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v3.0Current version

Published25/08/2026Effective date25/08/2026Release date25/08/2026

Carbon Reporting Methodology

Document Summary

What? This rule aligns the methodologies used to report on the carbon impact of their flexibility service provisionHow? The methodology for reporting carbon impact has been defined here and must be followed for LC 31E reporting requirements. Who? This rule impact all DNOs, and in turn their Flexibility Service Providers.When? This rule comes into force in February 2026Why? This rule aims to make carbon reporting methodology comparable across DNOs.

Propose change

Carbon Reporting Methodology - Flexibility Market Rules - Elexon

Used in this rule as a general term to describe factors that are used in the calculations which can include fuel emission factors, grid intensity factors, and plant efficiency assumptions.

Refers to the carbon intensity of electricity that is imported from the grid in kgCO2e/kWh taking into account the carbon emissions from grid generation, interconnector imports, and potentially network losses.

Otherwise known as rebound or bounce back, refers to when demand side response load increases after a turn-down event as the site recovers to pre-event conditions. This could also refer to a similar rebound effect following realisation of economic benefits as a result of an energy efficiency saving measure.

Defines the scope of the calculation. This can include direct impacts (such as combustion of fuel to generate electricity), consequential impacts (such as the carbon emissions from grid generation to produce and transport electricity imported by a battery), or indirect impacts (such as embedded and end of life emissions attributed to the assets). We also describe narrow or wide boundaries to refer to the extent to which the calculation focuses on direct or whole-life emissions respectively.

0

0.0

Sections 1, 2, 3 and 4 form the legally binding Flexibility Market Rule.

Defined terms capitalised in this document shall have the meaning given in Section 4.

GuidanceSummary of Carbon Reporting Methodology requirements

This section is provided as guidance to the Flexibility Market Rule. Therefore, it is not legally binding and falls outside of the formal change management process.

Context

DNOs are required to report on the carbon impact of their flexibility service provision through their annual Distribution Flexibility Services Procurement Report under Licence Condition 31E. This rule defines a common carbon reporting methodology for that carbon reporting requirement. It standardises how direct and consequential carbon impacts are calculated from delivered energy.

This rule comes into force in February 2026 across DNO sub-markets and aims to standardise carbon reporting methodologies, so reporting is transparent, repeatable and auditable across all DNOs.

Carbon Reporting Methodology Requirements

This rule introduces a standardised methodology for calculating the carbon impact of procured flexibility services using delivered energy. DNOs must apply the prescribed formulae for generation, storage export, and demand or storage import; include direct and consequential effects with stated payback; exclude indirect or embodied emissions. It fixes authoritative sources for fuel factors, efficiencies, and short-run or long-run grid-intensity and sets the minimum reporting content required for DNO Licence Condition 31E procurement reports.

We believe the impact of these requirements to be:

Impact on System Operators	Impact on FSPs
DNOs must follow this methodology for reporting the carbon impact of flexibility services provision within their 31E Licence Condition.	There are no direct impacts on FSPs.

Implementation monitoring requirements

The key requirements are laid out below. A view across the rules is available in our deadline tracker.

Category

Requirement

Trigger for data submission

What we will do with it

Implementation tracking

Basic tracking of implementation status and target date

From 14/01/2026.

Within 10 days of change

Track whether implementation is on track via our Implementation tracker

Flexibility Market Catalogue data

Not used for this rule

Effectiveness monitoring data

Report on the average Carbon Intensity per unit of dispatch Flexibility Services

Publication of SLC 31E Procurement reports (annually by May 1st)

Track the average Carbon Intensity per unit of dispatch via our Effectiveness Monitoring Report.

1Applicability of this Flexibility Market Rule

1.1

This Flexibility Market Rules applies to all DNO Sub-Markets within the Market Facilitator scope.

Innovation trials are not bound by this requirement.

All DNOs shall use the methodology outlined in section 2 when reporting on Carbon impact within their reporting under Standard Licence Condition 31E. This shall start no later than the Implementation Date.

