Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Greenhouse Gas Protocol
Detailed Summary of Responses from Scope 2 Guidance
Stakeholder Survey
Executive summary
Background on Scope 2 Guidance: The Greenhouse Gas (GHG) Protocol Scope 2 Guidance(Scope 2 Guidance), published in 2015, requires dual reporting of indirect emissions frompurchased electricity, steam, heat, and cooling using two distinct methods: location-based andmarket-based reporting. The location-based method assigns emissions based on the average
emission intensity of the grid(s) in which an organization operates, while the market-based
method allocates emissions based on the specific electricity purchase decisions an organization
makes. These methods were designed to meet the objectives of the GHG Protocol Corporate
Standard and Scope 2 Guidance, which are to help companies accurately report their value
chain GHG emissions by using standardized approaches, reduce the costs associated withcompiling a GHG inventory, provide information for effective emission management strategies,
facilitate participation in GHG programs, promote consistency and transparency in accounting,understand risks and opportunities related to electricity consumption, identify internal reduction
opportunities and track performance, engage energy suppliers and partners in GHG
management, and enhance stakeholder information and corporate reputation throughtransparent reporting.
Updating Scope 2 Guidance: Since its publication, the Scope 2 Guidance has been used bythousands of organizations and there have been many important developments in GHG
accounting. These include new regulations which mandate climate-related disclosures, a steep
increase in the adoption of net-zero targets, and research on the use and impact of theguidance and standards. To ensure the GHG Protocol continues to effectively support andenable these developments, the GHG Protocol began a formalized process in 2022 to update
the Scope 2 Guidance. This process, the next steps of which are outlined below, is guided by
the principle of providing robust GHG accounting standards and guidance for organizations tomeasure progress towards science-based, net-zero targets aligned with the global 1.5°C goal.
In addition, a key goal of the update is to harmonize and align with accounting rules developedby major regulatory and voluntary disclosure and target-setting programs and initiatives.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Scope 2 Guidance Survey background: Following discussions with over 1,000 stakeholders
about the effectiveness and appropriateness of the current Scope 2 Guidance as well as
proposed alternative accounting methods, the GHG Protocol secretariat solicited written
feedback through an online survey between November 2022 and March 2023. This survey was
one of four conducted to gather feedback on various options for updating or maintaining thecurrent suite of GHG Protocol corporate standards and guidance. The “Scope 2 Survey” received
over 400 responses in addition to roughly 70 detailed proposals from stakeholders explaining
whether they wanted the standard changed and why. Survey respondents included businesses,
academia, non-profits, industry groups, the power sector, and government institutions, among
others.
Scope 2 Survey summary: This draft Scope 2 Survey Summary Report provides an overview
of responses from all survey respondents and highlights common themes. This summary will be
used to inform further stakeholder discussions around key revisions to the Scope 2 Guidance
and related GHG Protocol standards. Responses ranged from suggestions of minor edits and/or
additional guidance to major revisions. Some feedback also included critiques of potential new
scope 2 accounting requirements or alternative methodologies popularized in concept after the
publication of the original Scope 2 Guidance. The following summarizes major points offeedback from the survey.
Modifying the structure of and process to update GHG Protocol standards: The
Scope 2 Guidance is one of several GHG Protocol publications detailing howorganizations account for and report their value chain GHG emissions. Other documents
include the Corporate Accounting and Reporting Standard (2004), Corporate Value Chain(Scope 3) Standard (2011), and Scope 3 Calculation Guidance (2013). A large volume of
feedback suggested that the GHG Protocol should consolidate its requirements across allthese documents, i.e., scope 1, scope 2, and scope 3 into a single document tostreamline accounting and reporting. A regular process of updating the standards tokeep up with a rapidly evolving GHG management and climate action ecosystem wasalso suggested.

Creating alignment with voluntary and regulatory climate disclosure
programs: Respondents strongly urged the GHG Protocol to coordinate closely withvoluntary target- and goal-setting programs such as the Science Based Targets initiative(SBTi) and regulatory developments which mandate climate-related disclosures,
including the EU Corporate Sustainability Reporting Directive (CSRD), the US SEC’s
proposed rule on climate-related disclosures, and the International Sustainability
Standards Board (ISSB) standards developed by the International Financial ReportingStandards (IFRS).



Reviewing the objectives of scope 2 reporting: Many respondents provided
feedback on the appropriateness of the current objectives, if the objectives have beenachieved in practice, and whether or how they should be amended going forward toalign with the GHG Protocol’s evolving purpose and role facilitating voluntary targetsetting programs as well as emerging climate disclosure mandates.
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Updating dual reporting requirements: There was significant feedback representing
multiple perspectives on the usefulness, appropriateness, implementation, and overall
results of the dual reporting requirement. Some respondents recommended maintaining
dual reporting with various modifications to the location-based and/or market-based
methods, while other respondents suggested that only one of the two methods should
be required. Support for the location-based approach emphasized that it appropriately
represents emissions throughout the reporting entity's value chain. Support for themarket-based approach emphasized that it is necessary to account for purchased energy
attribute claims, which may differ from the actual energy flow in the grid. Many
respondents proposed improvements to the location- and/or market-based methods.
Some favored more specific requirements. Others preferred maintaining flexibility while
supporting interpretation or adaptation by other emissions reporting and/or targetsetting programs.



Requiring or encouraging granular time and location criteria: Respondents
wanting more specific requirements frequently referred to studies that demonstrate theimportance of using detailed data to ensure any emission reductions claimed in a GHG
inventory are closely correlated with actual atmospheric GHG emission reductions. For
example, some emphasized the need to consider the specific emission intensity of theelectric grid on an hourly basis when determining scope 2 emissions. These responses
also advocated that clean energy purchases should only be accounted for when the
carbon-free resource is on the same grid as the facility(ies) claiming to use power
therefrom. These measures were seen as essential for accurately tracking the progressof emission reductions. However, some respondents expressed concerns about thedifficulties and practicality of implementing these specific requirements. For example,
some said that it might make it more difficult for organizations to participate in clean
energy purchasing programs due to the challenge of collecting hourly electricity
consumption data, limited procurement options to buy clean energy tracked on anhourly basis, and uncertainty identifying whether a clean energy resource could actuallyprovide electricity to facilities that claim to be consuming the energy.

Allowing flexibility in time and location criteria: Those in favor of flexible
interpretations stressed the need for accounting standards and clean energy
procurement opportunities that are feasible to implement for organizations of all sizes,
sophistication levels, and global regions. They generally supported maintaining thecurrent flexibility in the Scope 2 Guidance, which allows the use of emission factors
averaged over a year instead of shorter intervals. Additionally, they advocated for thecontinued ability to purchase energy attribute certificates (EACs), like guarantees oforigin (GOs) or renewable energy certificates (RECs), from larger regions with common
EAC trading markets, rather than being limited to grid boundaries that require somedegree of physical electricity delivery. However, many comments also pointed out thatthe flexibility inherent to the current approach often leads to less-than-ideal outcomes.
They expressed concern that under the current framework, flexibility allows purchasesof claims that are physically disconnected from underlying electricity consumption, and3

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
the reported reductions in an organization's emissions inventory may not actuallycorrespond to overall reductions in the atmosphere.
Calling for new emission impact-based reporting approach: Some comments
proposed a change from, or addition to, current inventory accounting methods to a new
approach for demonstrating the emission reduction effects of buying clean energy. Thisapproach, similar to project-based accounting, involves accounting for the emission
reductions resulting from replacing carbon-intensive power plants with cleaner energy
sources. It also considers load management strategies that optimize increased energy
consumption at times when clean energy is abundant and reduced energy consumption
at times when the grid relies on more carbon-intensive resources. Most of thesecomments suggested calculating this information using marginal emission factors insteadof average grid emission factors because marginal rates reflect how emissions
incrementally change in response to new clean energy resources or changes in demandfor energy. Respondents posited that this method would provide stronger incentives forinvesting in grids that have the greatest potential for reducing carbon emissions
compared to current market- and location-based inventory accounting methods.
However, concerns were raised about the compatibility of this method with existing
inventory methodologies and science-based, net-zero targets, as well as practicalimplementation, including issues with data accessibility and technical limitations.



Requiring additionality criteria: The topic of additionality, wherein an action must
result in emissions reductions beyond what would have occurred in the absence of that
action, was discussed in the context of both market-based accounting as well as under
any new impact-based methodology. Support for introducing an additionality
requirement emphasized its necessity to ensure inventory emission reduction claims
more clearly align with atmospheric emission reductions. Feedback in support ofmaintaining the current practice emphasized that the concept of additionality isinappropriate to apply to the market-based method because the market-based method
allocates energy usage rather than offsetting emissions. Responses also highlighted
distinctions between electricity “usage claims” from “impact claims,” suggesting
additionality only be applied in impact-based claims.



