The technical working group for the Greenhouse Gas (GHG) Protocol’s rules for calculating emissions from electricity, a.k.a. Scope 2, will reconvene in September to “reconcile” more than 1,100 comments submitted about the organization’s pending overhaul of the standard.
That work will continue alongside GHG Protocol’s project to unify its corporate carbon accounting rules with the ISO 14064-1 standard from the International Organization for Standardization. A consultation draft for the unified framework is due in Q2 2027.
The 122-page feedback summary of GHG Protocol’s much-anticipated Scope 2 overhaul, published July 29, shows very low support for the standards organization’s proposal to require companies to match their electricity consumption on an hourly basis, rather than annually, in order to claim emissions reductions.
The Scope 2 framework creates a dual reporting structure related to purchased electricity: Location-based inventories reflect the emissions intensity of the grids where a company actually operates, while market-based emissions totals include deductions related to an organization’s renewable energy contracts. The update in process is the first big revision since 2014.
Just 22 percent of all those commenting on GHG Protocol’s feedback draft strongly favored the hourly matching proposal, which is part of the market-based accounting rules. Support was even loower among the businesses that submitted comments about the proposed update, at just 12 percent. The sentiment was especially negative among companies from Eastern Asia and North America.
Nonprofit organizations and academic representatives were split on the proposal: Roughly the same percentage of respondents from these fields supported hourly matching as those who opposed it.
The top three reasons cited for opposition were:
- Concern that the requirement would discourage corporations from buying clean energy
- Worries about administrative, data management and audit challenges
- Sentiment that hourly matching should be optional
Compromise sought
This feedback, along with divided views on other parts of the Scope 2 update, convinced GHG Protocol that changes are warranted. That mirrors a decision by the Science Based Targets initiative to make hourly matching for electricity option under its new corporate net-zero standard, for now.
“The plurality of the respondents want a more rigorous standard,” said Tim Mohin, CEO of GHG Protocol, referring to the Scope 2 comments received by the organization. At the same time, “there’s a lot of differing opinions on where it should come out.”
The technical working group will meet to work out a compromise, which must be reviewed and approved by GHG Protocol’s independent standards board.
Mohin declined to discuss potential revisions or a timeline. One discussion that the group will definitely reconsider is the so-called “consequential” reporting approach for electricity, which would recognize corporate investments in energy storage or contracts for solar and wind electricity on fossil fuels-heavy grids (even if the company doesn’t have local operations).
That proposal was previously referred to the workstream for GHG Protocol’s emerging Actions and Market Instruments methodology, created to guide how businesses can report on emissions related to investments in supply chains or other areas, sometimes known as insets.
Energy strategists urged the technical working group to keep an open mind by allowing companies to report on an hourly basis if they choose, without making it a requirement. The strategists were encouraged by GHG Protocol’s renewed attention to consequential reporting, which they believe will motivate corporate investments in electricity grids that are still heavily fossil fuels-based.
“It’s as if there were two competing views here: one being between stricter, more environmentally impactful standards in the form of hourly matching and the other being less strict, less impactful,” said Gavin McCormick, co-founder and executive director at nonprofit WattTime, who was “encouraged” by the shift in dialogue. “I keep saying there’s a third option, which is cheap but more impactful options.”
Fewer unique businesses have signed power purchase agreements for solar and wind power this year, because high project demand stoked by data center companies is pushing prices higher and sustainability professionals want more clarity about the electricity accounting rules first, said John Powers, former vice president of global cleantech and renewables at Schneider Electric.
“Getting clear guidance and allowing solutions that are truly impactful, but also possibly feasible and affordable, is what we really need to do,” he said.
