A vehicle's or machine's fuel is in your Scope 1 only if the vehicle or machine passes your approach's test. Who pays for the fuel does not decide it. Electricity lost in the grid is Category 3, not your Scope 2, unless you own the network.
Where does each vehicle go?
Vehicle | Financial control | Operational control |
Owned, or on a finance lease | Scope 1 | Scope 1 |
On an operating lease, you drive and fuel it | Category 8 | Scope 1 |
Company vehicle an employee also drives to work | As for the vehicle: Scope 1 if owned, Category 8 if on an operating lease | Scope 1 |
Employee's own car used for business | Category 6 | Category 6 |
Rental car on a business trip | Category 6 | Category 6 |
Employee's own car used to commute | Category 7 | Category 7 |
Contractor's vehicle doing your work | Category 1, or Category 4 for transport you pay for | Category 1, or Category 4 |
Categories 6 and 7 cover vehicles not owned or operated by you (Scope 3 Technical Guidance, Table I). A company vehicle stays in your boundary when it is used to commute. Rental cars for business trips are in Category 6 (Scope 3 Technical Guidance, Category 6).
Bluegum, FY26, financial control:
8 owned trucks: 237,000 L diesel × 2.7 kg CO2e/L = 639,900 kg = 640 tCO2e in Scope 1
12 utes on operating leases: 110 tCO2e in Category 8, although Bluegum buys the fuel. See Leased premises, vehicles and equipment.
Staff cars reimbursed per kilometre: 120,000 km × 0.2 kg CO2e/km = 24,000 kg = 24 tCO2e in Category 6
Paying a kilometre allowance does not move an employee's car into Scope 1.
Is hired plant in your Scope 1?
It depends on who operates it.
Dry hire (you operate it) is a lease: Category 8 under financial control, Scope 1 under operational control.
Wet hire (the hire company supplies an operator) is a purchased service: Category 1 under both.
Is fuel a contractor burns on your site in your Scope 1?
No, if the contractor owns or leases the equipment. The fuel is in the contractor's Scope 1. In your inventory it is part of the service you buy:
Category 1 if you expense the work
Category 2 if you capitalise it
Follow your own capitalisation policy. Never count the same work in both.
Bluegum hired a contractor to dig new drainage at the Dandenong distribution centre. The contractor owns the excavator and reported 400 L of diesel. Bluegum capitalised the work.
400 L × 2.7 kg CO2e/L = 1,080 kg = 1.08 tCO2e in Category 2
If the contractor gives no litres, use a spend-based factor on the invoice, in the same category.
If the equipment is yours and the contractor supplies only the operator, it is your Scope 1 under financial control.
NGER has its own rules for contractor fuel at a facility you operate. If you reuse NGER figures under AASB S2, see How the NGER, AASB S2 and GHG Protocol boundaries differ.
Is electricity for a company electric vehicle in your Scope 2?
Yes, when the vehicle itself is in your Scope 1 and 2.
Charged at your site: it is already in that site's electricity. Do not count it again.
Charged at a public charger: Scope 2, from the kWh on the charging receipts.
Charged at an employee's home: Scope 2, because the vehicle is in your boundary. Estimate it and record the method.
Suppose a Bluegum sales manager drove an owned electric car 15,000 km in FY26 and charged 60% of it at home:
15,000 km × 0.18 kWh/km = 2,700 kWh
2,700 × 0.6 = 1,620 kWh at home
1,620 kWh × 0.8 kg CO2e/kWh = 1,296 kg = 1.3 tCO2e in Scope 2
If the car were on an operating lease, the charging would be Category 8 under financial control, as for the utes.
Are electricity losses in the grid part of your Scope 2?
No. Your Scope 2 covers the generation of the electricity you consume. Electricity lost in transmission and distribution is Scope 3, Category 3 (fuel- and energy-related activities). The company that owns or controls the network reports the losses in its own Scope 2 (Corporate Standard, chapter 4).
Category 3 also covers the upstream emissions of the fuels burned to make your electricity. The Australian National Greenhouse Accounts (NGA) Factors give one Scope 3 factor for grid electricity that covers both.
Bluegum's Dandenong distribution centre used 1,075,000 kWh:
Scope 2: 1,075,000 kWh × 0.8 kg CO2e/kWh = 860,000 kg = 860 tCO2e
Category 3: 1,075,000 kWh × 0.1 kg CO2e/kWh = 107,500 kg = 107.5 tCO2e
Same kWh, two factors, two places. Do not add the 107.5 tCO2e to Scope 2.
Electricity your staff use when they work from home is not your Scope 2 either. It is Category 7 (teleworking). Teleworking is optional in the GHG Protocol. Under AASB S2, include it if it is material. See Test which Scope 3 categories are relevant.
Who reports refrigerant in air conditioning your landlord owns?
Under financial control, equipment in a space you hold on an operating lease is in Category 8. Under operational control, equipment the landlord controls is also Category 8. Never report the same refrigerant in your Scope 1 and your Category 8. See Leased premises, vehicles and equipment.
Refrigeration you own is Scope 1. Summit Packs' refrigeration at its owned Geelong factory is in Bluegum's Scope 1 at 100%.
What this means in Avarni
The GHG Category on each Method sets the scope. Load owned vehicle fuel with Transport combustion. Under financial control, load operating-leased vehicle fuel with Upstream leased assets.
Classify kilometre reimbursement accounts in your general ledger to the business travel category, not a Scope 1 category.
Enter a home-charging estimate in the Emissions Hub with Add emission entry and Calculate based on factor. Keep your working for your auditor.
Keep transmission and distribution losses out of your Scope 2 Methods. Calculate them in Category 3.
To move rows loaded in the wrong scope, select them in the Emissions Hub and use Bulk Edit to change Scope & GHG Category.