Adding clarifications and new guidance: Respondents also provided various
suggestions for adding clarifications and new guidance, including specific use cases, newtechnologies, and data. Examples included: encouraging the GHG Protocol’s involvement
in developing global emission factor databases; updated guidance for purchased steam,heat, and cooling; clarification on transmission and distribution (T&D) losses; clarifying
overlaps between accounting for emissions in scope 2 or scope 3 category 3; andcreating guidance for specific use cases like electric vehicle charging, and leased assets,
and other activities.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Next steps:
Note: Between July 26th and September 8th, 2023, GHG Protocol offered an opportunity forstakeholders who submitted responses to the Scope 2 Guidance Survey to provide feedback on
the draft Scope 2 Survey Summary Report to ensure that perspectives were comprehensively
and accurately represented. The log of changes made from the originally published draft
summary report is included at the end of this document.
This summary report will support the development of specific workplans for scope 2 updates
and related GHG Protocol standards, to be developed through technical working groups andother committees as part of the standards development process. In addition, the GHG Protocol
secretariat will continue to solicit new information and review relevant new research studies on
scope 2 as they become available throughout the update process.
The GHG Protocol secretariat is also currently meeting with organizations that submitted ascope 2 proposal for detailed discussion of their proposals. The GHG Protocol has tentatively
identified several common themes within the scope 2-related proposals submitted, which reflect
similar themes that emerged from the Scope 2 Survey responses presented in this summary.
The next phase of stakeholder engagement will include a summary of these proposals. The
goals of this work are to support widespread understanding of the proposals and GHG Protocol
accounting and reporting principles. The results of these sessions and this summary of survey
responses will help inform the initial topics and deliberations for the scope 2 technical working
group.
In tandem with this process, the GHG Protocol is finalizing a new governance structure. The
GHG Protocol’s updated governance will provide overall strategic direction and oversight of thestandards update process. Information about the standards update process and opportunities toparticipate will be shared with subscribers to the GHG Protocol newsletter via email. If you’d liketo receive email updates, please subscribe to the GHG Protocol newsletter here.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Contents
Execu ve summary ....................................................................................................................................... 1
Background ................................................................................................................................................... 8A.

General feedback .................................................................................................................................. 8
A.1. Consolidate GHG Protocol standards and improve user experience................................................. 8
A.2. Adopt a more frequent update process ............................................................................................ 9A.3. Increase coverage of emerging markets ............................................................................................ 9A.4. Reﬁne the objec ves of the GHG Protocol Scope 2 Guidance .......................................................... 9A.5. Align with target and goal-se ng programs, such as SBTi and RE100 ............................................ 11

B. Feedback on current scope 2 dual repor ng requirement and the loca on- and- market-based
methods ...................................................................................................................................................... 12
B.1. Current requirement on dual repor ng ........................................................................................... 12
B.2. Overview of survey feedback on dual repor ng requirement ........................................................ 16
B.3. Feedback in favor of maintaining the dual repor ng requirement ................................................. 16
B.4. Feedback in favor of elimina ng dual repor ng and requiring organiza ons to report only a single
method .................................................................................................................................................... 16
B.5. Repor ng the loca on-based method emission total in scope 2 .................................................... 17
B.6. Repor ng the market-based method emission total in scope 2 ...................................................... 21
C.

Responses on ac vity data, emission factors, and quality criteria requirements............................... 25
C.1. Current data and quality criteria requirements for the loca on-based and market-based methods................................................................................................................................................................ 25
C.2. Feedback on speciﬁcity vs. ﬂexibility of scope 2 ac vity data, emission factors, and quality criteria
requirements........................................................................................................................................... 26
C.3. Feedback on granularity vs. broadness of scope 2 ac vity data, emission factors, and quality
criteria requirements .............................................................................................................................. 28
C.4. Granular, speciﬁc requirements or encouragement ........................................................................ 29
C.5. Broad, ﬂexible requirements ........................................................................................................... 32
C.6. Other feedback on speciﬁc requirements........................................................................................ 33

D.

Feedback on proof of addi onality ..................................................................................................... 37
D.1. Current requirements on addi onality ............................................................................................ 37
D.2. Stakeholder responses on addi onality .......................................................................................... 38

E.

Feedback on introducing a new emissions impact repor ng requirement ........................................ 40
E.1. Current requirements on avoided emissions ................................................................................... 40
E.2. Stakeholder responses on emissions impact repor ng ................................................................... 41
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
F.

Feedback on addi onal guidance, new technologies and use cases .................................................. 45
F.1. Accoun ng for purchased steam, heat, and cooling ........................................................................ 45
F.2. Emission factors used in scope 2 from waste-to-energy .................................................................. 46
F.3. Repor ng transmission and distribu on (T&D) losses ..................................................................... 47
F.4. Residual mix data .............................................................................................................................. 48
F.5. Other topics raised by respondents ................................................................................................. 48

G.

Feedback on alignment with policy and regulatory GHG disclosure programs .................................. 50
G.1. Mandatory corporate GHG disclosure ............................................................................................. 50
G.2. Market-based accoun ng: Overlap of voluntary EAC claims and compliance schemes ................. 51
G.3. Learnings from low-carbon hydrogen regula ons........................................................................... 52

H.

Feedback on clariﬁca ons needed across scopes ............................................................................... 53
H.1. Repor ng indirect emissions in scope 2 and scope 3 category 3 .................................................... 53
H.2. Leased assets ................................................................................................................................... 54
H.3. Addressing electricity use in value chain through a market-based method ................................... 55

I.

Feedback on addi onal repor ng metrics .......................................................................................... 56

Log of Changes to Dra Summary Report – October 2023......................................................................... 57

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Background
Since the publication of Greenhouse Gas (GHG) Protocol’s Corporate Accounting and ReportingStandard (2004), Corporate Value Chain (Scope 3) Standard (2011), Scope 3 Calculation
Guidance (2013), and Scope 2 Guidance (2015), there have been many importantdevelopments in GHG accounting and reporting and GHG emission management. Among these
are the introduction of the Science Based Targets initiative (SBTi), the trend toward net-zerotargets, new regulations which mandate climate-related disclosures, use of the standards bythousands of companies, and academic research on their use and impact.
Between November 2022 and March 2023, GHG Protocol collected stakeholder input via four
online surveys and proposal submissions with suggestions for updating existing standards/
guidance or developing new sector-specific guidance. This feedback covered the GHG Protocol’s
Corporate Standard, Scope 2 Guidance, Scope 3 Standard, and supporting documents, and will
inform the scope of the updates that GHG Protocol makes to its standards and guidance.
The aim of any updates will be to align with best practice approaches to ensure GHG Protocol
standards for scope 1, scope 2 and scope 3 are effective in providing a rigorous and credible
accounting foundation for businesses to measure, plan and track progress toward sciencebased and net-zero targets in line with the global 1.5°C goal. Any future updates will seek
harmonization and alignment with accounting rules under development through major
disclosure initiatives.
This report summarizes stakeholder feedback from the Scope 2 Survey. The GHG Protocol
secretariat received 403 responses to the survey on Scope 2 Guidance. Responses detailed byorganization type are shown in Figure 1 below. In addition, stakeholders submitted roughly 70
proposals related to scope 2. Proposals that attested public attribution can be found here.
Figure 1. Scope 2 survey response profiles
250

Company
Consultant supporting with GHG reporting
Industry group
Non-profit organization/NGO/civil society
Other
Provider of data/product related to GHG reporting
Academia/research
Government institution
GHG reporting program or initiative
Electric grid operator
International agency

200

194

150
100
50

65
40

37

24

19

12

9

4

3

2

0

A. General feedback
A.1. Consolidate GHG Protocol standards and improve user experience
Survey respondents suggested that the revised Scope 2 Guidance be more concise. Many
expressed difficulties in determining which GHG Protocol reporting requirements are applicableto their organization and understanding how the various GHG Protocol standards and guidance
documents interact with each other. Survey results indicated users’ interest in consolidating the8

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Scope 2 Guidance reporting requirements with other GHG Protocol requirements in the
Corporate Standard, Scope 3 Standard, and forthcoming Land Sector and Removals Guidance
into one single overarching GHG Protocol standards document and moving all guidance andcalculation examples related to scope 1, scope 2, scope 3, and land sector and removals into
separate documents. It was also suggested that adding numerical references to the paragraphsof all the standards, as well as associating guidance and examples to their respective applicableparagraphs, could help improve the user experience in navigating the various GHG Protocol
standards documents.