All DNOs shall also provide the data set out in section 3 no later than the timings in section 3.

Variations to this rule are only permitted with an approved Derogation from the Market Facilitator.

The core dates for this Flexibility Market Rule are laid out below.

Table 1: Flexibility Market Rule dates

Published Date	04/02/2026
Implementation Date	06/02/2026
End Date	31/03/2027

2Carbon Reporting Methodology requirements

2.1Methodology

DNOs will perform the calculation by technology category without input from providers, except to confirm the technology category where required.

The calculation includes direct (such as fuel combustion) and consequential carbon impacts (such as battery charging) but excludes indirect impacts (such as embedded emissions in the materials).

The general formula varies by generation, storage (export), and demand / storage (imports).

In the formulae:

kWh is the energy delivered (as opposed to requested) measured at the site of the resource;
η is the energy conversion efficiency of the generator g or storage s;
EF is the fuel emission factor;
GI is the grid intensity factor at import i, export e, or at turndown td; and
Payback% is the consequential increase in load or generation following a turn-down or turn-up event respectively.

Table 2: Formulae for generation, storage (export), and demand/ storage (imports)

Solution	Export increase / import decrease	Export decrease / import increase
Generation	Combustion of fuel (direct) = displace grid generation (consequential) =	Reduced combustion of fuel (direct) = replaced by more grid generation (consequential) =
Storage (export)	Input energy (consequential) = (if from grid), or (if from generator) displace grid generation (consequential) =	Replaced by more grid generation (consequential) = displace grid generation (consequential) =
Demand or Storage (import)	Reduced grid imports (direct) = increased grid imports (consequential) =	Increased grid imports (direct) = reduced grid imports (consequential) =

Solution

Export increase / import decrease

Export decrease / import increase

Generation

Combustion of fuel (direct) =

displace grid generation (consequential) =

Reduced combustion of fuel (direct) =

replaced by more grid generation (consequential) =

Storage (export)

Input energy (consequential) = (if from grid), or (if from generator)

displace grid generation (consequential) =

Replaced by more grid generation (consequential) =

displace grid generation (consequential) =

Demand or Storage (import)

Reduced grid imports (direct) =

increased grid imports (consequential) =

Increased grid imports (direct) =

reduced grid imports (consequential) =

Notes

Generation

When a generator is instructed to export it burns more fuel and displaces the marginal grid generation.
When a generator is instructed to reduce exports, it burns less fuel with the reduction replaced by an increase from the marginal grid generation. For a renewable generator assume a zero EF.
If the generator is displacing imports, the carbon impact is the same as the equivalent amount exported directly to the grid.
For bioenergy, report on both inclusive and exclusive of biogenic CO₂ released during burning of biomass and biofuels by using the relevant emission factors.

Storage (export)

When storage is instructed to increase exports, it displaces the marginal grid generation. The source of that energy and the efficiency of energy conversion is also counted.
When storage is instructed to reduce exports, the calculation assumes a temporal shifting of that export.
If storage input energy is physically supplied from a renewable generator assume zero carbon, this does not apply to non-physical supplies of low carbon electricity, which should assume grid intensity.
If storage discharge is displacing imports, the carbon impact is the same as the equivalent amount exported directly to the grid.
Where DNOs are unsure whether storage is providing export increase or import reduction, use the storage calculation. This ensures carbon impacts are not underestimated and incentivises additional information to be provided.

Demand / storage (import)

When demand or storage is instructed to reduce imports, the avoided energy is met by a reduction in marginal grid generation. There is a consequential rebound in load known as payback.
When demand or storage is instructed to increase imports, the additional energy is supplied by the marginal grid generation. There is a consequential reduction in imports after the event, an equivalent to “payback.”
If demand is shifted, such as deferred EV charging, then payback% is 100%. This should be the default assumption where classification is uncertain.
For genuine turn down (reduction) events, 21% is the assumed payback%, which should be evidenced. This ensures carbon impacts are not underestimated and incentivises additional information to be provided. For import increase the payback% assumption is 100%.
Where DNOs are unsure whether storage is providing export increase or import reduction, use the Demand/storage (Import) calculation. This ensures carbon impacts are not underestimated and incentivises additional information to be provided.

