This blog reflects recommendations advanced through the Scope 2 Technical Working Group and formally approved by the Independent Standards Board for public consultation via vote, resulting in proposed revisions to the 2015 Scope 2 Guidance. All proposals remain subject to public consultation. 

1. Recap of Hourly Matching and Deliverability Requirements 

In the first installment of this blog series, key elements of the draft revisions to the location-based method (LBM) and market-based method (MBM) were presented, alongside feasibility provisions. Please refer to that post for an overview of those topics: Upcoming Scope 2 Public Consultation: Overview of Revisions | GHG Protocol.  

Part 2 of this series focuses on the proposed revisions to the market-based method. To help support the provision of consultation feedback, this article seeks to explain the features of the proposals recommended by the Scope 2 Technical Working Group (TWG) and approved by the Independent Standards Board (ISB), situating them within a scope 2 corporate inventory context. 

Public consultation is a critical component of the GHG Protocol Standard Development and Revision Procedure, and we will invite comment on the full package of Location-based and Market-based Method updates and feasibility measures. That input will help shape the final Scope 2 Standard. Alongside the scope 2 consultation, we also will invite feedback on consequential methods for estimating avoided emissions related to the power-sector to inform subsequent AMI work on that topic. 

Further details on how to engage in the consultation will follow soon. 

2. Summary 

Proposed updates to market-based accounting requirements prioritize increased accuracy, better decision-making to support ambitious climate action, better alignment with external reporting frameworks, and feasibility for global reporters. In addition, updates seek to draw clear distinctions between inventory and project accounting, laying the groundwork for the Actions and Market Instruments Technical Working Group (AMI TWG) to further develop comprehensive reporting frameworks that support both methods of emissions accounting. Consistent with the GHG Protocol Decision-making Criteria and Hierarchy (Annex A), the key rationale for these proposals include: 

• Accuracy: Hourly matching with deliverability improves the accuracy of scope 2 inventories, decreasing the prevalence of corporations reporting inputs that they could not have consumed.
• Supporting ambitious climate action: Hourly matching with deliverability creates price signals for times and places where renewables are not already abundant, likely increasing the prevalence of impactful inventory procurement. Hourly matching creates incentives for novel technologies that will be needed at scale for fully decarbonized grids, ensuring that early action by ambitious corporations can accelerate this transition.
• Feasibility and phased implementation: Proposed feasibility measures, including a phased implementation, options for reporting where hourly data is not yet present, and exemptions for smaller organizations, promotes a balance of accuracy, impact, and feasibility.
• Clarified roles of inventory and project accounting: Proposed updates focus on improvements to inventory accounting measures and seek to clarify how organizations should report actions that influence emissions outside their value chains. 

The context and rationale are described more thoroughly in the remainder of this post.  

3. Context: The Boundary of Scope 2 Inventory Accounting  

It is important to restate the context for this revision: corporate inventory accounting.  

By definition, scope 2 addresses indirect greenhouse gas emissions associated with the generation of both purchased and consumed electricity, steam, heat, and cooling, that is, energy a company both buys and uses. The Scope 2 Technical Working Group (TWG) is working to refine corporate inventory methods to account for and report these emissions.  

Inventory accounting is an attributional approach: it assigns emissions within defined organizational and operational boundaries. By contrast, project accounting uses a consequential approach, which estimates system-wide impacts relative to a counterfactual baseline. Both approaches are useful, but they utilize different accounting methods and therefore must remain distinct in reporting to maintain consistency across scopes 1, 2, and 3. For more on the differences between these two approaches, please see this comparative review: Inventory and Project Accounting: A Comparative Review | GHG Protocol 

This distinction matters for credibility, comparability, and alignment with how inventories are used. Mandatory disclosure and target-setting programs such as ISSB, EFRAG, and CARB use the GHG Protocol and reference or align with its scope definitions to enable like-for-like reporting. Mixing consequential metrics into scope 2 would result in information that is less useful for decision-making and would ultimately undermine such alignment. Accordingly, this proposed revision seeks to reinforce scope 2’s role as an inventory method working alongside scopes 1 and 3 to deliver a coherent, scope-based corporate GHG accounting system. 

Critically, project accounting approaches still play an important role. Many stakeholders have proposed ways to standardize project accounting methods for clean electricity procurement, such as avoided emissions assessments or other counterfactual analyses. As established in existing GHG Protocol standards and reaffirmed by the ISB, where reported, these should be presented as separate, complementary disclosures alongside scope 2 inventory totals, not within them. 

In addition to the proposed scope 2 inventory accounting revisions, the public consultation will include material on estimating the avoided emissions of electric sector actions using consequential methods. This material will support the work of the Actions & Market Instruments (AMI) technical working group, which is advancing standardized, sector-agnostic requirements for quantifying and reporting impacts such as avoided emissions.  