A.2. Adopt a more frequent update process
To ensure the GHG Protocol remains current with the latest climate science, relevant research,and market developments, stakeholders urged the GHG Protocol to implement a regularcadence for updating its standards more frequently, and on an ongoing basis.
Stakeholders suggested that this could both help the GHG Protocol adequately prepare forpotential updates, as well as help organizations better anticipate changes and mitigate risks thatcome with less frequent but potentially more significant updates to the standards.
Some respondents suggested developing a formal forum for users of the GHG Protocol to reportinconsistencies in the interpretation and application of the standards, which could becontinuously addressed by the GHG Protocol secretariat to help prepare topics for regularlyscheduled updates.

A.3. Increase coverage of emerging markets
Stakeholder feedback included a request to better represent markets from around the world,
including the GHG Protocol documenting where the market-based accounting method isrequired for different regions of the world, plus incorporating additional examples of locationbased and market-based calculations in geographies outside the United States (US) and Europe(EU).
Some respondents suggested that the current Scope 2 Guidance leaves out pathways forrenewable energy development and climate mitigation in less developed countries whererenewable energy development would have outsized socio-economic impact. Some respondents
specifically highlighted Africa, South America, and Southeast Asia as regions that would benefit
from particular attention. These comments suggested that scope 2 requirements be updated tobetter align with market-based opportunities in these regions.

A.4. Refine the objectives of the GHG Protocol Scope 2 Guidance
A commonly raised topic in stakeholder feedback was identification of what the objectives andpurposes are in scope 2 emissions inventory reporting, including the original intent, how it has
been used in practice, and what should be considered in the context of updates and revisions.

Current objectives stated in the Corporate Standard and Scope 2 Guidance
The introduction of the GHG Protocol Corporate Standard provides a list of accounting andreporting objectives which the standard was designed to support and enable:
9Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023






To help companies prepare a GHG inventory that represents a true and fair account of
their emissions through the use of standardized approaches and principles
To simplify and reduce the costs of compiling a GHG inventory
To provide business with information that can be used to build an effective strategy tomanage and reduce GHG emissions
To provide information that facilitates participation in voluntary and mandatory GHG
programs
To increase consistency and transparency in GHG accounting and reporting among
various companies and GHG programs.

In the current GHG Protocol Scope 2 Guidance, section 2.1 provides a further overview of thebusiness goals of scope 2 accounting and reporting. Consistent with the Corporate Standard
and Scope 3 Standard, it states companies consuming electricity may seek to:

Identify and understand the risks and opportunities associated with emissions frompurchased and consumed electricity
Identify internal GHG reduction opportunities, set reduction targets, and track
performance
Engage energy suppliers and partners in GHG management
Enhance stakeholder information and corporate reputation through transparent public
reporting.

Each of these is elaborated further in Chapter 2 of the Scope 2 Guidance.

Feedback on objectives of the GHG Protocol Scope 2 GuidanceWithin the Scope 2 Survey, stakeholders responded with a range of perspectives on what theobjectives of scope 2 and GHG accounting at large should be. Cited responses included (notexhaustive):











Must be an accurate reflection of emissions from the reporting entity’s value chain
Reflect the physical consumption of energy and emissions associated with theoperation to generate that energy
Focus not on “purchased electricity” but on “consumed” electricity that has been
supplied from a shared distribution grid
Incentivize decarbonization through accurate accounting and reporting
Prioritize and promote actions and strategies for high quality emission reductions
and removals
Ensure that the usage of market-based instruments within a scope 2 emissions
inventory accurately reflects emissions across the electricity system
Enable comparability between reporting organizations
Be based on verifiable facts and distinguished from impact or causation claims whichreflect estimates based on assumptions about what would have happened absent
the intervention
Avoid overly burdensome or complex requirements which may limit market
participation from companies that don’t have well-resourced sustainability teams
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Many respondents emphasized a need to ensure any updates to scope 2 accounting designprinciples and objectives adopted via the revisions process must be based on science, agnostic
to politics, and more clearly demonstrate specific and testable outcomes.
Responses included calls for any revised market-based scope 2 accounting and reporting
requirements to be supported by research and analysis that backs up the GHG Protocol’s theoryof change on the relationship between market-based instruments in scope 2 and emission
reductions. Such analysis should clearly explain with evidence how voluntary energy attributecertificate (EAC) markets affect individual and collective project development, both directly andindirectly, as well as the relationship between an organization’s GHG emission inventory andglobal atmospheric GHG emissions.
Other survey respondents stated that the current market-based Scope 2 Guidance is sufficient
as it represents the minimum features necessary for EAC instruments to enable implementationof a market-based method for scope 2 accounting. These comments emphasized that the scope
2 market-based method is simply intended to allocate indirect emissions associated withspecified electricity procurement to consumers, whereas additional requirements related toquantifiable emission reductions (e.g., does the use of EACs in a scope 2 inventory result in any
GHG emission reductions to the atmosphere) may be more well suited for target- and goalsetting programs and/or quantified with project- and intervention-based evaluations outside ofa GHG emissions inventory.
Some survey respondents argued that the objective of scope 2 is to accurately represent theemissions associated with the physical consumption of purchased electricity, heat, and cooling,and stated that this can only be meaningfully achieved by the location-based method. These
respondents purported that incentives and performance-related objectives offered by thecurrent market-based method functionally serve a different purpose from accurate emissions
accounting and should be reported separate from the inventory. Here, too, some also thoughtthat the benefits of clean energy investments could be evaluated using project- andintervention-based methods outside the emission inventory as an alternative to the current
market-based method. Collectively, this information could then be used to inform on progress
through target- and goal-setting programs.
Section B of this report summarizes feedback on maintaining or eliminating the dual reporting
requirement and the stakeholder perspectives on the merits of the current location- andmarket-based methods. Survey response feedback on specific revisions and modifications
proposed for the two methods are presented in section C. Considerations related to additionality
and causality are presented in section D. Feedback concerning the introduction of a new
impact-based reporting metric is presented in section E.

A.5. Align with target and goal-setting programs, such as SBTi and RE100
Respondents indicated that the GHG Protocol should collaborate with voluntary target and goalsetting initiatives such as the Science Based Targets Initiative (SBTi), RE100, and similar
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
voluntary programs which rely on the Scope 2 Guidance within their respective technicalcriteria. Some suggested that significant changes to the Scope 2 Guidance could have
implications for these initiatives and for the companies who have set targets in accordance withthese initiatives. Respondents signaled a need for compatibility across GHG accounting
standards and target-setting initiatives to maintain the integrity of their public climate-related
commitments.

B. Feedback on current scope 2 dual reporting
requirement and the location- and- market-based
methods
B.1. Current requirement on dual reporting
The current Scope 2 Guidance section 7.1 states that, for organizations with operations only inmarkets that do not provide supplier-specific data or other contractual instruments, only one
scope 2 result shall be reported using the location-based method. For organizations in markets
providing product or supplier specific data in the form of contractual instruments, organizations
shall account and report scope 2 emissions in two ways and label each result according to themethod: one based on the location-based method, and one based on the market-based
method. This is also termed “dual reporting.”

Location-based reflects the average emissions intensity of grids on which energy
consumption occurs and uses grid-average emission factor data (Scope 2 Guidance,
section 1.5, page 8).

Market-based reflects emissions from electricity that organizations have purposefully
chosen (or their lack of choice) using emission factors from contractual instruments(Scope 2 Guidance, section 1.5, page 8).

The location-based and market-based methods generally use different methodologies to show
different results and are not comparable across organizations (e.g., one organization’s locationbased is not comparable to another organization’s market-based scope 2). Each method’s
definitions and purposes are detailed in Table 4.1 from the Scope 2 Guidance, copied below.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Table 4.1 Comparing market-based and loca on-based methods (Scope 2 Guidance, page 26)(Source: Scope 2 Guidance, Table 4.1, page 26)

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Scope 2 Guidance on dual reporting
Dual reporting allows organizations to compare their individual purchasing decisions to theoverall GHG-intensity of the grids on which their facilities operate. The current Scope 2
Guidance section 7.4 on dual reporting outlines several benefits from reporting location- andmarket-based scope 2 emissions using the two different methods:
Distinguishing changes in choices vs. changes in grid emissions intensity
Providing for a more complete assessment of the GHG impacts, risks, and opportunities
associated with energy purchasing and consumptionProviding transparency for stakeholders

Improving comparability across operations (on location-based method) where theorganization’s GHG inventory includes operations in markets without contractual
instruments
Facilitating participation in programs with different reporting requirements

Scope 2 Guidance on doubling counting considerations within dual reporting
Section 5.5 in the Scope 2 Guidance states that the dual reporting requirement can complicate
an understanding of whether double counting is occurring and whether it threatens theinventory’s accuracy. Table 5.2 from the Scope 2 Guidance details scenarios of double counting,along with whether they introduce accuracy errors and how they are, or can be, addressed.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Table 5.2 Scope 2 accoun ng introduced by the Scope 2 Guidance (Scope 2 Guidance, page 40)

Source: Scope 2 Guidance, Table 5.2, page 40
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

B.2. Overview of survey feedback on dual reporting requirement
Survey responses on the dual reporting requirement and the two underlying methods varied
widely, with interest on this topic generally fitting within the following options:
1.
2.
3.
4.

