# We rent a warehouse and the landlord pays the electricity. Is it our Scope 2 or Scope 3 Category 8?

Canonical: https://senseible.earth/answers/rented-warehouse-electricity-scope-2-or-scope-3

It depends on your consolidation approach, not on who pays the bill. Under operational control, which most companies use, a tenant that runs the warehouse reports its electricity as Scope 2. Under financial control or equity share, electricity in a warehouse held on an operating lease goes in Scope 3 Category 8.

## Decision table

This follows Chapter 3 and Appendix F of the GHG Protocol Corporate Standard on leased assets. Pick one consolidation approach for the whole company and apply it to every lease.

- Operational control approach, any lease where you run the space: Scope 2.
- Financial control or equity share approach, operating lease: Scope 3 Category 8, upstream leased assets.
- Financial control or equity share approach, finance lease (the asset sits on your balance sheet): Scope 2.
- You rent space but the landlord runs it, for example a third-party warehouse service where you only pay per pallet: neither Scope 2 nor Category 8; it is a purchased service, usually Category 1 or Category 4.

## Why who pays does not matter

Electricity bundled into rent is still electricity your operations use. Rent paid to a landlord changes the evidence you hold, not the scope. The landlord, if it reports, puts the same kWh in its own Category 13 (downstream leased assets) when you have control, so the two reports do not overlap.

## Getting the kWh when you never see the bill

1. Ask the landlord for sub-meter readings for your unit, month by month. This is the best evidence.
2. If there is no sub-meter, ask for the building's discom bills and allocate by floor area or another documented key.
3. If the landlord shares nothing, estimate from an average energy use per square metre for similar warehouses, label it an estimate, and keep asking for data.

## What to record

Write down the consolidation approach, the lease type, the source of the kWh (sub-meter, area share or estimate) and the grid factor used. If you later get sub-meter data, replace the estimate and note the change.

## Worked example: area share of a building bill

- Building electricity for the year from discom bills: 300,000 kWh
- Your area: 2,500 of 10,000 square metres = 25%
- Your share: 300,000 x 0.25 = 75,000 kWh
- 75,000 x 0.710 kg CO2 per kWh = 53,250 kg CO2, about 53.3 t, reported as Scope 2 under operational control

Area share assumes your use per square metre matches the rest of the building. A cold store in a dry warehouse breaks that assumption; get sub-meter data instead.

## What Senseible does here

If you have the landlord's sub-meter statement or the building's electricity bill, Senseible reads the kWh and applies the India grid factor of 0.710 kg CO2 per kWh. It does not choose your consolidation approach or work out an area share for you.

- [Sub-metered electricity in a rented unit](https://senseible.earth/answers/sub-metered-electricity-rented-unit)
- [Operational control vs equity share](https://senseible.earth/answers/operational-control-vs-equity-share)
- [Leased factory emissions: which scope](https://senseible.earth/answers/leased-factory-emissions-which-scope)

Sources: [GHG Protocol Corporate Standard, Chapter 3 and Appendix F (leased assets)](https://ghgprotocol.org/corporate-standard), [GHG Protocol Technical Guidance for Calculating Scope 3 Emissions (2013), Category 8](https://ghgprotocol.org/corporate-value-chain-scope-3-standard)

Last reviewed 2026-10-15.