GHG Protocol consults on changes to Scope 2 emissions reporting

On 20 October 2025, the Greenhouse Gas Protocol (GHG Protocol) launched a consultation to update its Scope 2 emissions reporting guidance. 

The consultation forms part of a broader effort to update the GHG Protocol's suite of corporate standards, following an initial public consultation held between November 2022 and March 2023.

The GHG Protocol's standards underpin mandatory and voluntary reporting regimes worldwide, such as the EU's Corporate Sustainability Reporting Directive (CSRD), the UK’s Streamlined Energy and Carbon Reporting (SECR) regime, California’s Climate Disclosure laws, the TCFD, and the ISSB’s IFRS S2. Consequently, any changes to the GHG Protocol will have far-reaching implications for how companies measure and report their GHG emissions.

Scope 2 emissions are indirect emissions derived from an organisations use of electricity, heat, or cooling. Under the GHG Protocol, organisations are able to account for their Scope 2 emissions using either a location-based or market-based accounting method. 

The location-based method estimates emissions according to the average emission factors of the electricity grid in a specific geographic area. In contrast, the market-based method considers the specific electricity purchased by a company, such as renewable energy acquired through contractual instruments (commonly known as renewable energy certificates or RECs), which can be purchased either bundled with the actual electricity or unbundled separately. 

In practice, the market-based accounting method has enabled many companies to reduce their Scope 2 emissions through the purchase of RECs.

Main changes being proposed

The consultation considers several changes relating to the location-based and market-based accounting methods, as well as their practical implementation. The most significant proposals relate to market boundaries and deliverability, and temporal correlation under the market-based accounting method, which aim to establish a credible grid link between companies and the energy they consume.

Under the current rules, companies can offset emissions from facilities in one location and time period with renewable energy purchased in a different location and time. For example, a data centre operating overnight in Germany and powered entirely by gas can utilise RECs from solar energy purchased during the day in Spain. However, such arrangements will be more challenging under the proposed changes.

Market boundaries and deliverability

The consultation proposes to update the Scope 2 Quality Criteria 5 to redefine the market boundary to reflect “deliverability”, meaning that electricity from the generator should plausibly be part of the energy mix serving the reporting organisation through an electrically connected grid.

Under the proposed revisions, all contractual instruments used should be sourced from the same market where the energy is consumed or otherwise meet deliverability criteria, such as: (i) price-based indications of available transmission capacity between adjacent grids; or (ii) contracts or instruments showing physical delivery from generation to load.

Temporal correlation

The consultation proposes to update the Scope 2 Quality Criteria 4 such that all RECs used under the market-based method are issued and redeemed for the same hour as the energy consumption, meaning that the energy must be produced and consumed at roughly the same time.

This temporal matching requirement could result in reduced availability of RECs during periods when renewable energy generation is limited (such as overnight hours).

Recognising the scope of these proposed changes, the GHG Protocol is also consulting on various feasibility measures, including phased implementation, exemption thresholds for hourly matching requirements, and legacy provisions to recognise investments made under the existing Scope 2 accounting rules.

Implications for businesses

The proposed changes will fundamentally increase the complexity and cost for large energy users seeking to achieve their climate targets through REC purchases.

Given that practices such as hourly matching remain in early development, companies with existing renewable energy purchase agreements may need to assess whether these contracts will satisfy the new requirements or whether legacy exemptions will apply.

There is also the question of how these changes would impact the feasibility and timeline of existing climate targets that were developed based on the current Scope 2 accounting rules.

The GHG Protocol has been subject to criticism in the past, and this is likely to increase with these proposed changes. Earlier in 2025, a coalition of organisations known as the Emissions First Partnership submitted a letter to the GHG Protocol cautioning against the use of temporal correlation, among other concerns.

Most recently, a coalition of organisations, Carbon Measures, has also been working to create a new carbon accounting framework that could potentially rival the GHG Protocol. Carbon Measures is understood to be a ledger-based system focused on capturing product-level emissions. An announcement regarding Carbon Measures is expected to be made at COP30 in Belém, Brazil.

Timeline and Next Steps

The consultation period runs from 20 October through 19 December 2025. The consultation materials and survey can be accessed here.

The GHG Protocol will conduct a further consultation on the Scope 2 standard in 2026, which will cover topics not addressed in this consultation, following which a revised standard will be published in 2027.