The World Resource Institute’s Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard (the “GHG Protocol”) has been widely adopted as a framework for companies to report Scope 1, 2, and 3 emissions. By allowing companies to apply market-based procurement instruments (e.g. renewable energy certificates) toward their Scope 2 targets, the GHG Protocol has been a key driver in adding more than 100 gigawatts of clean electricity to the U.S. grid since 2014. The GHG Protocol’s guidance for Scope 2 emissions is now undergoing its first significant revision in over a decade.
The changes currently under consideration by a Technical Working Group aim to 1) promote accurate physical inventories of clean energy by requiring temporal and geographic matching of energy load and generation, and 2) provide accounting alternatives that accurately measure the impact of procurement decisions. If adopted, the updates are poised to profoundly reshape corporate renewable energy procurement strategies by introducing new operational challenges and constraints. Specifically, the changes would likely increase the complexity and cost of achieving “zero-emissions” Scope 2 targets. This will potentially lead to a temporary slowdown in corporate clean energy adoption as companies navigate the new requirements and invest in necessary data infrastructure and procurement models.
The proposed changes pose a critical trade-off: greater rigor in Scope 2 accounting is desirable for accuracy. However, imposing strict mandatory requirements without sufficient market readiness or technological solutions could inadvertently slow corporate renewable energy adoption, especially among smaller companies with fewer resources. Though there is no public comment period currently open, clean energy market participants are encouraged to engage with the Working Group now to ensure their feedback can have impact prior to the publication of draft rules later this year.
Proposed Changes to Scope 2 Reporting
Scope 2 emissions comprise the indirect GHG emissions arising from the generation of purchased or acquired electricity, steam, heat, or cooling. These emissions constitute a substantial portion of GHG output, with electricity and heat generation alone accounting for at least one-third of total global GHG emissions.
The existing GHG Protocol Scope 2 Guidance mandates that companies report their emissions using two methods: 1) the location-based method, which calculates emissions based on the average emissions intensity of the local electricity grid where consumption occurs, and 2) the market-based method, which reflects emissions from the electricity that organizations have chosen to purchase. Historically, the market-based method has permitted companies to claim the use of clean energy through contractual instruments (e.g., power purchase agreements, renewable energy certificates, etc.) that are matched annually to their consumption. This method has enabled relatively straightforward clean energy procurement from broad geographic areas.
However, the current market-based method, while successful in stimulating the voluntary clean energy market, faces scrutiny for a lack of accuracy and comparability. For instance, a company might purchase renewable energy credits from a distant solar project to match its annual electricity use, allowing it to report 100% renewable energy use, even if that electricity is not physically delivered to its facilities at the time of consumption. This temporal and spatial mismatch creates a gap between reported emissions and real-world climate impact, whereby companies can report zero emissions based on certificates that may not directly contribute to decarbonizing the electricity grid where their actual consumption occurs.
Driven by a need to align reported emissions more closely with actual grid dynamics and to reinforce trust in corporate climate claims, four Technical Working Groups were convened to revise the suite of GHG Protocol corporate reporting standards. The Scope 2 Working Group conducted a series of stakeholder surveys in 2022 and 2023. Following that public consultation, the Working Group put forward several proposed changes to the Scope 2 reporting market-based method: 1) additionality requirements for contractual instruments to ensure that the renewable energy project associated with the instrument would not have been built or operated without the company’s specific purchase; 2) mandating or recommending the matching of contractual instruments to electricity consumption on an hourly basis and within physically deliverable geographic boundaries; 3) prioritizing or requiring procurement from newer renewable energy resources; and 4) introducing additional quality criteria tiers for market-based instruments.[1]
To complement the stricter inventory rules, the Scope 2 Working Group is also advancing a new metric: Marginal Emissions Impact (MEI). The MEI metric reflects how much fossil fuel emissions a clean energy purchase displaces on the grid. For example, if a company purchases clean energy in a region with a more fossil-intensive grid, the MEI of that purchase could be significantly higher because it helps displace more carbon-intensive electricity. This impact metric accounts for broader climate benefits, even if a purchase does not directly qualify for Scope 2 inventory reduction under the new, more stringent inventory boundaries.
Impact on Corporate Procurement and Clean Energy Commitments
The use of all market-based instruments for clean energy procurement is likely to be impacted by the proposed changes, particularly due to practical implementation challenges and sourcing constraints. And, unless existing procurement contracts are grandfathered in, billions of dollars of clean energy investments could be disrupted.
