Carbon Reduction Plans for SMEs: PPN 006 explained

A PPN 006 Carbon Reduction Plan (CRP) is a short, standard-format document that suppliers must publish before they can bid for in-scope UK central government contracts worth more than £5 million a year. It confirms your commitment to net zero by 2050, reports your Scope 1, Scope 2 and five specific Scope 3 emission categories, and lists the carbon reduction measures you have in place. It is pass or fail, not scored.

If a tender pack has just landed on your desk with “Carbon Reduction Plan required” in it, take a breath. The template is two pages long. The hard part is the carbon footprint behind it, and that is very doable for a small business.

PPN 006 vs PPN 06/21: what changed?

Plenty of people still search for PPN 06/21, and you will still see it quoted in bid documents. Both notes ask for the same thing. What changed is the law underneath them.

• PPN 06/21 was issued in June 2021 under the old Public Contracts Regulations. It still applies to procurements that started before 24 February 2025.
• PPN 006 was published by the Cabinet Office on 17 February 2025 (last updated 10 July 2025) to match the Procurement Act 2023. It applies to procurements commenced on or after 24 February 2025.

The government is clear that this “does not constitute a change in policy”. The main difference is terminology: the CRP is now a condition of participation rather than a selection criterion. If you already had a PPN 06/21 plan, the same structure works. You just need to keep it current and reference PPN 006 in the declaration.

Who has to provide a Carbon Reduction Plan?

PPN 006 applies to central government departments, their executive agencies and non-departmental public bodies when they buy goods, services or works with an estimated value above £5 million a year including VAT. The value is averaged over the contract life, so a four-year contract worth £21 million total is in scope even if year one is smaller.

Buyers can leave it out where it is not relevant or proportionate, but the guidance expects it to apply in most cases. It also applies to frameworks and dynamic markets where individual call-off contracts are likely to exceed £5 million a year. It is not mandatory for the devolved administrations, though other public bodies often borrow the same template. Our public sector tenders hub covers the wider picture.

Subcontractors do not need one under this policy. Consortium members each do.

What does a carbon reduction plan need to include?

The Technical Standard and the template at Annex A set out the content. In short:

1. A commitment to net zero by 2050 at the latest for your UK operations.
2. Baseline emissions: your first full year of data if you have never measured before.
3. Current emissions for the latest reporting year, in tonnes of CO2e.
4. Reduction targets, usually a projection over the next five years.
5. Completed and future carbon reduction measures, such as LED lighting, an EV transition or a travel policy.
6. A declaration and sign-off by a director.

The emissions must follow the GHG Protocol Corporate Standard and use UK Government conversion factors (often called DEFRA factors). There is no requirement to have the footprint audited.

Which Scope 3 categories does PPN 006 require?

This is where people get caught out. You need all of your Scope 1 and Scope 2 emissions, plus exactly five of the fifteen GHG Protocol Scope 3 categories:

Category	What it means for a small firm
4. Upstream transportation and distribution	Couriers, hauliers and delivery services you pay for
5. Waste generated in operations	Your general waste, recycling and food waste
6. Business travel	Trains, flights, taxis and staff using their own cars for work
7. Employee commuting	How your team gets to and from work
9. Downstream transportation and distribution	Delivery of products you sell, where you do not pay for it

If a category genuinely does not apply (a consultancy has no downstream distribution, for example), say so in the plan rather than leaving it blank.

How ESG Now helps, and what you will need to add

To be straight with you: ESG Now does not create the CRP document. It gives you the carbon footprint, baseline and figures you need to complete the official template yourself.

The report covers heating fuels, company vehicles, plant fuel and refrigerant leakage (Scope 1), purchased electricity and EV charging (Scope 2), and in Scope 3 courier deliveries you pay for (category 4), waste (category 5), business travel by air, rail, taxi, hotel and staff-owned car (category 6), and an estimate of employee commuting and homeworking (category 7). Every calculation is shown line by line, with the factor year matched to your reporting period. See the methodology for detail.

For a PPN 006 plan you may still need to add:

• Downstream transportation (category 9), for delivery of products you sell where the customer pays for it. Delivery records are the starting point.
• Better commuting data, if you want to replace the estimate with a short staff survey of distance, mode and days in the office.

Neither is difficult, and the conversion factors are in the same government spreadsheet. The carbon reduction plan template guide shows exactly where each figure goes.

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.

Publication and sign-off rules

The rules here are specific, and getting them wrong is an easy fail:

• Publish it on your UK website, with a link in a prominent place on your homepage. Keeping older plans online is good practice.
• Board approval and director sign-off. State that the board (or equivalent management body) approved it and when. A director must sign it off with their name, job title and date. A physical signature is not required.
• Keep it fresh. Review and update at least annually, ideally within six months of your financial year end. The plan should have been published since the tender notice or in the previous 12 months.
• Mind the 18-month rule. Buyers’ assessment guidance fails a plan whose reporting period ends more than 18 months before the tender notice, unless you give an acceptable explanation.

Also note that CSR statements, policies and case studies are not accepted in place of a CRP. The PPN 006 FAQs are explicit on this. One compliant plan covers every in-scope tender for 12 months.

A sensible order of work

1. Pick your reporting period: usually your last financial year.
2. Build your footprint. You can start your free report now and come back to it later.
3. Add any downstream transport your customers pay for.
4. Fill in the template, write a short net zero commitment and two or three realistic targets.
5. Get board approval, publish, link from your homepage.

Most small firms can do the whole thing in a week of spare hours.