Short-run or Long-run grid intensity

Decide by persistence and pick the grid-intensity factor based on whether the intervention changes the baseline for years (LR) or is a temporary dispatch (SR).
Use SR for event-based flexibility (turn-up/turn-down, battery cycles, short campaigns) where impacts don’t persist beyond the event window. If in doubt, default to SR.
Use LR only where there’s evidence of a sustained, multi-year shift in demand or generation (e.g., efficiency measures or enduring scheduled services that alter the baseline).

2.2Conversion Factors

DNOs should use the conversion factor sources presented in the following table.

The data source used for grid intensity is a static value, all grid intensity factors is therefore equal (except for short-run and long-run factors). In the case of storage, and in the case of demand, . The different notations in the formula allows for inclusion of time series grid intensity factors in future.

Table 3: Notes on grid intensity factors

Factor type	Source	Notes
Fuel emission factors	BEIS/Defra[1]	CO2e, Gross CV. Updated annually.
Efficiency	BEIS/Defra[2]	The DUKES report is updated annually, however the others are one-off reports.
Grid intensity	BEIS Electricity Generation Costs 2020[3] – [A] Coal – DUKES[4] – [B] BEIS Storage Costs and Assumptions 2018[5] – [C]	Short-run: EF of natural gas divided by efficiency of an OCGT e.g. based on 2022 EF, 183gCO2e/kWh / 35% = 523gCO2e/kWh. Long-run: Average of consumption long-run marginal factors, use most recently updated value rather than forecasts (2021 at time of writing). Irregularly updated. Note, long-run refers to interventions that results in sustained change in demand/generation over years. Short-run refers to interventions that result in temporary change in demand/generation.
Payback%	For demand-turn-down: Low Carbon London report[6] For demand-turn-up: Open Network working group view	Demand-turn-down: From a one-off innovation trial. Assume 21% for reduction services, based on the average of trial events. Assume 100% for load shifting solutions. Demand-turn-up: Assume 100%

2.3Technology categorisation

The technology categorisations are given in the following table, which maps licence condition 31E technology categories by the relevant technology categories required for selecting the appropriate conversion factor. This is advisory rather than prescribed to allow for some flexibility where the mapping is incomplete.

Table 4: Licence condition 31E technology categories

Licence Condition 31E Technology Categorisation	Emissions Factor (and Grid intensity factor)	Efficiency	Demand payback
Advanced Fuel (produced via gasification or pyrolysis of biofuel or waste)		Advanced Conversion Technologies [A]
Biofuel - Biogas from anaerobic digestion (excluding landfill & sewage)		Anaerobic digestion (AD) [A]
Biofuel - Landfill gas	Biogas - Landfill gas
Biofuel - Other	Biogas – Biogas	Energy from Waste (EfW) [A]
Biofuel - Sewage gas	Biogas - Biogas
Biomass	Biomass - wood logs, wood chips, wood pellets, grass/straw	Biomass – dedicated [A]
Demand	Grid intensity		Payback (21%), shifting (100%)
Fossil - Brown coal/lignite	Figures not available
Fossil - Coal gas
Fossil - Gas	Gaseous fuels - natural gas	OCGT, CCGT, Recip [A]
Fossil - Hard coal	Solid fuels - Coal (electricity generation)	Coal [B]
Fossil - Oil	Liquid fuel - Diesel (average biofuel blend)	Diesel [A]
Fossil - Oil shale
Fossil - Other	Other factors available
Fossil - Peat
Geothermal
Hydrogen
Nuclear
Solar
Stored Energy (all stored energy irrespective of the original energy source)	Grid intensity	Pumped hydro, CAES, thermal energy storage, Lithium Ion, Zinc, Flow, Sodium Sulphur [C]
Waste Water (flowing water or head of water)
Wind
Other

2.4Report Format

DNOs should include the following paragraph in their Distribution Flexibility Services Procurement Report to summarise the methodology to readers and references this methodology document.