Maintain the dual reporting requirement,
Require only one method (i.e., either location-based or market-based),
Adopt revisions to the location-based and/or market-based methods, and/or
Introduce a new impact-based reporting metric, either in addition to or in place of thecurrent dual reporting requirement.

While most of the feedback focused on the electric power sector, survey respondents also called
for clarification whether dual reporting is also required for other sources of scope 2 emissions,such as heating, cooling, and steam.

B.3. Feedback in favor of maintaining the dual reporting requirement
Responses supporting the current dual reporting requirement generally aligned with the statedbenefits included in the current Scope 2 Guidance listed above from section B.1. under ‘Scope 2
Guidance on dual reporting.’
Some respondents suggested that in addition to maintaining dual reporting, the GHG Protocol
should more clearly articulate the distinction between the two methods, better highlighting thedifferent functions and purposes of market-based and location-based reporting. For example,
some respondents suggested that market-based reporting is needed in the near-term toincentivize investment action in the absence of policy, but that it should be phased out over the
long-term to align definitions of net-zero with location-based outcomes. Respondents statedthat clarification is needed on what types of claims can be made using the location-based andmarket-based methods and how each approach should interact with climate action targets, netzero goals, etc.
Among responses supporting dual reporting, it was noted that scope 2 requirements should
more clearly indicate in what markets or jurisdictions globally it is possible to report marketbased emissions. As an example, several respondents suggested the presence of an adequate
EAC registry in a given country and/or market indicates the feasibility of reporting market-based
emissions therein.

B.4. Feedback in favor of eliminating dual reporting and requiringorganizations to report only a single method
Three primary challenges with the current Scope 2 Guidance dual reporting requirements wereidentified among stakeholder feedback for consideration: it is confusing and complex,
implementation of the requirement is often inconsistent, and there is confusion on double
counting when one method is compared to the other method. Feedback regarding requiring
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
exclusively either market-based or location-based as the sole reporting requirement issummarized in sections B.5 and B.6.
Cited responses included (not exhaustive):Dual reporting is confusing and complex
o Separately managing and communicating two representations of anorganization’s scope 2 emissions is challenging for both internal and external
stakeholders, including investors.
o Reporting scope 2 emissions needs to be simple enough to be accessible by allorganizations, including those with limited resources so that broad adoption ofscope 2 emission accounting and reporting is possible.
Many organizations do not adhere to the dual reporting requirement andchoose to report the more favorable number
o Numerous survey respondents pointed to non-compliance with the dual reporting
requirement as a significant concern.
o While the GHG Protocol requires dual reporting, this requirement is not regularly
carried through to GHG reduction planning because target-setting and tracking
tend to focus on one of the two options (e.g., if the market-based method isused for reporting and measurement toward organization’s sustainability targets,the location-based method often becomes less important).
Dual reporting results in perceived double countingo Given the aforementioned partial adherence to the dual reporting requirement,
requiring both location-based and market-based reporting in regions withattribute tracking systems may lead to misconception of the occurrence of
double counting.
o As an example, an organization in southern Europe could report zero scope 2
market-based emissions by claiming use of Scandinavian-sourced guarantees oforigin (GOs), meanwhile a Scandinavian organization reports near-zero locationbased scope 2 emissions because the local grid is powered by a significant
amount of non-emitting generation, without the need to retire GOs. When theselocation-based and market-based numbers are compared there is a perception of
double counting.

B.5. Reporting the location-based method emission total in scope 2
Current requirements on location-based reporting
The current Scope 2 Guidance requires all organizations to report scope 2 emissions using thelocation-based method for all regions and markets globally. See above sub-section B.1. “ Current
requirement on dual reporting” for requirements where operations exist in markets that provide
supplier-specific data or other contractual instruments.
Table 6.2 in the Scope 2 Guidance details the location-based emission factor hierarchy forselecting emission factors to attribute to an organization’s electricity consumption data.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Table 6.2 Loca on-based emission factor hierarchy (Scope 2 Guidance, page 47)
Data forms listed here should convey combus on-only (direct) GHG emission rates, expressed in metrictons per MWh or kWh.

Source: Scope 2 Guidance, Table 6.2, page 47

Feedback in support of reporting only the location-based method in scope 2
Within the survey responses proposing that the GHG Protocol’s Scope 2 Guidance only require
location-based emission reporting, responses varied regarding whether accounting andreporting using the market-based method should be (i) be made optional, and/or (ii) be
reported entirely outside of a scope 2 GHG inventory. Alternatively, some posit whether theobjectives of the market-based method would be more appropriately evaluated through analternative accounting method(s) or framework(s) (e.g., utilizing impact or consequential
accounting methods).
Among comments proposing that scope 2 requirements only include the location-based method,some highlighted the importance of using both the scope 2 GHG inventory (i.e., attributional)
and a project- or intervention-based (i.e., consequential) method to measure emissions. This
feedback suggested that attributional methods are intended and best suited for allocating18

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
responsibility, setting reduction targets, and tracking progress within specific boundaries, suchas a value chain. Consequential methods, on the other hand, are designed to assess whether
actions taken and/or investments made either reduce emissions or, critically, unintentionallylead to an increase in emissions outside a reporting organization’s defined boundaries. Section E
covers stakeholder responses on reporting an emission impact-based method in more detail.
Within many comments proposing a location-based only requirement, respondents alsosuggested reporting a revised location-based method. Section C in this report covers various
elements of the proposed modifications of the location-based method (e.g., updates to activity
data, emission factors, etc.).
These responses suggested several potential reasons they believe support requiring only thelocation-based method in scope 2 emission reporting: (i) from a physical power flow perspective
it is the most accurate method to allocate emissions embodied in physically undifferentiable
electricity, (ii) it is the simplest and most transparently comparable representation of anorganization’s electricity emissions, and (iii) it is one of the necessary methods whereby toensure value chain emission reduction targets are aligned with actual reductions in emissions to
the atmosphere.
Cited reasons from respondents included (not exhaustive):The location-based method more accurately reflects the allocation ofemissions from an organization’s value chaino The location-based method reflects the physical consumption of electricity
and emissions associated with the operation to generate that electricity. Thismethod is the necessary and appropriate method to reflect and account forthe physical reality of the consumption of electricity from a shared electric
grid (i.e., electrical energy consumed from a grid is undifferentiated andundifferentiable with respect to the origin of the energy consumption andthus emissions need be accounted for similarly).
o This method provides a meaningful quantification of emissions fromconsumed electricity that has been supplied from a shared distribution gridwithout distortion from what contractual instruments may have beenacquired independently for various policy and incentive purposes. Separately,
the impacts of these interventions are more appropriately quantified andreported via project-level evaluations.
o The location-based method is necessary to ensure that organizations meettheir value chain emissions reduction targets with actual reductions inatmospheric emissions equivalent to their claimed inventory emission
reductions.
Simplest, most accessible reporting methodo The location-based method is the most accessible option that is broadly
inclusive to organizations of all levels of sophistication, which is important fora global standard.
o Location-based scope 2 emission reporting is the simplest and mosttransparent means to compare emissions from consumed energy (e.g.,
electricity) between organizations.
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023


Aligns the allocation of value chain emission reduction targets with actual
reductions in atmospheric emissionso The location-based method provides a geographic load-based view of
emissions while incentivizing decision-makers to engage in improving energy
efficiency and supporting grid-level decarbonization within markets where
they have a footprint, whether through policy intervention, utility
collaborations, or other mechanisms. Individual scale actions to reduce
atmospheric GHG emissions are more appropriately quantified via projectlevel evaluations.
o Under current market-based accounting in scope 2, if an organization
reduces its footprint using EACs, the reported market-based footprint ofother organizations (assuming they report at all) would be artificially
increased due to the allocation of residual emissions. Any reduction of anorganization's inventory should correspond to a quantifiable reduction inatmospheric emissions without simply shifting the burden to otherorganizations.

