If you are bidding for UK government contracts worth £5 million or more per year (VAT inclusive, from 24 February 2025), you need a Carbon Reduction Plan. Not a vague commitment. Not a one-paragraph statement. A compliant document that meets the requirements set out in Procurement Policy Note 006.
This guide explains exactly what a Carbon Reduction Plan is, what it must contain, and how to create one without hiring a consultant.
What is PPN 006?
Procurement Policy Note 006 (previously known as PPN 06/21) is a UK government policy that requires suppliers bidding for major central government contracts to demonstrate a commitment to reaching Net Zero by 2050.
It applies to contracts awarded by central government departments, their executive agencies, and non-departmental public bodies. The threshold is contracts with a value of £5 million or more per annum (VAT included, following the February 2025 update).
If you are bidding for those contracts, you must submit a Carbon Reduction Plan as part of your tender. Without one, your bid will be marked as non-compliant.
What Must a Carbon Reduction Plan Include?
The government is specific about what qualifies. A compliant Carbon Reduction Plan under PPN 006 must include all of the following:
- Your organisation's total carbon footprint, covering Scope 1, Scope 2, and a minimum set of Scope 3 categories
- A commitment to achieving Net Zero by 2050 at the latest
- Interim targets — measurable milestones on the path to Net Zero
- Current and planned emission reduction measures — specific actions, not vague intentions
- Your organisation's name and the date of sign-off, with sign-off by a director or equivalent senior responsible person
- Publication on your company website — the plan must be publicly accessible
The plan must reflect your UK operations. If you are a small business, that is typically your entire operation.
Understanding Scope 1, 2, and 3 Emissions
This is where most SMEs get stuck. The three scopes come from the Greenhouse Gas Protocol, and they categorise emissions differently depending on their source.
Scope 1 — Direct emissions
These come directly from sources you own or control: company vehicles, gas boilers, manufacturing equipment, refrigerant leaks.
Scope 2 — Indirect energy emissions
Emissions from the electricity and heat you purchase. Even if you do not burn fuel directly, buying grid electricity means you are responsible for the emissions associated with generating it.
Scope 3 — Value chain emissions
Everything else: business travel in vehicles you do not own, employee commuting, purchased goods and services, waste disposal, and more. PPN 006 specifies the minimum Scope 3 categories that must be reported. These were confirmed when PPN 06/21 was updated and renamed PPN 006 in February 2025.
For most SMEs, Scope 3 is the biggest and most complex category — but it is also the one where small, practical changes (cutting business flights, switching suppliers) can make the biggest difference.
Common Mistakes SMEs Make With Their Carbon Reduction Plan
1. Treating it as a box-ticking exercise
Procurement teams are getting better at spotting generic, copy-paste plans. A plan that lists "switch to LED lighting" as its only measure for a digital services business is going to raise eyebrows.
2. Using out-of-date emission factors
Emission factors — the figures used to convert activity data into CO2 equivalent — are updated annually by the Department for Energy Security and Net Zero (DESNZ). Using old factors produces inaccurate figures. Your CRP should use the most recent published factors.
3. Missing Scope 3 categories
The temptation is to skip Scope 3 because it is harder to measure. But PPN 006 is explicit about which categories must be included. Leaving them out makes your plan non-compliant.
4. No director sign-off
The plan must be signed off by a director or equivalent. A document submitted without this is non-compliant regardless of its content.
5. Keeping it off your website
The CRP must be publicly available on your company website at the time of tender submission. It cannot simply be attached to a tender document and left unpublished.
How to Calculate Your Carbon Footprint as an SME
You do not need complex software or a consultancy engagement to calculate your footprint. What you need is your activity data and the correct emission factors.
Start by collecting:
- Annual electricity consumption (kWh, from your bills)
- Annual gas consumption (kWh, from your bills)
- Fuel used by company-owned vehicles (litres or miles by fuel type)
- Business travel (flights, rail, miles in personal vehicles)
- Spend data for purchased goods and services (for Scope 3)
Then apply DESNZ emission factors to convert each data point into tonnes of CO2 equivalent (tCO2e). The factors change each year, so always check you are using the current DESNZ publication.
Once you have your total, you need to set a baseline year (typically the most recent full financial year for which you have complete data), agree on interim reduction targets, and document the specific steps you are taking to hit them.
Setting Credible Interim Targets
Procurement teams and auditors are looking for targets that are:
- Specific and measurable — "reduce Scope 1 and 2 emissions by 30% against our 2024 baseline by 2030" is a target. "Reduce our carbon footprint over time" is not.
- Tied to real actions — each target should link to a concrete measure: EV fleet transition, renewable energy tariff, supply chain review.
- Aligned with a Net Zero 2050 trajectory — the overall plan must demonstrate a credible path, not a cliff-edge commitment with no steps in between.
You do not need to commit to Science Based Targets (SBTi) at this stage, though increasingly it is a differentiator. What you must do is show a genuine, documented trajectory.
Do I Need a Consultant?
For most SMEs, no. The calculation methodology is publicly available. The emission factors are published for free by DESNZ. The PPN 006 template structure is documented by the Crown Commercial Service.
What takes time is pulling the data together, applying the correct factors, and formatting the output so it is compliant and professional enough to submit with a tender.
That is the problem CarbonVerified.uk solves.
The Fastest Way to Create a Compliant Carbon Reduction Plan
CarbonVerified.uk is a purpose-built platform for UK SMEs that need a PPN 006-compliant Carbon Reduction Plan without the cost or complexity of a consultant.
You enter your activity data, the platform applies the current DESNZ 2025 emission factors, and you get a complete Carbon Reduction Plan with an official certificate — ready to attach to your tender or publish on your website.
The output is PPN 006 compliant by design. Every calculation uses the current government emission factors. There are no consultancy fees, no waiting weeks for a report, and no spreadsheet errors from manually applying conversion factors.
For SMEs bidding on government contracts, it is the most straightforward way to get compliant.
Start your Carbon Reduction Plan at CarbonVerified.uk.
Summary: What You Need to Do
If you are bidding for UK government contracts above the PPN 006 threshold:
- Calculate your Scope 1, 2, and required Scope 3 emissions using current DESNZ factors
- Set a Net Zero 2050 commitment with documented interim targets
- List specific, credible reduction measures
- Get director sign-off on the final document
- Publish the plan on your company website before submitting the tender
A Carbon Reduction Plan is not optional for qualifying contracts. But it does not have to be complicated. If you have your utility bills and a clear picture of your business travel, you have everything you need to get started.