Scope 1 & Scope 2 Emissions for Manufacturing: A Small Manufacturer’s Guide

Whether you are a small business, supplier or subsidiary operating a production facility in Europe, understanding Scope 1 and Scope 2 emissions is an essential part of sustainability reporting. Some organisations now report under CSRD directly, while many others use the VSME Standard voluntarily to provide credible data to large customers. Either way, clear emissions reporting helps your factory demonstrate efficiency, meet customer expectations and prepare for the growing role of energy data in commercial decisions.

CSRD places strong emphasis on energy use and greenhouse gas emissions. Large companies must disclose full Scope 1 and Scope 2 emissions and often rely on supplier data to complete their value-chain assessments. The VSME Standard mirrors these expectations with proportionate requirements — including energy use, fuel use and GHG emissions (B3) — specifically to help SMEs provide relevant information to customers and financiers .

This guide shows small manufacturers how to measure Scope 1 and Scope 2 emissions using simple data sources, realistic manufacturing examples and templates that can be maintained without external consultants. For background on where this sits in the wider CSRD framework, the hub on Energy & GHG emissions provides additional context.

1. What Are Scope 1 and Scope 2 Emissions?

Scope 1 – Direct emissions from your site

Scope 1 covers all greenhouse gases emitted directly from your operations. For manufacturing, this usually includes:

• Fuel used in boilers, heating systems or process burners
• Fuel used for on-site vehicles such as forklifts (diesel, LPG)
• Refrigerant losses from cooling systems
• Any combustion processes integral to production

Under the VSME Basic Module (B3), SMEs must disclose their Scope 1 emissions following the GHG Protocol Corporate Standard (2004) .

Scope 2 – Indirect emissions from purchased energy

Scope 2 includes emissions from electricity, heat, steam or cooling purchased from external suppliers. The VSME Standard requires location-based Scope 2 emissions — meaning emissions linked to the grid mix where your factory operates.

The focus on Scope 1 and 2 aligns with CSRD’s broader requirements for “relevant, comparable and reliable sustainability information” supporting energy and emissions reporting across entire supply chains .

2. Typical Emission Sources in Small Manufacturing Facilities

Manufacturing sites vary widely, but most fall into one of a few operational patterns:

Heat and boilers

• Gas-fired boilers for space heating
• Thermal processes such as curing, drying or melting
• Hot water systems for cleaning or sterilisation

Machinery and production equipment

• CNC machines, presses and injection moulders using electricity
• Compressed-air systems (large power consumers)
• Heat-treatment equipment using natural gas or electricity

On-site vehicles

• Diesel or LPG forklifts
• Yard vehicles or maintenance generators

Refrigeration and cooling

• Refrigerant-containing systems (production cooling, cold storage)
• Occasional refrigerant top-ups or leakage events

Small factories rarely need complex instrumentation — utility bills, delivery slips and maintenance logs typically provide all required data.

3. What Data You Need (and Where to Find It)

Your emissions calculation starts with raw activity data:

The VSME Standard requires energy consumption to be reported in MWh where possible (B3) and encourages SMEs to provide a renewable/non-renewable breakdown if available .

4. How to Calculate Scope 1 Emissions

The basic calculation:

Emissions (tCO2e) = Activity Data × Emission Factor

Step-by-step example: LPG forklift fleet

A small machining workshop operates two LPG forklifts. Over the year, it purchases 3,000 litres of LPG.

1. Convert litres → energy (if factors are given per kWh)

   • LPG energy content ≈ 7.1 kWh/litre
   • 3,000 L × 7.1 = 21,300 kWh

2. Apply emission factor (See the dedicated guide on emission factor selection)

   • Example factor: 0.214 kgCO₂e/kWh
   • 21,300 × 0.214 = 4,558 kg CO₂e, or 4.56 tCO₂e

3. Record assumptions and evidence

   • Keep fuel invoices
   • Document any forklift replacements or changes in consumption

Step-by-step example: Gas-fired powder-coating oven

A metalwork factory uses a natural gas oven for coating:

• Annual gas use: 85,000 kWh
• Emission factor: 0.202 kgCO₂e/kWh
• Result: 17.17 tCO₂e

These values can be added directly to your Scope 1 total in the VSME emissions table.

5. How to Calculate Scope 2 Emissions

Scope 2 uses activity data from electricity bills and the grid’s emission factor.