Critically, the GHG Protocol is closely integrated with a variety of reporting frameworks, including regulatory reporting requirements in the EU and an increasing number of U.S. states.[2] Therefore, the changes to the Scope 2 Guidance will reshape how Scope 2 emissions progress is assessed by other reporting frameworks, including for compliance purposes.
Two trade groups, the Clean Energy Buyers Association (CEBA) and the American Council on Renewable Energy (ACORE), recently sent letters[3] to the chair of the GHG Protocol’s Standards Board. The groups argue that the revisions risk disincentivizing clean energy investments by creating implementation challenges and procurement difficulties, thereby reversing progress toward decarbonization.
The anticipated difficulties from a shift towards hourly and regional matching stem from increased technical complexity of data collection and analysis, as well as heightened procurement costs. For example, to meet the more stringent criteria, renewable energy certificates would need to be matched from energy generated in the same hour as the buyer’s consumption and from locations within the same grid system. Meanwhile, power purchase agreements would need to incorporate more precise temporal and spatial matching clauses. These changes will be especially impactful for companies with distributed loads across various regions, as they may need to sign more smaller agreements or procure a diverse portfolio of technologies to ensure hourly and jurisdictional matching.
A survey of clean energy practitioners and market participants found that nearly 80% of respondents lack confidence in their ability to procure time-matched clean electricity within smaller market boundaries. 70% of respondents also stated that their current procurement contracts would no longer be eligible. These results suggest that the shift to hourly and regional matching would fundamentally disrupt existing corporate procurement strategies, particularly those heavily reliant on unbundled renewable energy certificates or annual matching.
The Scope 2 Working Group is actively exploring ways to address the concerns raised by stakeholders. Proposed flexibilities include: 1) ensuring that existing renewable energy contracts are grandfathered in; 2) allowing the use of estimated data or “profiles” to represent electricity usage or generation when actual hourly metered data is unavailable; and 3) exempting smaller, lower-capacity electricity users from the most granular requirements.
Looking Ahead – Stakeholder Engagement
A formal public consultation period for the draft Scope 2 Guidance is expected to open in late 2025. Subsequent revisions based on this feedback are slated for circulation in 2026. The final publication of the updated Scope 2 Guidance is anticipated toward the end of 2027, with implementation expected to phase in over a period thereafter.
Despite this extended timeline and lack of a current open public comment period, many market participants are actively engaging with the Working Group. The Working Group is currently considering ten alternative proposals, addressing topics including how to define the “physically deliverable” geographic market boundaries and how to avoid double counting of clean energy from existing sources. This ongoing engagement from stakeholders is driven by a concern that once the draft rules are published later this year, it will be too late to promote any significant changes.
Meanwhile, the California Air Resources Board (CARB) is currently developing rules to implement California’s new emissions disclosure law (SB 253), which mandates Scope 1, 2, and 3 reporting in conformance with the GHG Protocol. CARB has noted that it seeks to align as closely as possible with the GHG Protocol and has sought input on this issue. Further changes are anticipated to California’s climate statutes aimed at more closely aligning with the International Sustainability Standards Board S2 standard. CARB has recently kicked off a series of workshops to solicit stakeholder feedback on the implementation of SB 253.
[1] In contrast with the proposals put forward by the Scope 2 Working Group, a group of large clean energy buyers, including Amazon, Meta, General Motors, and Salesforce, published a set of principles they hoped to see reflected in the GHG Protocol Scope 2 amendments. Specifically, the group promoted a shift away from calculations that emphasize time and location matching and instead prioritize corporate action that decarbonizes the grid, including energy efficiency projects or the addition of clean power in regions where it isn’t plentiful. See Emissions First Partnership.
[2] The Protocol is incorporated into the European Sustainability Reporting Standards (ESRS), the International Sustainability Standards Board’s (ISSB) IFRS S2 standard, and California’s new emissions disclosure laws (SB 253). It is also a foundational part of the Science-Based Targets initiative (SBTi) and it forms the basis for the Global Reporting Initiative GHG reporting standards.
[3] ACORE’s letter, which was not made public, was reported on by some news outlets. See Heather Clancy, Renewable energy buyers should brush up on Scope 2 revisions, Trellis (May 23, 2025) (quoting ACORE’s letter, “At a time when clean energy companies face significant global and domestic headwinds, an overly restrictive approach for GHG reporting requirements that shrinks the number of voluntary purchasers could be a breaking point for many companies in the clean energy market.”).
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