The AMI TWG’s complementary metrics, and all other updates across the corporate suite (Corporate Standard, Scope 2, Scope 3), are scheduled to take effect on a coordinated schedule. 

With these inventory parameters in place, the remainder of this post explains how the proposed hourly matching and deliverability criteria seek to align with GHG Protocol's decision-making criteria and hierarchy and seek to strengthen scope 2 inventory accounting by improving accuracy, decision-usefulness, and support for ambitious climate action. Feasibility measures and legacy provisions are included to keep implementation practical.  AMI is developing separate, disaggregated impact reporting, subject to TWG/ISB governance and public consultation, so actions outside inventories have a clear reporting pathway. 

4. Rationale for Proposals 

4.1 Improve Accuracy for Decision-Making 

What does accuracy mean for a scope 2 inventory? 

Accuracy, in alignment with the GHG Protocol Accounting and Reporting Principle of accuracy, matters because it enables users to make decisions with reasonable assurance about the integrity of reported scope 2 information. In practice, this means a scope 2 reporting method ensures that emissions from both purchased and consumed electricity are not systematically over- or understated, and that uncertainties are reduced as far as practicable. 

Challenges with the status quo 

Today, reporting organizations quantifying market-based emissions can purchase electricity with a significant degree of flexibility. The Scope 2 Guidance (2015) requires market-based claims to meet vintage and market-boundary criteria: certificates should match the time of consumption “as closely as possible” and be sourced from the “same market” as the load. In practice, this has meant using same-year certificates from anywhere within a national or even multi-country market (e.g., EU; U.S.–Canada), a convention that can be much broader than the physical grids and hours that supply consumption.  

These rules have helped scale clean energy procurement over the past decade, during a period of early market development. Innovative renewable energy procurement methods, such as virtual power purchase agreements (VPPAs), have seen tremendous growth among corporate entities wishing to address their scope 2 market-based emissions. However, many of these financed projects sit on grids separate from a company’s operations, and the power is generated at hours that do not align with when the company uses electricity. This disconnect means these projects are often not tied to the grid that supplies the company’s operations and therefore are not tied to its value chain, reducing credibility and comparability. 

To better understand how to ensure accurate and credible scope 2 emissions totals, two realities of electricity grids must be addressed: 

1. Electricity is produced and consumed nearly instantaneously on the electricity grid. It is not physically possible to have consumed electricity generated at a different time without energy storage. Therefore a generator-specific claim is most accurate when the generation occurs at approximately the same time as the consumption to which it is matched.
2. Electricity is distributed on electricity grids that do not always align with national boundaries. To maintain the most accuracy and credibility, generator-specific claims would need to come from resources on the same grid or on a grid linked by transmission that can physically deliver to the point of consumption at the relevant time.  

Proposed updates to the market-based method 

The proposed revisions recommended by the scope 2 Technical Working Group and approved by the Independent Standards Board to progress to public consultation seek to address the challenges with the status quo by requiring organizations using certificates to match them to consumption hourly, and from deliverable grid regions. This approach is consistent with how power markets settle supply and demand by hour within defined boundaries. These proposed requirements would apply only to certificate-backed market-based method claims, not to totals reported using residual mix or other default factors. Several exceptions and feasibility measures are included in the proposed revisions, as discussed below in section 5.  

The proposed updates seek to help ensure that organizations systematically neither over nor under report their scope 2 emissions, that uncertainties are reduced, and that claims are made for generators that delivered power into the grid at the same time and location as consumption. This seeks to better reflects the physical reality of a shared grid and aligns scope 2 accounting with how electricity is traded. 

These proposed revisions represent accuracy compromises on both the temporal and geographic matching requirements. Power systems dispatch resources every few minutes (e.g., five-minute intervals), as conditions do shift within an hour. For feasibility reasons and aligned with research, the revisions propose the use of hourly matching of certificates as a practical cadence for accurate market-based allocation. Likewise, adopting fixed deliverability regions acknowledges that demonstrating true deliverability requires considering complex transmission constraints that vary over time. The use of fixed deliverability regions seeks to provide a stable, physically grounded proxy for what can reasonably reach load. Consistent with ISB-aligned direction and the Decision-Making Criteria and Hierarchy (DMCH), the proposed revisions aim to balance accuracy and feasibility.  

4.2 Support Ambitious Climate Action 

Ambitious climate action depends on having accurate inventories with credible allocation and reporting of electricity-use emissions. These proposed updates seek to strengthen that role while broader impact accounting proceeds in parallel through the AMI Technical Working Group.  

What does ‘supporting ambitious climate action’ mean for a scope 2 reporting method?  