Step-by-step example: CNC machine shop

A small manufacturer consumes:

• Electricity: 240,000 kWh/year
• Location-based grid factor: 0.230 kgCO₂e/kWh
• Result: 240,000 × 0.230 = 55,200 kg CO₂e or 55.2 tCO₂e

Renewable electricity contracts

If your supplier provides a renewable tariff, the VSME Standard still requires location-based values (B3) — ensuring comparability regardless of contract type .

You may optionally disclose market-based emissions separately, but it is not required for SMEs.

6. Combined Example: A 50-Person Fabrication Plant

Below is a realistic example for a medium-sized workshop:

This plant would report energy consumption and emissions under the VSME Basic Module, including intensity metrics (GHG per € turnover) .

7. Accuracy, Estimates and Data Gaps

Small factories often lack metering for specific processes. The VSME Standard allows SMEs to complement metrics with estimates where needed, as long as they remain “relevant, faithful, comparable, understandable and verifiable” (paragraphs 8–11) .

Common estimation methods include:

• Allocating energy based on machine runtime
• Using fuel purchase data instead of measured usage
• Applying engineering estimates for refrigerant leakage
• Averaging missing months using seasonal patterns

Document assumptions clearly, and update them as better data becomes available.

8. How to Build a Simple Emissions Spreadsheet

A basic spreadsheet with these columns is enough for most SMEs:

Templates often include automatic conversions (litres → kWh) and a dropdown of emission factors. In many cases, manufacturers combine this with broader energy tracking to comply with VSME B3 and other environmental metrics.

For factories that want to expand beyond spreadsheets, the topic hub on data collection & management explains when automation becomes useful.

9. How to Use These Numbers in CSRD or VSME Reporting

Under the VSME Standard

You will disclose:

• Total energy consumption (MWh) broken down by renewable and non-renewable
• Scope 1 emissions
• Scope 2 (location-based) emissions
• GHG intensity (emissions ÷ turnover)

These are mandatory Basic Module datapoints (B3) for SMEs reporting to customers or lenders. The Standard also allows additional qualitative information such as practices, policies or future reduction initiatives (B2) .

Under CSRD (if in scope)

Manufacturers must report under ESRS E1, which requires more granular metrics, targets and energy categories. Even if you are not directly in scope, your customers may rely on your data to complete their own reporting because CSRD obliges companies to include impacts and risks across their full value chain .

Frequently Asked Questions

How precise do Scope 1 and Scope 2 calculations need to be for small factories?

SMEs are expected to provide relevant and verifiable data — not perfect precision. VSME guidance explicitly allows estimates when data gaps exist, as long as they’re documented. For practical examples of acceptable approaches, see the article on emission factor selection.

Can our factory calculate emissions without specialised software?

Yes. Most small manufacturers use utility bills, fuel receipts and maintenance logs to calculate emissions in a spreadsheet. Software becomes useful when tracking multiple sites or more frequent customer reporting. The hub on data collection & management outlines when automation adds value.

Do we need to report GHG intensity as well as total emissions?

Under the VSME Basic Module, SMEs must calculate GHG intensity by dividing total emissions by turnover (B3 requirement) . This ratio helps customers compare suppliers of different sizes.

Are electricity emissions zero if we purchase green energy?

Not for reporting purposes. VSME requires location-based Scope 2 emissions, meaning you must use the grid factor even if your tariff claims renewable sourcing. You may share additional market-based figures, but the mandatory value remains the location-based one.

Key Terms

• Scope 1: Direct emissions from fuel, processes and refrigerants.
• Scope 2: Indirect emissions from purchased electricity or heat.
• Emission factor: A multiplier converting activity data into CO₂e.
• GHG intensity: Emissions per € turnover.
• VSME Standard: A voluntary reporting framework helping SMEs provide proportionate sustainability data.

Conclusion

Measuring Scope 1 and Scope 2 emissions is entirely achievable for small and growing manufacturers. With utility bills, fuel receipts and a simple calculation sheet, your organisation can produce credible numbers that meet both VSME expectations and customer needs. Consistency is more important than sophistication: updated annually and supported by clear evidence, your data becomes a practical tool for reducing energy use and strengthening your position as a sustainable supplier.

With a clear structure and consistent effort, CSRD reporting becomes an advantage — not an obstacle.