Feedback on the challenges of reporting scope 2 with the location-based
methodRespondents raised several concerns about the exclusive use of the location-based method in
scope 2. In addition to the current absence of widely acknowledged credit and recognition for
project-based or intervention accounting in target- and goal-setting programs, some raised
doubts about the usefulness of requiring a location-based inventory. They question whether it isworth the time and cost burden, considering that little-to-nothing can be done to manage or
reduce the emissions measured by this method since top-down policy and energy efficiency
measures are generally the only options. Many also stated that that it does not accuratelyreflect the impact of an organization's actions on the actual emissions of the electric grid
system.
Although there was general agreement that the location-based method distributes the overall
emissions from electricity generation among all consumers based on their proportional usage,
respondents pointed out that it is still one of perhaps many subjective approaches for allocating
responsibility of indirect emissions. Respondents’ reasoning for this position noted the absenceof any direct and consistent correlation between the total amount of electricity consumed by anorganization and the actual electric power sector emissions produced as a result. Respondents
emphasized that the location-based method may not accurately reflect a fair or informative
allocation of system emissions (e.g., an existing facility consuming electricity on a clean grid
before a new coal plant was constructed must now account for emission-intensive generation
built to serve other, newer electricity customers). Absent any quantification of the real impact ofan organization's actions on total GHG emissions, respondents stressed the importance ofevaluating the location-based method’s usage in relation to the benefits it offers.
Feedback also called attention to the overall limited actionability of a location-based inventory
and concern that solely requiring and/or relying on the location-based method would slow or
entirely halt progress toward electricity sector decarbonization. These responses suggested that20

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
by allowing only a location-based method, organizations would effectively be limited to relying
on utility-led emission reduction targets or top-down government policy mechanisms. These
responses acknowledged the potential emission reductions from efficiency improvements,
relocating their entire business or institution to cleaner grid regions, etc., while also noting
potentially small overall impacts and/or the impracticality of such solutions.
Responses also cited that in some markets across the world where EAC tracking and tracing
systems exist for compliance purposes, there frequently is a legal right to the zero-emission
claims associated with certificates. Section 6.4.1 of the Scope 2 Guidance further elaborates on
this topic.

B.6. Reporting the market-based method emission total in scope 2
Current requirements on market-based reporting
The current Scope 2 Guidance requires organizations with any operations in electricity markets
that provide product or supplier-specific data in the form of contractual instruments to report
scope 2 emissions in two ways, the location-based, and the market-based method.
Organizations reporting scope 2 emissions using the market-based method are required toensure that any contractual instruments used meet the scope 2 quality criteria specified inTable 7.1 below.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Table 7.1 Scope 2 Quality Criteria (Scope 2 Guidance, page 60)
Further explana on on select Scope 2 Quality Criteria can be found in Sec on 7.5.

Source: Scope 2 Guidance, Table 7.1, page 60

Feedback in support of reporting only the market-based method in scope 2
Survey responses favoring the market-based method as the only required method tended torecommend that the disclosure of the location-based method could be included as optional
scope 2 information, reported outside of the (market-based) scope 2 GHG inventory, or
removed from the standard altogether. Within comments supporting the market-based method
there was also a range of interest in more clearly defining the role of project- or interventionbased emission accounting and reporting. Some suggested an emissions impact-based methodshould replace the current scope 2 location- or market-based method, e.g., the market-based
method would be calculated using a project- or intervention-based method and the result
reported as a scope 2 inventory total. Others proposed parallel reporting of an emission impactbased method alongside the location- and/or market-based method. This latter approach wasoften combined with highlighting a need to increase the prevalence of impact-based methods intarget- and goal-setting programs. Feedback on emission impact reporting is presented in
section E.
Responses emphasized several positions to justify only requiring the market-based method in
scope 2 emission reporting: (i) it is the only way to track consumer choice in electricity supply,22

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023(ii) it is currently the only available option to meaningfully incentivize voluntary climate action in
the electric power sector, (iii) existing targets and commitments tend to utilize market-based
totals, (iv) that ubiquitous use of residual mix data is the most accurate method to eliminate
double counting, and (v) that the market-based method has contributed to growth of therenewable energy market.
Cited reasonings from respondents included (not exhaustive):








The market-based method is the only way to track consumer choice inelectricity supply
o The market-based method is a framework designed to reflect how production
attributes of specified generation (e.g., 1 MWh of electricity produced without
direct GHG emissions) are tracked, purchased, and delivered to retail load. In
many electricity markets, these EACs are considered a legal instrument
conveying clearly defined attributes to the entity retiring the EAC.
A market-based method is necessary to incentivize voluntary climate
action in the electric power sectoro In the absence of any top-down policy or regulation, the integration ofcontractual instruments within reporting companies’ GHG inventories via themarket-based method is the only generally recognized lever for incentivizing
voluntary action and investment in carbon-free energy. It has helped
underpin the development of power purchase agreement (PPA) markets indozens of countries.
o The value of the GHG Protocol is to recognize and incentivize voluntary action
to decarbonize global electricity grids at the fastest possible rate. The
market-based method has encouraged the expansion of renewable energy
deployment and created a pathway that allows organizations of all sizes to
set ambitious decarbonization goals.
o The market-based accounting method is a critical element of scope 2
accounting as it provides organizations with an actionable tool to funnelmonetary resources to carbon-free energy projects and reduce the reportingorganization’s emissions through the tracking of carbon-free electricity.
Existing goals, targets and commitments are predicated on the marketbased methodo Many companies have public commitments, such as GHG reduction andrenewable energy purchasing targets, that were established using theexisting scope 2 market-based method. Any updates that drastically change
market-based accounting need to be evaluated relative to existingcommitments made across these target-setting schemes.
Ubiquitous use of residual mix eliminates double counting; creates anaccurate allocation of emissionso Allowing both location-based and market-based reporting in regions where
there are attribute tracking systems creates risk of double counting if the twoare compared because attributes claimed by an organization are also
included in the grid average emission factor used by that and otherorganizations. Residual mix data that represents the untracked or unclaimed
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023



generation, if used ubiquitously by reporting entities instead of a grid
average emission factor, would most accurately allocate emissions from theshared grid while also factoring in consumer choice.
o If a organization is not actively purchasing contractual instruments to cover
their energy consumption, they should report the residual mix for thatlocation. In some locations this may require the development of residual mix
calculations. This encourages countries to develop their residual mix
methodologies, if not already done.
o Additional stakeholder feedback on residual mix data is covered in section
F.4.
The market-based method contributes to growth and development of
renewable energy markets globallyo Power producers and retail providers cited a consistent increase in thenumber of customers who have demonstrated willingness to manage theirscope 2 emissions by purchasing energy from renewable sources using themarket-based method. Increased prevalence of bilateral renewable energy
contracts (e.g., virtual and physical PPAs), growth in customers who sign up
for green tariffs, etc. were identified as key metrics of successfully
contributing to the decarbonization of the energy system.
o Respondents cited that according to Bloomberg New Energy Finance, “total
volumes [of clean energy contracts signed by corporations] were equivalent tomore than 10% of all the renewable energy capacity added globally [in 2021],
showing the impact corporate sustainability pledges are having on clean
energy build.”o Some respondents also cited rapid growth in voluntary markets and EAC
transactions across Asia, Africa, the Middle East, and Latin America as further
support the market-based method is helping to accelerate carbon-freeelectricity deployment globally.

Within the comments proposing to require only the market-based method, there was a range ofpreferences concerning keeping the existing requirements essentially unchanged or introducing
a variety of modifications to the activity data, emission factors, and quality criteria associatedwith the market-based method. See section C for more on this topic.

Feedback on the challenges of reporting scope 2 with the market-based
methodSome respondents cited concerns regarding whether the market-based method is an accurate
and/or appropriate reflection of a reporting entity’s emissions from electricity and challenged
whether it results in true emissions reductions as per its intended ‘theory of change’. These
concerns often stated that the current method is not appropriate for tracking or representing
the physical consumption of energy and any claims to have caused emissions reductions mustbe supported by or be based upon a consequential GHG accounting analysis.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Many respondents noted that residual mix data is not available in many regions of the world,
and that without it, accurately apportioned electricity emission data is not realistic for all market
participants. Additional stakeholder feedback on residual mix data is covered in section F.4.
Many respondents stated that while they believe the scope 2 market-based method has had
some degree of impact catalyzing a range of different corporate renewable energy procurement
behavior, not all the actions have and/or will continue to result in collective changes in lowcarbon energy supply and/or global atmospheric GHG emission reductions. Some cited that theuse of market-based instruments to achieve science-based reduction targets, without any clear
demonstration of emission reductions, is a flaw of the market-based method. Others cited thatall procurement mechanisms are currently treated equally with respect to their ability to reducethe inventory emissions associated with a reporting entity’s load, despite the fact that they may
and likely do have different emission impacts.
In order to address these discrepancies, many respondents suggested updating the scope 2
activity data, emission factors, and quality criteria requirements within the market-based
method, covered in section C below. Feedback on additionality is covered in section D.