As outlined in the Corporate Standard and Scope 2 Guidance, there is not always a direct cause-and-effect link between a single organization’s energy use and grid-level emissions. As per the GHGP Standards and the Decision-Making Criteria, a scope 2 reporting method should seek to support decisions that, in aggregate over time, align with global decarbonization goals within the boundaries of inventory accounting. In practice, that means market-based method reporting (e.g., matching consumption with energy attribute certificates) should yield inventory results consistent with system-level electricity-sector emissions reductions over time. 

Challenges with the status quo 

Feedback and research (Detailed Summary of Responses from 2022-2023 Scope 2 Guidance Stakeholder Survey, Scope 2 Discussion Paper and The Brattle Group Report) provided to the Secretariat highlight that the current technical requirements of the market-based method may not consistently ensure that reported reductions in scope 2 emissions recognize actions that genuinely contribute to overall emission reductions on the grid. This question has increasingly surfaced in mainstream media and academic publications, especially as many organizations set and report progress toward emission reduction targets based on their scope 2 market-based method emissions. Acknowledging these challenges, many users of the GHG Protocol Scope 2 Guidance have suggested that updates are necessary. 

In parallel, some mandatory disclosure frameworks, such as IFRS, have elected to not require use of the market-based method for scope 2 reporting, and instead only require location-based reporting. Voluntary programs (e.g., SBTi, RE100) have proposed their own eligibility and boundary rules to address these challenges.  

Collectively, these decisions reflect two linked concerns. First, the current market-based method does not consistently provide signals that, in aggregate over time, support decisions aligned with global decarbonization goals. Second, fragmentation in how the market-based method is applied across programs can weaken interoperability with frameworks that use GHG inventories and undermine cross-company comparability, a key decision criterion considered by the TWG and ISB. Absent updates to calculation requirements, the MBM risks losing relevance and credibility in target setting initiatives as well as climate-related financial disclosure programs, which in turn undermines its ability to support ambitious climate action. 

Research on impact of hourly and deliverability requirements for voluntary procurement   

The proposed revisions further take into consideration that in regions where renewable power is already cost-competitive, several studies show that market-based accounting rules without hourly matching and deliverability can allow companies to meet targets that, even when undertaken with an intent to reduce emissions, do not make meaningful contributions to global decarbonization.  

Hourly and deliverability requirements break up the supply of certificates into more granular times and locations. This can create price signals for renewable energy production in locations and times where it is not already abundant, which research suggests can lead to better system-wide impact. 

Additionally, hourly price signals create financial incentives for energy technologies (such as energy storage, clean firm power, demand response, etc.) that will be needed at scale to fully decarbonize grids. Grid operators echo this direction: the European Network of Transmission System Operators for Electricity (ENTSO-E), the association of Europe’s transmission system operators, supports hourly matching and sourcing certificates from grid areas that can physically deliver to the customer’s load. Further, a report by UK National Energy System Operator (NESO) finds that hourly matching can improve credibility and incentivize storage and demand-side response, aligning with power-system needs.  

On the other hand, research also supports that annually matched certificate purchases can be impactful and cheaper than hourly matching in some contexts. Other strategies with additional de-risking, such as long-term VPPAs, have helped finance new renewables. These non-time-matched, non-deliverable procurements can be impactful, but as discussed above, they sit outside an inventory framework. They are more appropriately reflected through a separate framework under development in the AMI TWG to recognize the impact of actions. By separating them from the inventory reporting process the impact estimation methods can be made more rigorous, resulting in more accurate claims.  

Taken together, this research and grid-operator input supports the position put forward in the proposed update that hourly and deliverability requirements can drive ambitious climate action within an inventory framework: by disaggregating the pool of certificates into more granular times and locations, price signals can be created that incentivize balanced portfolios and novel technology development, and decision-usefulness and comparability can be improved. 

Proposed updates to the market-based method  

The proposed revisions recommended by the Scope 2 TWG and approved by the Independent Standards Board to progress to public consultation seek to address these challenges with the status quo by requiring organizations using contractual instruments to match them to consumption hourly, and from deliverable grid regions. Another element of the proposed updates is the allocation of Standard Supply Service (SSS), which proportionally allocates energy that is mandated by law or publicly funded. Each reporter may claim only its pro-rata portion of SSS, and any unclaimed attributes are not available for voluntary MBM claims. The framework seeks to help prevent SSS which should be fairly allocated to all consumers being procured by specific organizations, narrowing the pool of clean energy available for voluntary procurement. For an overview of the proposed updates to both the market- and location-based methods, please see: Upcoming Scope 2 Public Consultation: Overview of Revisions | GHG Protocol. 

