How to show a carbon baseline for a decarbonisation grant

A carbon baseline for a grant application is your business’s total emissions for a recent 12-month period, broken down by source and calculated as activity multiplied by the official UK conversion factor. For most decarbonisation grants, the heart of it is your annual electricity and gas use in kWh, taken from 12 months of bills, converted into kilograms or tonnes of CO2e. State the period, the factors you used and which figures are measured or estimated, and you have a baseline a funder can trust.

It sounds technical. In practice, it is a short table and two sentences of method.

What is a carbon baseline and why do funders want one?

A baseline is a snapshot of your emissions before you change anything. Funders need it for three reasons.

To judge the saving. A project that saves 2 tonnes a year means more to a business emitting 8 tonnes than one emitting 200. The baseline puts your project in context.

To check value for money. Many funders compare grant awarded against carbon saved, so they can fund the projects that do the most per pound.

To verify afterwards. Some schemes ask you to report savings after installation. Without a baseline, there is nothing to compare against.

Some schemes go further and ask for 12 months of energy bills as part of the application, so check the guidance notes before you start.

What should a grant baseline include?

Keep it simple and transparent. A funder should be able to see each step. Include:

• Reporting period. The 12 months covered, such as October 2025 to September 2026.
• Boundary. Which sites and activities are included. “Our single leased unit and two company vans” is enough.
• Sources. Each emission source, with the activity amount and unit.
• Factors. The conversion factor for each source, and the factor set and year.
• Data quality. Whether each figure is measured (from bills or meter readings) or estimated.
• Result. Emissions per source and the total, in kg or tonnes of CO2e.

Here is what that looks like for a small shop with a back office:

Source	Activity	Factor (approx.)	Emissions
Electricity (Scope 2)	18,000 kWh, measured	0.131 kg CO2e per kWh	2.36 tCO2e
Gas heating (Scope 1)	22,000 kWh, measured	0.182 kg CO2e per kWh	4.00 tCO2e
Total Scope 1 and 2			6.36 tCO2e

Factors are approximate values from the 2026 UK government set. Electricity is Scope 2 and gas burned on site is Scope 1. If you have company vehicles, add them as Scope 1 too.

How to calculate your baseline, step by step

1. Gather 12 months of bills. Electricity and gas, plus fuel records if you run vehicles. An annual statement from your supplier is often easiest.
2. Total the kWh for each fuel. Use consumption, not cost. Gas bills usually show kWh already, converted from your meter reading.
3. Check the gas basis. UK suppliers almost always calculate gas kWh on a gross calorific value basis. Use the matching gross CV factor, which is the default in the UK government set.
4. Multiply by the conversion factor. kWh multiplied by kg CO2e per kWh gives kg CO2e.
5. Convert to tonnes. Divide by 1,000.
6. Add it up and write the method. One or two sentences, such as “calculated from 12 months of supplier bills using the UK Government GHG Conversion Factors for Company Reporting 2026”.

Our guide to the kWh, tariff and carbon saving figures grant funders want takes this further, with a full worked example of projected savings.

Which conversion factors should you use?

Use the UK government GHG conversion factors, published each year by the Department for Energy Security and Net Zero and widely known as DEFRA conversion factors. Match the factor year to your reporting period and say which year you used.

One thing to watch in 2026. The electricity factor fell sharply between the 2025 and 2026 sets, from about 0.177 to about 0.131 kg CO2e per kWh. DESNZ’s major changes report puts the drop at 26%, mostly from a cleaner grid and partly from a change in method. If you compare a 2025 baseline with a 2026 one, your electricity emissions may fall even if your usage did not. Be clear about that in your application. Report kWh alongside CO2e so a funder can see the real change in energy use.

If you buy a renewable tariff, report electricity two ways. The location-based figure uses the grid average. The market-based figure counts REGO-backed renewable electricity as zero. Our glossary explains location-based vs market-based reporting in more detail.

What if you do not have 12 months of bills?

You still have options.

• Recently moved in. Some schemes accept however many months you have. Scale up carefully and say you have done so.
• Energy included in rent. Ask your landlord for the meter readings for your unit, or a share of the building total based on floor area.
• Missing a few bills. Use the same months from the previous year, or meter readings, and label the figure as estimated.

Estimates are acceptable as long as they are labelled and explained. What funders dislike is a figure presented as measured when it is not.

Should your baseline include more than energy?

For most council decarbonisation grants, the energy you buy and the fuel you burn are what matter, because that is where the funded project will make a difference. But a fuller footprint helps in two situations.

First, if you run vans or cars, include them. Vehicle fuel is often the largest part of a small firm’s footprint, and funders like to see you know that even if this project is about the building.

Second, if the application asks about your wider plans or commitments, a full picture including business travel, waste and water shows the funder you understand where all your emissions come from. Keep those Scope 3 sources in a separate line so the energy baseline stays clear.

Get your baseline in one sitting

ESG Now turns your bills and business details into a full carbon baseline. You enter electricity and gas in kWh (or estimate from floor area if needed), plus vehicles, flights, rail, waste and water. The report follows the GHG Protocol, uses the UK government factors matched to your reporting period, and shows every calculation as activity multiplied by factor in the appendix. Each figure is labelled as measured, estimated or a data gap, which is exactly the transparency grant funders want.

How long will yours take?

Pick the option that sounds most like your business. You will see a realistic time, what to have nearby and a head start on the questions.

Which sounds most like you?

Sole trader working from homeConsultants, designers, developers, coaches10 to 15 minSole trader or freelancer in a co-working spaceA desk at a WeWork, Regus or local hub10 to 15 minSmall team in a co-working or serviced officeStartups and agencies with 2 to 25 people15 to 20 minSME with its own office and no vehiclesProfessional services, tech firms, studios20 to 30 minSME with vans, cars or regular staff travelTrades, field services, consultancies on the road30 to 45 minShop, cafe, workshop or product businessRetail, hospitality, makers and manufacturers30 to 45 min

Your estimate

About 20 to 30 minutes

Around 50 questions, most of them multiple choice

Still comfortably under half an hour.

You will add your electricity and gas use, plus a quick estimate of your bins. If you do not have the exact figures, the questionnaire works them out from your floor area instead.

Handy to have nearby

• A recent electricity and gas bill (or your office size in square metres)
• How many general waste and recycling bins you have
• Headcount and a rough idea of business trains and flights
• How your team usually gets to work

Missing something? Estimates are fine, and you can come back to any answer later.

Office-based firms usually have clear, low-cost ways to cut their footprint. Your action plan will list them in order.

Start with this profile

First report free. No card needed.

Your answers save as you go. Your first report is free. Start your carbon baseline, see how the numbers are worked out on our methodology page, or visit the grant applications hub for more help.