In the context of greenhouse gas (GHG) reporting, conversion factors, also known as emissions factors, are a crucial tool for calculating and reporting emissions. They allow organisations to translate real-world activity data (e.g. litres of fuel burned or miles driven) into a single, comparable measure of carbon dioxide equivalent emissions.
Conversion factors are updated annually to reflect the latest scientific data, grid decarbonisation, and changes in methodology. Earlier this month, the Department for Energy Security and Net Zero (DESNZ) and Defra released the UK Government GHG Conversion Factors for company reporting. This includes a number of important updates for organisations reporting their emissions. While many areas remain stable, there are two significant changes for electricity and transport that could affect carbon footprints and reductions targets.
1. Drivers of change: Electricity factors drop by 26%
The most significant update in 2026 is a 26% reduction in UK location-based electricity emissions factors.
Why has this changed so significantly?
- Grid decarbonisation: The primary driver of the decrease is changes to the grid mix from 2023 – 2024, accounting for a 16% decrease in emissions factors since the previous factors. Grid decarbonisation is the primary driver, largely reflecting increased renewable generation and a reduced reliance on gas-fired power1.
- Data improvements: Previous updates had been working on a two year time lag, this has been reduced to only one year in 2026 using latest energy trends statistics. This means the latest factors effectively “catch up” on previous updates, capturing more than a single year of changes in the electricity grid mix and grid losses.
- Additional improvements include greater understanding of imports/exports and fixing prior calculation issues.
Potential knock-on effects
Because electricity emissions factors feed into a number of other calculations, this reduction has a range of knock-on effects across reported emissions, even in areas that may not obviously appear electricity-related.
- Electric vehicles: Lower electricity emissions reduce the reported carbon intensities of EVs.
- Transmission & distribution losses: Updated electricity methodologies affect how losses are calculated.
- Well to tank (WTT): Updated assumptions better reflect changes in fuel mix and upstream emissions.
- Homeworking emissions: Lower electricity factors reduce reported emissions, with a large impact due to the time since the last update.
What this means for organisations
Due to the significant reduction in UK location-based electricity emissions factors, organisations that have electrified their UK operations are likely to see noticeable reporting emissions reductions, even where actual energy consumption has increased.
This could easily be misunderstood internally, particularly against the backdrop of rising energy costs. For this reason, leadership teams need to interpret results carefully and continue prioritising energy efficiency, rather than assuming performance has inherently improved.
2. Business travel (land): A post covid picture
The second major change affects business travel. A recalibration has been undertaken to better reflect a post pandemic reality in the transport sector. Some key significant changes are as follows:
- International Rail: 154-156% increase due to significant changes in service patterns and rolling stock utilisation (how train operators manage their trains). Previous factors used assumptions derived from before the Covid pandemic.
- Coaches: 42-43% increase, reflecting more detailed data received from large coach operators, replacing outdated data that implied unrealistically high occupancy rates.
- London underground: 44-45% decrease, amended to reflect the changes to electricity grid emissions, as well as large changes to passenger kilometres compared to previous figures that used pre covid assumptions.
- National rail: 13% decrease following updates to fleet composition and passenger usage since the last revision in 2021.
What this means for organisations
Much like the risk of the false progress in electricity emissions reductions, the business travel updates will affect Scope 3 reporting. Results should therefore be interpreted carefully, particularly given the increasing focus on and expectations around Scope 3 reductions. There are also greater potential benefits in switching from domestic air travel to domestic rail travel. Not only will the switch benefit from the obvious changes from air to land based travel, but the additional 13% boost on top of that.
Looking beyond the numbers
The release of the 2026 DEFRA emissions factors highlights the significant risk of “false progress”, where decarbonisation efforts may be deprioritised against other emerging climate and business risks. This is where dual tracking comes in. Dual tracking is the practice of monitoring both carbon emissions and the underlying energy or activity data, helping distinguish real performance improvements from changes caused by updated emission factors.
These updates also have implications for capital investment decisions. Electrification strategies may now appear more successful on paper due to lower electricity emissions factors, potentially strengthening the business case for transition. However, organisations must balance this against ongoing cost pressures and the broader macro risks around energy security. In practice, this means ensuring that investment decisions are not driven solely by emissions reporting improvements, but are grounded in long-term resilience, cost management, and genuine reductions in energy demand.
A similar dynamic applies to Scope 3 emissions, where changes to business travel factors may create the impression of progress or setbacks without any real change in travel behaviour. This reinforces the need to track underlying activity data alongside carbon results and can highlight cost reductions straight off the bottom line in a period of low business confidence.
Implications for investment & long-term strategy
Looking ahead, these changes reflect a wider trajectory as the UK progresses towards net zero, with continued decarbonisation of the electricity grid and ongoing shifts in transport systems and travel patterns. As a result, emissions factors for both electricity and business travel are likely to keep evolving, meaning organisations may see fluctuations in reported Scope 2 and Scope 3 emissions without equivalent changes in underlying activity.
While the overall trend is likely to remain downward, supported by current UK policy and clean power ambitions, the pace of change may not be linear. External pressures, including energy security concerns and geopolitical events, may influence the speed of transition and lead to short-term variability in emissions factors.
This reinforces the importance of setting long-term targets and investment strategies that focus on genuine energy and demand reduction, electrification, and resilient operations, rather than relying on year-on-year emissions movements driven by external or methodological changes.
Many long-term emissions roadmaps already assume substantial reductions driven by UK grid decarbonisation and broader system changes. While this aligns with national net zero pathways, it means a large proportion of projected emissions reductions may occur independently of organisational action, reinforcing the need to distinguish between system-driven and internally driven progress.
The 2026 updates are a reminder that carbon reporting is not static. As the UK grid continues to decarbonise and data improves, organisations will increasingly see reductions in emissions driven more by external system change than internal action.
For sustainability leaders, this raises an important challenge: separating real progress from reported progress. Those who respond well will go beyond headline emissions figures, tracking energy, travel, and operational drivers alongside carbon, and making decisions based on long-term resilience rather than short-term reporting gains.
While emissions factors may change year to year, the fundamentals of the underlying data do not, and there are savings and opportunities to be extracted from them.
At Acclaro Advisory, we work alongside organisations to turn sustainability ambition into meaningful business transformation. If you need support with your carbon footprint and wider net zero strategy, get in touch with our team.
