GHG Protocol - Proposed Scope 2 Revisions

✓ 5 Truths Under the Proposed Scope 2 Revisions

1. Dual reporting is retained — but both methods are being significantly tightened.

The proposed revisions preserve the core dual reporting requirement for both the location-based and market-based methods. However, both methods face materially stricter criteria: the location-based method now requires a defined emission factor hierarchy prioritising spatial then temporal precision, while the market-based method introduces hourly matching and deliverability requirements. Retaining dual reporting while raising the bar on both signals that the GHG Protocol views the two methods as complementary, not interchangeable.

2. Hourly matching is proposed as a mandatory requirement for market-based reporting.

The October 2025 public consultation proposes that all contractual instruments — RECs, GOs, VPPAs — be issued and redeemed for the same hour as the electricity consumption they are applied to. This replaces the current annual matching approach for organisations. The intent is to eliminate the practice of claiming solar power ion a winter evening using certificates generated by midday summer solar, closing a well-documented loophole in the 2015 guidance.

3. Deliverability is a new and distinct requirement, separate from geographic matching.

Under the proposed revisions, contractual instruments must be sourced from generation that is 'deliverable' to the consuming organisation meaning the electricity could plausibly reach the site through a connective grid. This goes beyond the current geographic matching quality criterion: a certificate from a generator in the same country but on a non-interconnected grid would fail the deliverability test. The GHG Protocol intends to publish defined market boundaries where grid operations differ from national borders. In New Zealand this may see an argument around connectivity limits between North and South Islands.

4. A reporting entity may not claim more than its pro-rata share of Standard Supply Service (SSS).

This closes a gap in the 2015 guidance where no explicit cap existed on SSS claims, meaning companies could theoretically over-attribute shared green grid resources to themselves. The new rule ensures that communal grid benefits are allocated fairly and that organisations cannot inflate their clean energy claims by drawing disproportionately on publicly available renewable supply, without legitimate reporting rights.

5. Grid-average is no longer acceptable.

Under the 2015 guidance, when no residual mix factor was available, companies could fall back on grid-average emission factors. The proposed revision eliminates this option. Where residual mix factors are unavailable, companies must instead use a fossil-only grid-average or fossil emission factor (e.g., gas, oil, or coal). This is a significantly more conservative fallback, designed to disincentivise greenwashing through emissions understatement in markets where residual mix data is absent.

✗ 5 Myths About Scope 2 Reporting

1. "Buying any REC makes our Scope 2 zero."

This is the most pervasive myth. The GHG Protocol's quality criteria require that certificates be real, additional, exclusive, and verified. Unbundled RECs purchased cheaply in a different geography do not reflect actual grid decarbonisation.

2. "Location-based and market-based figures will eventually converge as grids get cleaner."

Not necessarily. As more companies purchase certificates to claim zero market-based emissions, the residual mix will get dirtier relative to the grid average. The two figures can not converge, in markets with heavy certificate activity

3. "A PPA automatically eliminates our Scope 2 emissions."

Only a bundled PPA that includes the energy attribute certificates and meets the quality criteria can support a zero market-based Scope 2 claim. Unbundled PPAs, or those with certificates issued separately will not qualify.

4. "Our Scope 2 is immaterial because we lease our offices and don't control the energy supply."

Under the operational control boundary, a company must report Scope 2 for all facilities over which it has operational control, regardless of whether it pays the energy bill directly. Even in leased premises (or for leased assets), if operational control exists, the emissions belong to the tenant.

5. "Hourly matching is just a best practice, annual matching is fine for reporting."

Annual matching is currently the minimum standard in the GHG Protocol, but leading frameworks (including the EU's new guarantees of origin reforms and initiatives like EnergyTag) are moving toward hourly certificate matching as the meaningful test of additionality. Annual matching allows a company to claim clean power in winter by purchasing certificates from summer solar, a mismatch that does not reflect physical reality, is increasingly scrutinised by regulators and investors alike.

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