These updates seek to better align reported outcomes with the realities of the electricity grid and support shifts in clean energy procurement toward hours where the available clean energy in a deliverable market boundary, beyond SSS, does not yet match demand. These updates seek to keep MBM as a corporate-inventory tool, but within narrower guardrails aligned with value-chain boundaries so totals are more comparable and defensible and better steer procurement toward actions consistent with sector decarbonization. Broader impact claims remain out of scope for MBM and proceed in parallel through AMI as complementary guidance. 

5. Feasibility measures 

To ensure that changes to the market-based methods are feasible to implement for reporting organizations, several feasibility options have been proposed, including load profiles, thresholds, and a legacy clause, along with an anticipated phased implementation period providing multiple years between approval through the GHG Protocol governance process and required adoption in the updated GHG Protocol Standard. These are based on the following considerations during the revisions process:  

Access to hourly energy-attribute data is emerging but not yet universal. A growing number of certificate registries and tracking systems are adding timestamp capabilities, with policy momentum in Europe encouraging more granular disclosure. Several third-party data providers and pilots demonstrate feasibility today across at least ten jurisdictions, including the United States, several European countries, Singapore, Taiwan, Japan, and Chile. In regions without hourly issuance or data access, reporters can rely on profiled loads and monthly or annual certificates. This landscape aligns with a phased implementation approach for any scope 2 updates, allowing time for registries and markets to expand hourly functionality while organizations progressively adopt hourly certificates where available early. 

Load profiles enable organizations without access to hourly activity data or hourly contractual instruments to approximate hourly data from monthly or annual data. These load profiles are frequently used by grid planners to estimate how much electricity demand is expected during specific hours of the day and can similarly be used by reporting organizations. The proposed updates introduce a hierarchy of load profiles to guide reporters, including facility-specific load profiles, market-boundary load profiles scaled according to utility/customer-class profiles, time-of-use averages, and a flat average across all hours. The flat-average option is universally available and requires no specialized data. It spreads a site’s total use evenly across hours, and research indicates it can approximate interval-data results closely enough to support credible hourly matching and comparability during transition periods. The use of these profiles ensures that organizations that want to use contractual instruments for their market-based inventories or report their location-based inventories on an hourly basis, can do so whether they have access to hourly data or not.   

Exemption thresholds have also been proposed to exempt organizations under a threshold from hourly matching requirements. Current proposals under consideration include thresholds based on the volume of electricity consumption in a given grid region and/or on company size. Initial analysis on the application of load thresholds has shown that a majority of CDP reporting companies would be exempt from requirements to hourly match, while the vast majority of electricity load on the grid would still be subject to the hourly matching requirement.  

A legacy clause is being evaluated to ensure investments made under existing scope 2 accounting rules are not penalized. Proposed approaches, including eligibility and duration considerations, will be presented in the public consultation for stakeholder feedback.  

Phased implementation rules are being discussed to facilitate a smooth transition to new requirements. Following approval through the GHG Protocol governance process and publication of the revised Scope 2 Standard (anticipated late 2027), implementation is expected to phase in over multiple years. Staged effective dates would give organizations, data providers, utilities, and service platforms time to adapt and develop tools, with early adoption encouraged.  LBM and MBM requirements are scheduled to take effect on a coordinated schedule with AMI complementary metrics and with other updates across the corporate suite (Corporate Standard, Scope 2, Scope 3). This phased approach is intended to support a smooth transition while maintaining the credibility and comparability of inventories.   

6. Conclusion 

The proposed scope 2 revisions aim to update the market-based method so that it is fit for purpose for its users and the overarching objective of driving decarbonization, by aligning claims with how power is produced and delivered: matching certificates to the hours when electricity is used and to grid regions that can plausibly serve that load. Together, these guardrails intend to strengthen attributional MBM reporting by improving comparability and guiding procurement toward actions aligned with power-system decarbonization, while keeping results within value-chain boundaries and continuing to be reported alongside the location-based method. Feasibility is intended to be addressed through practical provisions such as load profiles, exemption thresholds, a legacy clause, and phased implementation. Emerging access to hourly certificate data and tools provides a starting point and could support a gradual transition.  

In parallel, the AMI TWG is advancing complementary methods for reporting impacts that sit outside inventories, with timelines coordinated so that new LBM/MBM requirements take effect alongside AMI outcomes. 

By tightening how market-based claims are made and clarifying where impact metrics belong, the revision seeks to deliver clearer inventories and more credible disclosures that support robust markets and ambitious climate action. The upcoming public consultation will invite feedback on the full package of proposed revisions, including hourly matching, deliverability, standard supply service, feasibility measures, and related location-based updates. The consultation will also solicit input on consequential methodologies to better inform the AMI TWG’s continued work on this important topic.  

Thoughtful input from practitioners, programs, and policymakers will help ensure the final Standard is robust and fit for purpose.  

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