The carbon impact calculation presented in this report follows the standard methodology laid out by the market facilitator. The calculation varies depending on whether the flexibility asset is generation, storage (export), or demand / storage (import). The impacts include direct impacts (such as burning fuel) and consequential impacts (such as demand payback) but not indirect impacts (such as embodied carbon). The conversion factors used are generally industry standard which include grid-intensity, plant efficiencies, fuel emission factors, and payback assumptions. Asset specific factors are not used to maintain consistency between DNO reports which means that the methodology reports an approximation of carbon impacts. The detailed methodology is available on the Market Facilitator Repository.

Table 5 in the following format should be included in the Distribution Flexibility Services Procurement Report showing energy (requested and delivered) and carbon impact (broken into direct and consequential). An accompanying narrative should explain what the data shows and use of charts to present the information is encouraged.

Energy delivered can differ to energy requested due to under or over delivery. Over-delivery is capped at 150% (captures over-delivery but excludes scenarios where over delivery may not be a consequence of the dispatch). Delivered energy is used to calculate carbon impacts.

Subject to agreement with Ofgem to update the data template, the carbon impact per dispatch should be added as another column in the template. In addition, technology sub categorisations based on Embedded Capacity Register / G99 should also be added to reflect different solutions within each Licence Condition 31E category, for example if demand is shifted or reduced or the different types of Stored Energy.

For bioenergy, add an additional column to “Direct carbon impact”. In the first of these columns, report on the carbon impact exclusive of biogenic CO2 using the default emission factors, and in the second column report on the biogenic CO2 using the “outside of scope” emission factors, from the BEIS/Defra conversion factors (full set). The former calculation nets off the CO2 released at combustion with the CO2 absorbed during the growth phase of the bioenergy, whilst the latter calculation reports the CO2 released at combustion. This is in line with the GHG Protocol guidance for corporate accounting.

Provide the dispatch intensity metric (total carbon impact divided by the total energy delivered).

Table 5: License condition 31E table template.

Licence condition 31E Technology Category	Requested energy (MWh)	Delivered energy (MWh)	Direct carbon impact (kgCO2e)	Consequential carbon impact (kgCO2e)
Fossil – Gas
Demand
Stored Energy
…
Total

3Market Information

3.1Implementation tracking

The DNOs must provide the Market Facilitator with the data set out in Table 6 for each Sub-Market in scope of this rule. The data provided should accurately reflect their implementation of the rule within each of each Sub-Market.

The expected values required for compliance are also set out in Table 6.

Initial data shall be sent no later than 20 working days after the Published Date of this Flexibility Market Rule.

Updates shall be sent as soon as reasonably practical, and no later than 10 working days after any changes to the values.

Elexon reserves the right to publish this data within its Implementation Tracker.

Table 6: Implementation tracking requirements

FMR-CR	Parameter	Required value (per Sub-Market)
Implementation Status	Dependent on date: Before Implementation Date: Not yet started, Implementing, Paused, Implemented Between Implementation Date and End Date: Implemented After End Date: Superseded
Target Implementation Date	No later than Implementation Date

FMR-CR

Parameter

Required value (per Sub-Market)

Implementation Status

Dependent on date:

Before Implementation Date: Not yet started, Implementing, Paused, Implemented
Between Implementation Date and End Date: Implemented
After End Date: Superseded

Target Implementation Date

No later than Implementation Date

3.2Flexibility Market Catalogue data

Not used for this Flexibility Market Rule

3.3Effectiveness monitoring

The following metrics shall be used to assess the effectiveness of the rule.

The DNOs must provide the Market Facilitator with any Additional Input Data as set out in Table 7 below for each Sub-Market in scope of this rule. The data provided should accurately reflect their implementation of the rule of each Sub-Market.

The expected values minimum required for compliance, if any, are also set out in Table 7.

