# Should I split purchases into production and non-production when building Category 1?

Canonical: https://senseible.earth/answers/production-vs-non-production-purchases

It is optional, and usually worth doing. The GHG Protocol says splitting purchases into production-related items (materials, components, parts) and non-production items (office supplies, IT support, services) can follow how your purchase team already buys, which makes the data easier to organise and collect.

## What goes on each side

Box 5.2 of the Scope 3 Standard draws the line like this:

- Production-related (often called direct procurement): materials, components and parts you process or build into your product; goods bought for resale, for traders and distributors only; and plant and equipment used to make the product.
- Non-production-related (often called indirect procurement): office supplies, furniture, computers, phones, travel services, IT support, outsourced admin, consulting, housekeeping and gardening; plus maintenance, repair and operations items such as spare parts.

## The split organises data; it does not change categories

Category 1 holds every purchase not reported in Categories 2 to 8. So machines and other capital goods still go to Category 2, upstream fuel and power losses to Category 3, freight you pay for to Category 4 and travel to Category 6, whichever side of the split they sit on.

## Why it helps a factory

- Production purchases are usually a few vendors with tonnes or kilograms printed on the invoice: steel, granules, yarn, cartons. These suit quantity-based factors or supplier data.
- Non-production purchases are many small vendors billed by value. A spend-based estimate is usually enough.
- The Technical Guidance allows different methods for different activities within one category, so each side can use the method that fits it.

## How to split your purchase register

1. Raw material and packing material ledgers: production-related. Cartons and pallets that leave with your product count here.
2. Consumables, stationery, AMC, repairs, professional fees: non-production.
3. Spare parts for machines: non-production, as maintenance, repair and operations, even though they are used on the shop floor.
4. Check doubtful lines by HSN code, then keep the rule the same every year.

## Adding the non-production side later

Many companies start with production purchases only. The Scope 3 Standard uses this exact case as an example: adding non-production procurement to Category 1 in a later year is a change in activities that can trigger a base year recalculation if the effect is significant. Note what you left out in year one so the change is easy to explain.

## Example: a Ludhiana fastener maker's purchases for one year

- Wire rod: 2,400 t, Rs 14.4 crore (production)
- Plating chemicals: Rs 0.9 crore; cartons: Rs 0.6 crore (production)
- Non-production: Rs 1.5 crore across 140 vendors
- Total Rs 17.4 crore; production side 15.9 / 17.4 = 91% of spend from a handful of vendors, with tonnes on the invoice
- Plan: quantity-based or supplier data for wire rod first; spend-based for the 140 small vendors

Figures are an example.

## What Senseible does here

Senseible reads purchase invoices line by line with HSN code, quantity and unit, and keeps Scope 3 lines in a separate supplier evidence trail, so you can sort production materials from consumables before choosing a method for each.

- [Scope 3 supplier evidence](https://senseible.earth/scope-3-supplier-evidence)
- [Capital goods in Category 2](https://senseible.earth/answers/capital-goods-scope-3-count-in-year-of-purchase)
- [Spend-based estimates and GST](https://senseible.earth/answers/spend-based-scope-3-gst-inflation-currency)
- [Which suppliers to ask first](https://senseible.earth/answers/which-suppliers-to-engage-first-on-scope-3)

Sources: [GHG Protocol Technical Guidance for Calculating Scope 3 Emissions, Category 1: Purchased goods and services](https://ghgprotocol.org/sites/default/files/2022-12/Chapter1.pdf), [GHG Protocol Scope 3 Standard (2011), box 5.2 and section 9.3](https://ghgprotocol.org/corporate-value-chain-scope-3-standard), [GHG Protocol Technical Guidance for Calculating Scope 3 Emissions (2013), introduction](https://ghgprotocol.org/sites/default/files/2022-12/Intro_GHGP_Tech.pdf)

Last reviewed 2026-10-31.