If you are bidding for a UK government contract worth £5 million or more per year, you will almost certainly have come across a Carbon Reduction Plan (PPN 006). It does not matter whether your business is a micro SME or a multinational company.

PPN 006 (formerly known as Procurement Policy Note 06/21 or PPN 06/21) is a policy measure designed to ensure government procurement aligns with the nation’s key sustainability principles.

Understanding Your Carbon Reduction Plan: Key Requirements

A carbon reduction plan in general is a public document detailing an organisation’s commitment to achieving Net Zero by 2050. It presents your environmental measures and confirms your carbon baseline.

A PPN 006 Carbon Reduction Plan must include the following details:

Scope 1 Emissions: Direct greenhouse gas emissions from sources you own, such as company vehicles, boilers, or fuel consumption.

Scope 2 Emissions: Indirect emissions from purchased electricity, heating, or cooling.

Scope 3 Emissions: 5 specific indirect categories include upstream transportation, waste generated, business travel, employee commuting, and downstream transportation.

Specific Targets: Clear milestones demonstrating how you plan to reduce emissions over time.

Director Sign Off: Formal executive level approval, complete with a director signature and date.

Who Must Submit a PPN 006 Carbon Reduction Plan?

Central Government Contracts: Mandatory for businesses bidding for central government contracts worth £5 million or more per year (including VAT).

Supply Chain Subcontracts: Required for Tier 1 and Tier 2 SMEs bidding for smaller subcontracts under £5 million to help prime contractors track Scope 3 emissions.

NHS Contracts: Expected across NHS procurement frameworks under the NHS Net Zero Roadmap, regardless of contract value thresholds.

How UK Net Zero Policy Is Changing for Public Sector Suppliers?

UK sustainability regulations are moving towards stricter operational accountability, which is expected to include the following:

Expanded Scope 3 Reporting: Regulations are shifting from measuring 5 categories to requiring full supply chain transparency across 15 categories under the Greenhouse Gas Protocol.

Tighter NHS Targets: By 2027, NHS will require a comprehensive value chain footprint for all tier suppliers.

Mandated Verification: Buying bodies increasingly demand robust data backing and standardised carbon accounting rather than basic self declaration.

Common PPN 006 Challenges (And How to Avoid Them)

✦ Leaving out mandatory Scope 3 categories due to data collection issues.

✦ Using outdated calculation factors when measuring carbon intensity.

✦ Failing to publish the final plan on a publicly accessible link.

✦ Omitting formal director level sign off and execution dates.

To win UK government and NHS contracts, you should publish a compliant PPN 006 Carbon Reduction Plan covering Scope 1, 2, and required Scope 3 emissions. Start developing your Carbon Reduction Plan today to prepare for future government contract requirements and build a strong sustainability profile.

Book an initial discovery call with us today.