Initial Additional Input Data shall be sent no later than 20 working days after the Implementation Date of this Flexibility Market Rule.

Additional Input Data shall be sent in accordance with the Cadence set out in in Table 7.

Updates to Additional Input Data shall be sent as soon as reasonably practical, and no later than 10 working days after any changes to the values.

Elexon reserves the right to publish this data within its Implementation Tracker.

Table 7: Effectiveness monitoring metrics

Metric 1	Description	Average Carbon Intensity per unit of dispatched Flexibility Services per DNO
	Why are we tracking this?	To understand the carbon impact of flexibility service provision across DNOs
	Cadence	Yearly
	Data Source	Existing Data - SLC31E Procurement Report - (Total Direct carbon impact + Total Consequential carbon impact)/(Requested energy) - As set out in section 2.4 of this rule. Additional Input Data - None
	What does good look like?	0
	Minimum Requirement	-

4Glossary

4.0

The following definitions are specific to this Flexibility Market Rule. These are supplemented by the definitions in the Market Facilitator Glossary. If there is an inconsistency between definitions, the definition in this document shall prevail.

Glossary

Term	Aliases	Definition
Conversion factors	-	Used in this rule as a general term to describe factors that are used in the calculations which can include fuel emission factors, grid intensity factors, and plant efficiency assumptions.
Grid intensity	-	Refers to the carbon intensity of electricity that is imported from the grid in kgCO2e/kWh taking into account the carbon emissions from grid generation, interconnector imports, and potentially network losses.
Payback	-	Otherwise known as rebound or bounce back, refers to when demand side response load increases after a turn-down event as the site recovers to pre-event conditions. This could also refer to a similar rebound effect following realisation of economic benefits as a result of an energy efficiency saving measure.
Reporting Boundary	-	Defines the scope of the calculation. This can include direct impacts (such as combustion of fuel to generate electricity), consequential impacts (such as the carbon emissions from grid generation to produce and transport electricity imported by a battery), or indirect impacts (such as embedded and end of life emissions attributed to the assets). We also describe narrow or wide boundaries to refer to the extent to which the calculation focuses on direct or whole-life emissions respectively.

FMR: Carbon Reporting Methodology - Amendment record

Guidance

This section is provided as guidance to the Flexibility Market Rule. Therefore, it is not legally binding and falls outside of the formal change management process.

Version	Published Date	Document Status	Description of Changes	Change Proposal Reference	Market Facilitator Decision Report Ref
1.0	12/12/2025	Final	Document Published	-	-
2.0	04/02/2026	Final	Housekeeping changes	CP002	CP002
3.0	25/08/2026	Final	End date added	CP005	CP005

4.0.2

Annex 1: Associated meta-data

Guidance

This annex is provided as guidance to the Flexibility Market Rule. Therefore, it is not legally binding and falls outside of the formal change management process.

Identifier	FMR-CRM
Title	Carbon Reporting Methodology
Type	Flexibility Market Rule
Collection	Sub-Market Alignment
Audience	DNOs, Flexibility Service Providers
Expertise	Carbon Reporting
Owner	Market Facilitator
Expected benefit	Aligned approach to reporting on carbon impact of flexibility
Related end-to-end process reference	V.6 Report on Service Delivery
References
IsReferencedBy
Published version number	3.0
Applicability	All DNO sub-markets
Published Date	04/02/2026
Implementation Date	25/08/2026
End Date	31/03/2027
Terms of variations	Approved Derogation
IsReplacedBy	N/A
Replaces	N/A
Status	Final
Change since last version	This Rule will become obsolete once FMR-DDR DNO Data Reporting is implemented on 31 March 2027.
Description	What? This rule aligns the methodologies used to report on the carbon impact of their flexibility service provision How? The methodology for reporting carbon impact has been defined here and must be followed for LC 31E reporting requirements. Who? This rule impact all DNOs, and in turn their Flexibility Service Providers. When? This rule comes into force in February 2026 Why? This rule aims to make carbon reporting methodology comparable across DNOs.