C. Responses on activity data, emission factors, andquality criteria requirements
C.1. Current data and quality criteria requirements for the location-based
and market-based methods
Chapter 6 of the Scope 2 Guidance outlines the basic process and necessary information for
calculating scope 2 emissions:
1. Collect all activity data, i.e., all energy purchased/acquired and consumed from an entity
outside of the organization or from owned/operated generation facilities where energy
attributes (e.g., certificates) have been sold or transferred.
2. Determine the most appropriate, accurate, precise, and highest quality emission factors
available for both the location-based and market-based (if applicable) methods.
3. Multiply all activity data from each operation by the emission factor applicable for that
activity based on the facility’s location or market.
Chapter 7 of the Scope 2 Guidance provides further details on the necessary scope 2 accounting
and reporting requirements, including the quality criteria that must be satisfied for any
contractual instruments used in the market-based method (see Table 7.1 on scope 2 quality
criteria, copied in section B.6. in this report). Additionally, on activity data, emission factors, andquality criteria requirements the current Scope 2 Guidance states:Annual consumption:o Organizations should report total annual consumption of purchased electricity,heat, and cooling (Scope 2 Guidance, section 7.2, page 61).
Emission factor selection:25

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Organizations should use the most appropriate, accurate, precise, and highest
quality emission factors available for each method (section 6.5, page 45).
o That organizations can evaluate emission factor data based on quality indicators
including their reliability, completeness, and geographic, temporal, andtechnological representativeness (Scope 2 Guidance, section 6.10.1, page 54).
Location-based grid average emission factors:
o Table 6.2 in the Scope 2 Guidance indicates preferences for selecting emission
factors for the location-based method (Scope 2 Guidance, section 6.5, page 47).
o The most appropriate spatial boundaries for emission factors serving thelocation-based method are those that approximate regions of energy distribution
and use, such as balancing areas and that all generation and emissions data
within this boundary should be aggregated and any net physical energy
imports/exports and their related emissions should be considered. Options arealso provided to use larger boundaries when necessary (Scope 2 Guidance,
section 6.10.1, page 54).
Market-based emission factor quality criteria:o Table 6.3 in the Scope 2 Guidance represents a hierarchy of instruments basedon the most precise (e.g., energy attribute certificates issued in units that match
consumption units, e.g., MWh) to least precise (averages of attributes
representing all unclaimed production in a region) (Scope 2 Guidance, section
6.5, page 48).
o If organizations have access to multiple market-based emission factors for eachenergy-consuming operation, they should use the most precise option for each
operation (Scope 2 Guidance, section 6.11, pages 54-57).
o Organizations shall ensure that any contractual instruments used in the marketbased method total meet the scope 2 quality criteria (Scope 2 Guidance, section
7.1, page 60):
 Criteria 4, Vintage: “Be issued and redeemed as close as possible to theperiod of energy consumption to which the instrument is applied”.
 Criteria 5, Market Boundaries: “Be sourced from the same market inwhich the reporting entity’s electricity-consuming operations are locatedand to which the instrument is applied”.
o Section 7.5 in the Scope 2 Guidance, “Additional guidance on Scope 2 Quality
Criteria” details potential considerations an organization should use in complying
with these requirements (Scope 2 Guidance, section 7.5, pages 63-65).
oC.2. Feedback on specificity vs. flexibility of scope 2 activity data, emission
factors, and quality criteria requirements
Survey respondents generally expressed an opinion that the current Scope 2 Guidance provides
significant flexibility in determining how to interpret various requirements (e.g., emission factor
applicability, quality criteria eligibility, etc.). Responses to the Scope 2 Survey were mixed inopinion concerning what, if any, updates should be made to the accounting and reporting
requirements for activity data, emission factors (for both the location- and market-based
methods), and quality criteria (for contractual instruments in the market-based method).
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Preferences varied concerning whether updates should provide new guidance and/or create
new requirements.
Some respondents urged that the revisions process should result in the stipulation of more
specific requirements that reporting organizations must adhere to, citing existing and new
research that such changes are necessary to accurately represent the GHG emissions of anorganization’s value chain. For both the location-based and market-based methods, these
responses suggested that such changes are required to ensure the credibility of a scope 2 GHG
inventory. Some respondents called for specific guidance on types and sources of emission
factors to use in location-based and market-based calculations, including guidance on what to
do in the case of missing national-level emission factors. More specific requirements were also
said by respondents to improve comparability and consistency across different organizations’scope 2 inventories. Within comments that argued for increased specificity, many respondents
also proposed that GHG Protocol should require the most precise or “granular” data and quality
criteria. Discussion on granularity is captured in sections C.3. and C.4.
Other comments suggested that the GHG Protocol should maintain or increase its current
flexibility in interpretation of requirements, emphasizing the importance of feasibility andachievability, and allowing organizations to have discretion in selecting the most suitable option
for their specific circumstances. Many of these responses said that the GHG Protocol should
only set the minimum criteria, and that regulatory and voluntary target-setting programs are
more appropriate for establishing specific requirements on allowable market-based options todrive change in electricity generation supply over time. Some responses also noted that any
changes that restrict market-based purchasing options or increase reporting complexity could
lead to decelerated action by organizations and slow progress toward climate change
mitigation. To address these practical challenges some suggested maintaining or minimizing theuse of prescriptive words like “shall” and instead keeping or using words like “may” and“should.” Within these comments, many respondents also suggested that the least precise dataand quality criteria should be the minimum criteria, termed here as “broad”. Discussion on
flexibility and broadness of requirements is captured in sections C.3. and C.5.
Commonly cited rationales for maintaining flexibility in interpretation of scope 2 requirements ormoving toward more specificity are summarized in Figure 2 below.

27

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Figure 2. Stakeholder feedback on specificity and flexibility
Most cited reasons include:
Stipulate specific• Grid modeling exercises demonstrate emissions reductions linked
requirements
when specificity is used*• Better facilitates comparison between organizations• Minimizes confusion in interpretation• Improves auditability• Potentially reduce risks of greenwashing*See Figure 3 for specific requirements.

Maintain/increase
flexibility ininterpretation• GHG inventory accounting and reporting needs to be easy andaccessible to all• Flexibility needed where data and procurement options areinconsistent• Specificity should be left to regulatory and programmatic GHG
disclosure programs

Some respondents suggested a wholly different approach to scope 2 accounting that is basedon matching emission impacts associated with energy production and consumption, which ispresented in section E of this report, ‘Feedback on introducing a new emissions impact
reporting requirement.’

C.3. Feedback on granularity vs. broadness of scope 2 activity data,
emission factors, and quality criteria requirements
Within responses that argued for prescribing more specific requirements or maintaining
flexibility regarding the interpretation of requirements, many stakeholders argued that GHG
Protocol should require or encourage the most precise or “granular” data and quality criteria.
Others argued that the least precise or “broad” criteria should be the minimum requirement,with the option for organizations to make a choice, or for regulatory or voluntary target-setting
programs to set their own additional criteria.
Commonly cited rationale for granular or broad requirements is summarized in Figure 3 below.

28

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Figure 3. Stakeholder feedback on granularity and broadness
Most cited reasons include:
Require• More closely aligns with physical delivery of electricity
granularity• Reduces issue with double counting• Enables scaling of new clean technologies and emission reduction
strategies that can only be effectively deployed using high resolution data
• Research indicates that procurement with:• hourly matching to consumption,• deliverability and• additionality
may improve alignment of inventory and system-wide emissions (IEA,
TU Berlin, Princeton University, Florence School of Regulation)
Keep broad

•
•
•
•

Doesn’t preclude market participation from orgs with fewer resources
Needed where data and procurement options are unavailable or difficult
to access
Granularity could restrict market development and investment in gridsthat need it most, leading to equity concerns
Allows for greater avoided emissions impacts from dirtier grids as
opposed to local, clean ones

C.4. Granular, specific requirements or encouragement
Most of the feedback requesting more specificity in scope 2 focused on requiring or encouraging
additional granularity. Granularity tended to be defined as activity data and emission factorsthat are temporally matched on an hourly basis, and using a market boundary that is alignedwith matching generation and load within the same physically deliverable grid boundary such as
in the same bidding zone, balancing authority, or similar criteria. Survey feedback included
suggestions for increasing granularity within both the location-based and market-based
methods.

Rationale for increasing granularity in location-based method
Some respondents referenced a 2022 study showing that the current location-based method
using annual activity data matched with annual grid average emission data is not granularenough to provide an accurate account of an organization’s grid-based GHG emissions, nor doesit incentivize corporate action for load shifting and changing consumption patterns overall.
These comments suggested that any location-based accounting should be done on an hourly
basis over geographical boundaries where electricity is physically deliverable, consistent withpower flow modeling.

