GHG Protocol consults on shift to hourly matching for Scope 2 reporting

A quick introduction to Scope 2 emissions

Scope 2 GHG emissions are those related to the electricity, steam, heat or cooling purchased and consumed by a reporting organisation, such as a company or public body. There are two methods of calculating these emissions:

1. A location-based methodology (LBM) determined by using average power generation emission factors on the local grid. For GB-based companies, the LBM is based on the GB power grid’s emissions.
2. The market-based methodology (MBM) calculates a company’s emissions based on the specific contracts and instruments it uses to purchase electricity from suppliers, reflecting the actual emissions from those sources. The MBM uses contractual instruments such as renewable energy certificates (RECs) or, in GB, Renewable Energy Guarantees of Origin (REGOs).

Proposed changes to Scope 2 emission reporting

The consultation proposes several impactful changes to Scope 2 emission reporting, with the aim of more accurately matching consumption of electricity to generation, both in time and location.

The biggest proposed change to the current MBM model for GB organisations is the move from annual to hourly matching and procuring electricity that is generated from the same grid boundary. Contractual instruments (e.g. REGOs) would need to reflect these changes.

The LBM methodology is also likely to change, with the recommendation of a new emission factor hierarchy that seeks to provide more guidance on location and time granularity.

The GHG Protocol’s view is that the proposed changes will improve accuracy and comparability of Scope 2 emissions.

MBM proposed changes

Under the proposed MBM changes, contractual instruments (e.g. REGOs) would need to be issued and redeemed for the same hour as the consumption occurs and from within the dame deliverable market boundary as the demand. The GHG Protocol is consulting on the appropriate market boundary, given power market structures differ by region. Consumers can still use contractual instruments where they demonstrate hourly and physical market boundary matching, otherwise they would need to demonstrate matching through other sources, such as corporate power purchase agreements.

To ensure that changes to the MBM are feasible to implement the consultation proposes the following feasibility options:

• Load profiles: enables organisations without access to hourly activity data or hourly contractual instruments to approximate hourly data from monthly or annual load profiles
• Exemption thresholds: could exempt organisations under a threshold from hourly matching. Proposed thresholds include the volume of electricity consumed and / or company size
• Legacy clause: under consideration to recognise existing investments made under existing scope 2 accounting rules

The consultation also proposes changes to the residual mix emissions factors, removing power generated from two types of asset. The first type includes those assets whose contractual instruments are claimed; the second includes any obligated or publicly funded generation (under what’s termed the Standard Supply Service). This second type should also account for imports and exports on the grid.

The consultation also proposes removing the use of grid average emissions factors for any volume that’s not contractually matched. This leaves businesses with the option of using residual mix emission factors, or using a fossil emission factor reflecting electricity generation within the market boundary. In GB, this would likely be combined cycle gas turbines (CCGTs).

LBM proposed changes

There are also several changes proposed to the LBM. The first updates the LBM factor hierarchy and requires reporting organisations to use the most precise locational information first, followed by the most precise time matching. For example, a local emission factor with annual temporal resolution would take precedence over a national emission factor with hourly temporal resolution. Regarding temporal resolution, organisations that want to use hourly emissions, but only have monthly or annual activity data, can use load profiles to represent their demand.

Additionally, the proposed hierarchy would prioritise consumption-based factors. These account for imported and exported power between regions, rather than only generating resources within a region that production-based factors would represent.

The consultation also proposes a new concept of “accessible” data. This should be publicly available, free to use, and from credible sources. If a more granular data set exists but is behind a paywall, it doesn’t need to be used.

Next steps

The consultation closes on 19 December 2025. The GHG Protocol plans to release the new standard in late 2027, with a potential phased implementation to support adoption. You can see the GHG Protocol’s webinar on the changes here.

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