How to Write a Carbon Reduction Plan: A Practical Guide for UK SMEs (PPN 006)

If you've received a government tender that asks for a Carbon Reduction Plan, you're probably in the same position as most SME owners I've spoken to: you know you need one, but you have no idea what actually goes in it. The guidance that procurement teams point you towards — PPN 006 — is written for policy people, not business owners. This guide is written for you.

Let's walk through exactly what a compliant Carbon Reduction Plan looks like and how to build one from scratch.

What PPN 006 Actually Requires

Procurement Policy Note 006 (PPN 006) is the UK government policy that makes Carbon Reduction Plans a condition of bidding for central government contracts above £5 million. But many councils and other public bodies are now applying the same standard to smaller contracts too, so it's worth getting this right regardless of contract size.

A compliant CRP must contain the following:

• Your emissions baseline — measured in tonnes of CO2 equivalent (tCO2e), covering Scope 1, Scope 2, and your material Scope 3 categories
• A formal commitment to Net Zero by 2050 — this must be an explicit written commitment, not a vague aspiration
• Interim reduction targets with specific dates — for example, a 30% reduction in Scope 1 and 2 by 2030
• Sign-off from a director or senior leader — the plan must carry authority; a named signatory is required
• Publication on your company website — procurement teams will check; it cannot live only in a tender document

That's the skeleton. Now let's talk about how to build it.

How to Build Your Carbon Reduction Plan: Step by Step

Step 1: Gather Your Data

Before you can calculate anything, you need to collect the raw data. For most SMEs, this means pulling together 12 months of records — ideally your most recent complete calendar or financial year. You're looking for:

• Gas and electricity bills (or meter readings)
• Fuel receipts for company vehicles
• Business mileage records (any vehicles you own or employees claiming expenses for)
• Water bills
• Waste records — how much waste you produce and how it's disposed of

Don't overthink this stage. You don't need perfect data — you need a reasonable and consistent set of figures from a defined 12-month period. That period becomes your baseline year.

Step 2: Calculate Your Emissions

Once you have your data, you convert it into tCO2e using the UK Government's official conversion factors, published annually by the Department for Energy Security and Net Zero (DESNZ). These are the only conversion factors you should use — they're updated each year and are the accepted standard for UK reporting. Using outdated or unofficial factors is one of the most common mistakes in SME carbon reports.

Each activity — a litre of diesel, a kWh of electricity, a tonne of waste to landfill — has a corresponding factor. Multiply your activity data by the factor, and you get your emissions figure in tCO2e.

Step 3: Identify Your Material Scope 3 Categories

Scope 1 covers direct emissions from sources you own or control (your gas boiler, your vehicles). Scope 2 covers purchased electricity. Scope 3 is everything else — and it's where most SMEs either go blank or guess.

You don't need to report every Scope 3 category. You need to report the ones that are material to your business. For most SMEs, that means:

• Purchased goods and services
• Business travel (flights, trains, taxis)
• Employee commuting
• Waste generated in operations

If you're a professional services firm, purchased goods may be negligible but business travel and commuting will matter. If you run a manufacturing or construction business, your supply chain emissions will likely dominate. Focus your effort where the numbers are biggest.

Step 4: Set Your Baseline and Calculate Your Total Footprint

Add up your Scope 1, Scope 2, and Scope 3 figures. The combined total, expressed in tCO2e, is your baseline. The year those figures come from is your baseline year. Write both down clearly — everything in your plan will be measured against this number going forward.

If this is your first time doing this, your baseline year is simply the year you're reporting now. Future reports will show your progress against it.

Step 5: Write Your Reduction Targets

This is where a lot of plans go vague. Don't let yours. Targets need to be specific, time-bound, and realistic. A good example: "We will reduce our Scope 1 and Scope 2 emissions by 30% against our 2024 baseline by 2030, and achieve Net Zero across all scopes by 2050."

You can also include the actions you plan to take — switching to LED lighting, moving to an electric fleet, engaging suppliers on their own emissions. These give the plan substance and show you've actually thought about how you'll hit the numbers.

Step 6: Get It Signed Off and Published

The plan must be signed by a director or equivalent senior leader — not just filed away. Their name and title should appear on the document. Then publish it on your company website. A dedicated page titled "Carbon Reduction Plan" works fine. Procurement teams will search for it, so make sure it's findable.

Common Mistakes to Avoid

Having seen a lot of these plans, the same errors come up again and again:

• Leaving Scope 3 blank or vague. Writing "Scope 3: not applicable" is almost never accurate and will raise flags with experienced procurement teams. Even a rough estimate based on spend data is better than nothing.
• Not publishing it on your website. The CRP must be publicly accessible. Submitting it only as a tender attachment does not meet the requirement.
• Treating it as a one-off. PPN 006 expects annual updates. Your plan should be reviewed and updated each year with new data. The year in the document matters.
• Using made-up or outdated conversion factors. If your electricity factor is from 2019 or from a random online calculator, it won't hold up. Use the current DESNZ factors, every time.

You Don't Have to Do This Manually

Everything above is doable — but it's also genuinely time-consuming if you're starting from a blank spreadsheet. You need to find the right conversion factors, apply them correctly across multiple emission categories, keep a consistent structure, and produce a document that looks professional enough to submit with a tender.

That's exactly what CarbonVerified is built to do. You enter your data — your energy bills, your mileage, your waste figures — and the platform handles the DESNZ calculations, structures your Scope 1, 2, and 3 figures correctly, and produces a formatted Carbon Reduction Plan you can publish and submit. No spreadsheet archaeology, no guessing which conversion factor to use.

If you've got a tender deadline coming up, the fastest way to get a compliant CRP is to let the platform do the heavy lifting.