Rationale for increasing granularity in market-based method
Most respondents’ rationale for increasing granularity of the market-based quality criteria
requirements reflect the positions that (i) the current Scope 2 Guidance allows for market-based
emission reduction claims without any clear global emission reduction benefits, and (ii) scope 2
emissions reporting must better align with real-world reductions in emissions to ensure
accuracy, accountability, and continued acceptance. It was also shared that any suchframework should make intuitive sense (e.g., be linked to physical realities such as requiring a29

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
reasonable grid connection between the electric generator and consumer, only claiming usageof solar energy during the daytime, etc.).
To address these challenges, most organizations proposing a more granular accounting
approach referenced a growing body of research, including from the IEA, TU Berlin, Princeton
University, and Florence School of Regulation. This research generally supports claims thatelectricity supplied from new assets, in the same hour on the same "deliverable" grid, not only
ensures zero-carbon electricity supply in the value chain of the consumer but also reduces
emissions at a system-level.
Comments encouraging more granular requirements also pointed to statements by European
TSOs made through ENTSO-E where they highlighted that more granular guarantee of origin(i.e., EAC) mechanisms are “needed to ensure an effective contribution to a fully decarbonizedelectricity system”.
Based on the above considerations, proponents of these new granular quality criteria
requirements suggest that the changes align market-based emission claims with anorganization's value chain emissions and do so using an attributional methodology consistent
with the GHG Protocol Corporate Standard.
Supporters also pointed out that using a detailed hourly-matched and deliverable attributional
accounting approach would create a system to better suited to making claims about using zeroemissions electricity. Importantly, this accounting method would be based on evidence that
demonstrates that such procurement actions lead to reduced system-level emissions (i.e., using
an attributional or allocational methodology supported by consequential evaluations).
Suggested areas to make these modifications included addressing activity data, emission
factors, and quality criteria as outlined below.

Granular market boundaries
Responses for more specific requirements on market boundary quality criteria requirements
generally aligned with the discussion on granularity presented above. How stringent the market
boundary should be made varied from using the local electric grid plus any interconnected grid
system, to a strict demonstration of deliverability using power flow models, congestion pricing
analysis, or similar approaches.
Stated reasoning for these changes focuses on the concern that the current quality criteria failto plausibly represent an organization’s value chain emissions, i.e., that any claimed usage of
attributes of energy production (i.e., EACs used in a scope 2 inventory) must originate fromgeneration facilities that could have reasonably supplied energy to the location claiming theattributes.
This position was also often linked to aligning a GHG inventory emission reduction claim by areporting organization, with an actual reduction in atmospheric emissions. A similar example
was often provided:30

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
A wind facility generates one EAC. Two different building owners, each located on different gridregions far away, are considering buying that wind EAC. Depending on which organization buys
that EAC, the same EAC would end up having a different magnitude of GHG emission reductions
between the two organizations’ scope 2 inventory. This is because there are differences in thelocal grid emission intensity of the wind generator and the grid load at the two different
locations (e.g., building A’s scope 2 total in a coal-heavy region would drop more than building
B’s in a much cleaner region). Requiring EACs be sourced from generation within the samedeliverable market boundary as the load claiming its consumption could mitigate this otherwise
artificial outcome.
Note that section E, ‘Feedback on introducing a new emissions impact reporting requirement’discusses survey feedback on emissions impact accounting.

Granular vintage requirements
Responses for more specific requirements on vintage quality criteria requirements generallyaligned with the discussion on granularity presented previously (section C.4.) as well as similarreasoning for more specific market boundaries.
Responses advocating for hourly-specific vintage requirements noted it would provide a moreaccurate estimate of the emissions associated with organizations’ electricity consumption andcreate a closer connection between organizations’ clean electricity purchasing and their actual
electricity consumption.
This outcome was supported on the premise that the emissions associated with theconsumption of electricity can vary widely based on the time of day when the electricity isconsumed depending on the mix of resources providing electricity to the grid at a given time.
Other respondents indicated scope 2 should specify that EACs must be redeemed within thesame season, month, or day, generally noting that while shorter periods are presumably moreaccurate than longer periods, a transition period from annual to stricter vintage requirements
would likely be necessary for market adoption.

Considerations on feasibility of granular requirements
The majority of support for more specific and granular reporting requirements recognizedchallenges inherent to such a transition, while maintaining that such changes are necessary forthe reasons stated above. Several options were presented to help manage a transition period.
Initial steps included a phase-in period where vintage requirements are phased in from annual
to monthly, and monthly to hourly resolutions, and that market boundaries transition to becomealigned with grid regions, similar to transitions adopted by emerging policy programs andregulators.
To make hourly accounting more accessible, some respondents proposed using standardizedload and generation curves as the default when only annual or monthly data is available. This31

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
was suggested to allow for quantifying emissions resulting from fossil fuel sources during
coverage gaps.
Some respondents highlighted that existing standards, such as ANSI, suggest that there isalready published methodology for implementing hourly consumption data and that it is possible
to establish default data if hourly metering is prohibitive. Others also pointed to a variety of new
accounting software tools that make implementing granular data accessible.

C.5. Broad, flexible requirements
Most of the feedback around maintaining flexibility in requirements centered on the continued
use of annual data and broad market boundaries and the need to ensure feasibility ofrequirements. There was marked recognition of the various challenges that organizations may
face in obtaining activity data, emission factors, and other information to comply with thequality criteria requirements. Responses also highlighted challenges, both internal to anorganization and externally, regarding engaging in energy procurement strategies that support
decarbonization, including EAC procurements, long-term purchase agreements, new resource
development on-site or off-site, and other related activities. The importance of multiple
procurement options for internal decision-making processes was highlighted as a valuablemeans to manage the range of risks and benefits associated with decarbonization pathways.
Responses also noted that significant changes (e.g., entirely removing the option for market
instruments) should be considered with respect to the impact on existing contractual
arrangements, the remaining or new options for organizations to meet climate goals, as well as
the implications for an organization’s willingness to take on long-term commitments without an
expectation of reasonable stability in GHG Protocol accounting practices.
Respondents in support of flexible and broad requirements also suggested that the role of the
GHG Protocol is to maintain an accounting framework that can be adapted and adopted for
different purposes in regulatory and voluntary target- and-goal-setting contexts.
Suggested areas to make these modifications included addressing activity data, emission
factors, and quality criteria as outlined below.

Flexible market boundaries
Some comments advocating for flexible market boundary definitions stated that this supports
wide market-based procurement options for organizations of all sizes and sophistication to takeaction. Conversely, narrow market boundaries could have the opposite effect and may restrictprocurement and other investments that catalyze decarbonization.
Responses on this topic also outlined that market boundaries need no relation to a physical gridbecause attribute markets can be different (e.g., larger) than the physical grid network,
because attributes (direct emissions) are not actually associated with the physical power
delivered through the grid.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Keeping boundaries for market-based scope 2 quality criteria broad was also encouraged due tothe difficultly in effectively and accurately assessing market boundaries based oninterconnections, transmission constraints, congestion pricing, power deliverability models, etc.
Some of these comments suggested that the GHG Protocol should defer to jurisdictional
standards where they exist, while keeping broadly applicable requirements.
Discussion on flexible market boundaries also noted that this could expand the options available
to organizations to take actions which enable the greater emissions impact (e.g., allow
organizations to procure and develop renewable energy in the regions where it has the greatest
emission reduction potential). Discussion on reporting emission impacts is covered in section E.

Flexible vintage requirements
Most responses favoring flexible vintage requirements stated the quality criteria should beunchanged, allowing organizations to match their annual electric consumption with EACs
produced as close as possible in time. The reasoning for this outcome centered primarily on
facilitating engagement across a wide range of markets with varying product availability andtransaction infrastructure.
Many supporters for flexible vintage requirements raised concerns that a more granularmatching (e.g., hourly) requirement would hinder overall demand for clean energy procurement
efforts. The lack of existing granular products, costs, and difficulties for companies with widelydistributed facilities, interactions with scope 3 reporting requirements, as well as challenges tostructuring renewable energy procurement portfolios were noted as obstacles to more granularvintage quality criteria requirements.
Some respondents also noted that the current vintage quality criteria requirements alreadyallow organizations to use more granular accounting options if they wish to do so and thus
further changes may be unnecessary.

