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The GHG Protocol is undergoing its most significant update in a decade, and Scope 2 is one of the areas facing the largest transformation. As electricity grids decarbonise and companies purchase more renewable energy, the current Scope 2 rules have struggled to keep pace. The GHG Protocol’s draft update proposes new requirements that will reshape how organisations buy electricity, use renewable energy certificates, and calculate market-based emissions.
For any organisation reporting Scope 2 emissions, these changes matter. Below is a clear overview of what is being proposed and how it could affect your reporting.
What are Scope 2 emissions?
Scope 2 emissions are the indirect greenhouse gas emissions from the consumption of purchased electricity, steam, heat, or cooling. These emissions occur off site but are driven by an organisation’s energy use.
Why Scope 2 is being updated
The original Scope 2 Guidance was published in 2015. Since then, renewable energy markets have evolved rapidly. Power Purchase Agreements (PPAs), unbundled certificates, and new digital tracking systems have created more options for sourcing low carbon power, but the rules have not kept up with real world complexity. This has led to inconsistent reporting, confusion over what counts as “renewable” electricity, and claims that do not always reflect actual grid impacts. The revised guidance aims to improve transparency, comparability, and credibility across reported figures.
The biggest proposed changes
1. Hourly and regional matching for market based reporting
The most notable shift is the introduction of stricter matching rules. Under the proposed update, organisations must match renewable energy purchases to both the hour and the grid region where electricity is consumed. This means that buying annual certificates from a distant generator may no longer qualify for market-based reporting. Instead, organisations will need evidence that renewable supply occurred at the same time and within the same grid boundary as consumption.
2. Stronger quality criteria for certificates
Energy Attribute Certificates (EACs), including RECs and Guarantees of Origin, will face stricter quality requirements. These criteria include generation vintage, additionality, deliverability, and data precision. This signals a shift away from “any certificate counts”. Only certificates that meet higher quality thresholds will be eligible.
3. Updated rules for location based emission factors
The location based method remains in place, but the hierarchy for selecting emission factors will be clearer. Organisations will be expected to use more granular and accurate grid data where available, which should improve consistency across regions.
4. Separate guidance for consequential accounting
The GHG Protocol plans to introduce standalone guidance for consequential or system-wide impact modelling. This refers to estimating broader effects, such as avoided emissions. It does not replace Scope 2 reporting but provides a separate framework for companies that model wider climate impacts.
5. Phased implementation and transitional options
The draft update acknowledges that not all organisations can adopt hourly matching immediately. Smaller companies, or those without access to advanced metering, may be eligible for phased implementation or transitional approaches.
What the changes mean for organisations
Market based reporting becomes more rigorous
Many organisations currently rely on unbundled certificates to reduce their Scope 2 emissions. Under the new rules, a large share of these certificates may no longer be eligible, especially where they lack regional relevance or time matching.
Energy procurement strategies will need to evolve
To maintain credible market based reporting, organisations may need to transition toward:
- regional PPAs
- bundled certificates
- hourly matched renewable supply
- on site generation
- retailer products that offer traceable renewable electricity
This will influence procurement strategies, supplier engagement, and long term contracting.
Better data and systems become essential
Granular electricity consumption data, detailed certificate metadata, and accurate grid boundaries will all become more important. Organisations without strong data infrastructure may need to invest in new tools or work more closely with suppliers to meet the updated requirements.
Reporting becomes more comparable across sectors
Although the changes introduce additional complexity, they will improve the reliability and comparability of Scope 2 reporting. This should help stakeholders better understand differences in performance across companies and sectors.
What you should do now
1. Review your current market based instruments: Map your PPAs, certificates, and supplier products to understand what remains eligible under the proposed requirements.
2. Assess your data readiness: Check whether you have access to hourly consumption data and whether your suppliers can provide certificate information with sufficient detail.
3. Engage early with energy suppliers: Discuss whether your utilities or brokers can offer traceable, region-specific, or hourly matched renewable electricity products.
4. Prepare internal teams: Procurement, sustainability, and finance teams will all be affected. Aligning early will help reduce operational disruption later.
5. Consider responding to the consultation: The public consultations remain open until 19 December 2025. Organisations can provide feedback on feasibility, transitional periods, and practical challenges.
Final thoughts
The proposed updates mark a major shift in how Scope 2 emissions are reported. The dual method remains, but the expectations for credible market based reporting are rising. For organisations already committed to high quality climate disclosure, these changes offer an opportunity to strengthen reporting and better align emissions figures with actual energy use.
