fuel (CO2 from combustion) - Well-to-tank (WTT) included — covers combustion plus upstream extraction and processing

DEFRA's standard combined factors (used by DeCarbonOPS) include WTT uplifts, which means your Scope 1 and 2 calculations already incorporate the Category 3 element.

The difference between combustion-only and WTT-included factors represents your Scope 3 Category 3.

How to Report Category 3 on a Supplier Questionnaire

When a questionnaire asks for your Scope 3 total and specifically asks whether Category 3 is included, you have two options:

Option 1 — Report Category 3 as embedded in Scope 1/2 (most common) State: "Scope 3 Category 3 upstream fuel and energy emissions are included within our Scope 1 and 2 figures using DEFRA 2023 WTT-inclusive emission factors."

Option 2 — Report Category 3 separately Calculate the WTT uplift by taking the difference between combustion-only and WTT-inclusive factors for each fuel, then sum across all energy sources.

For most SME supplier questionnaires, Option 1 is accepted. The key is to state clearly which factor set you used.

Common Mistakes with Category 3

Mistake 1 — Double-counting: If you report Scope 3 Category 3 separately AND use WTT-inclusive factors for Scope 1 and 2, you have double-counted. Choose one approach.

Mistake 2 — Ignoring it entirely: Some companies use combustion-only factors AND do not report Category 3 separately. This understates total emissions by approximately 10–15%.

Mistake 3 — Confusing Category 3 with Category 1: Category 1 is purchased goods — the embedded carbon in raw materials you buy. Category 3 is specifically the upstream energy chain for your own fuel use. They are completely different.

DeCarbonOPS and Category 3

DeCarbonOPS uses DEFRA 2023 WTT-inclusive emission factors by default — meaning your Carbon Passport already includes Scope 3 Category 3 within the Scope 1 and 2 figures. Your passport documentation states the DEFRA 2023 methodology, which procurement auditors recognise as including WTT uplifts.