C.6. Other feedback on specific requirements
Accounting for bundled and unbundled energy attribute certificatesSome responses advocated for only allowing EACs bundled with the purchase of the underlying
energy, or that the EACs be required to be included with the energy supplier. The mostcommon reasoning for this position was related to improving causal linkage between thegeneration and purchase of electricity thus any emission reduction benefits. Section D of thisreport further discusses causal linkage, presented herein using the term: “additionality.”
Others supported the current equal treatment of both energy purchases bundled with EACs, or
procuring certificates on their own (i.e., unbundled). Some said that bundled and unbundled
EACs are fundamentally equivalent with one another. It was noted that in the US, current state
Renewable Portfolio Standards (RPS) often cannot be met by utilities without purchasing
unbundled EACs.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Some also said that disallowing or discouraging unbundled EAC transactions would have an
outsized impact on the entire EAC market and renewable electricity development landscape. For
example, an onsite solar project that sells its EACs to make the project’s economics favorable
would become unprofitable without the ability to make such EAC sales. Other examples notedthat the project economics for new PPAs and virtual PPAs (vPPAs) could also be less favorable if
the off taker buying the energy plus EACs was no longer able to sell surplus EACs. Some also
cautioned that any discouragement of unbundled EAC transactions could also decrease accessto renewable energy in underserved customer segments.
These comments highlighted the practicality that many companies do not have access to any
procurement options other than unbundled EACs. Some respondents cited that according to the
US Environmental Protection Agency (US EPA), except for retail EACs, no other individual
procurement option is available that covers even half of the electricity consumers or half of total
electricity sales in the United States. This occurs because of challenges in meeting creditworthiness requirements necessary to engage in a PPA, as well as the general complexities ofthe process, regulatory hurdles, and lack of availability in some markets. Given their lower
barrier to entry, unbundled EACs are the primary way for many companies to claim theenvironmental attributes represented by renewable electricity and can be an equitable option topromote access to renewable energy for underserved customer segments. Survey respondents
with this position tended to suggest that flexibility in any requirement around bundled or
unbundled EACs needs to be maintained.

Developing an emission factor data source database
Several responses expressed challenges in comprehending and choosing scope 2 emission
factors from the numerous sources available to organizations, for both the location-based andmarket-based methods. To address this, it was suggested that the GHG Protocol should
establish a definitive list of acceptable emission factor data sources and facilitate the creation ofinternational databases for emission factors. Advocates stated this approach would enhancetransparency and consistency in emissions reporting.

Using consumption-based emission factors instead of production-based
The Scope 2 Guidance section 6.5 states that grid-average emission factors should convey
combustion-only (direct) GHG emission rates, representing electricity production occurring in adefined grid distribution region. They should also reflect net physical energy imports/exports
across the grid boundary.
Some respondents suggested that electricity consumption emission factors, as opposed to
production, need to be required to appropriately reflect potentially significant impacts of net
physical energy imports and exports across a grid boundary instead of only using local
generation within a given grid territory. This is necessary to accurately represent the emissions
associated with an end user’s consumed electricity.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
However, it was also stated that consumption-based emission factor datasets are not widely
published by governments nor by international agencies, unlike production-based emission
factors, which are typically used in location-based inventories.

Technology eligibility
Respondents suggested scope 2 requirements should explicitly indicate that zero-emission
electricity sources, as opposed to just renewable electricity sources, can be included in theinventory as such, regardless of the emission factor being stated alongside the technology. It
was noted by many that EACs frequently omit specific GHG emission factors. Additional
feedback supported all-attribute tracking for reporting purposes (e.g., a tracking system orregistry records a certificate for all MWh generated, regardless of the technology type thatgenerated the power, any eligibility for state or federal renewable or clean energy certificates,etc.).

Order of operations for applying emission factors using the data hierarchy
Some respondents urged that specific guidance is needed on the order of operations to use
when applying different types of emission factor sources provided in the data hierarchy in Table
6.3 of the Scope 2 Guidance (see Table 6.3 below). For example, respondents suggested that if
a utility delivers a product with 20% renewable power substantiated by EACs, then the utility’scustomer should be able to claim that 20% of their purchased energy is covered by renewableelectricity and only the remaining 80% would be applicable for further market-based EAC
retirement. Confusion was raised if the current requirements simply assign the utility a supplierspecific emission rate, and whether EACs for the entire load would be necessary to substantiate
a 100% claim. Section 6.6 in the Scope 2 Guidance further discusses this issue.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Table 6.3 Market-based scope 2 data hierarchy examples (Scope 2 Guidance, page 48)

Source: Scope 2 Guidance, Table 6.3, page 48

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Additional feedback from respondents







Additional clarity on recommended or preferred language to substantiate EAC retirement
and if retired EACs can be allocated through a clear chain of custody.
Further specificity on the content that must be included in a supplier- or utility-specificfactor (e.g., resource type, EAC procurement and retirement details, etc.).
More clarity was called for on potential interactions between verified carbon offsets sourced
from carbon-free generation facilities and any EACs from the same resource.
More clearly articulate the relationship between regulatory compliance programs that
require energy providers to procure energy attribute certificates and the supplier emission
factors that they provide to consumers, including whether separation of claims arenecessary.
Additional clarification is needed regarding whether exclusively carbon dioxide (CO 2-only)
values are acceptable or if they must be carbon dioxide equivalent (CO2e). Respondents said
that some, but not the majority, of external assurers argue that supplier-specific emission
factors must either (i) use the common unit, CO2e or (ii) report greenhouse gases
separately, e.g., CO2, CH4, and N2O separately. Respondents also said that in practice, most
suppliers/utilities do not publish this information and it is unrealistic to expect this without
regulation requiring them to do so.

D. Feedback on proof of additionality
D.1. Current requirements on additionality
Section 11.3 in the current Scope 2 Guidance notes that contractual instruments claimed in themarket-based method need not fulfil criteria such as offset “additionality” or prove the overallmarket impact of individual purchases or supplier programs result in direct and immediatechanges in overall supply.
The Scope 2 Guidance states that in GHG accounting, additionality is a term specificallyassociated with offsets and project-level accounting, which is distinct from corporate GHG
accounting. The claim that X metric tons of GHG emissions have been avoided at a global level
can only be credible if the offset credit was the “intervention” that made the project happen—
and that, without that intervention, that project would not have occurred. Such a claim requires
proof of cause-and-effect and is critical to support the integrity of offset credits. However,offsets represent a different claim (avoided GHG emissions compared to a baseline scenario)
than energy generation attributes (X GHG emissions from Y unit of energy generation). Scope 2
reporting is a report of usage and as such is independent of issues associated with additionality(Scope 2 Guidance, section 11.3, pages 90-91).
Furthermore, regarding the concept of accounting for reductions in indirect value chain
emissions the Corporate Standard states:

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
“Reductions in indirect emissions (changes in scope 2 or 3 emissions over time)
may not always capture the actual emissions reduction accurately. This is because
there is not always a direct cause-effect relationship between the activity of thereporting company and the resulting GHG emissions. For example, a reduction in
air travel would reduce a company’s scope 3 emissions. This reduction is usuallyquantified based on an average emission factor of fuel use per passenger. However,
how this reduction actually translates into a change in GHG emissions to theatmosphere would depend on a number of factors, including whether anotherperson takes the “empty seat” or whether this unused seat contributes to reduced
air traffic over the longer term. Similarly, reductions in scope 2 emissions
calculated with an average grid emission factor may over- or underestimate theactual reduction depending on the nature of the grid.
Generally, as long as the accounting of indirect emissions over time recognizes
activities that in aggregate change global emissions, any such concerns overaccuracy should not inhibit companies from reporting their indirect emissions. In
cases where accuracy is more important, it may be appropriate to undertake amore detailed assessment of the actual reduction using a project quantification
methodology.”

D.2. Stakeholder responses on additionality
Feedback to keep additionality requirements outside of scope 2
Some survey responses aligned with the current position in the Corporate Standard and Scope 2
Guidance on the role of additionality. This included feedback that the market-based accounting
method applies to all energy generation in a defined grid, not just “low-carbon” or renewableenergy from projects supported by a specific organization’s financial support and thatconsiderations of offset additionality criteria are not fundamental to, or largely compatible with,the underlying rules for market-based scope 2 accounting and allocation.
Responses favoring continued exclusion of additionality from inventory accounting further
refined this position in several ways, including a discussion on the importance to distinguishelectricity “usage” from “impact” claims and view additionality as appropriate to incorporated inonly the impact assessment. Some of these comments also proposed a two-pronged approach:Keep a market-based inventory accounting (i.e., attributional) method for reporting
emissions from electricity use, requiring load matched with generation on a time andlocational basis, ideally hourly and deliverable. This approach was described as allowing for
inventory reductions through transactions that change load matching, while still reflecting
emissions from use. Additionality was identified as irrelevant to constructing this type of
inventory.



Also include a project- or intervention-based accounting (i.e., consequential) method
requirement where high-emission transactions are calculated and reported, considering
additionality as an important factor. This ensures and enables organizations can effectively
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
prioritize interventions with high impact and disclose transactions with both significant andminimal (or negative) emissions impact.

Feedback supporting introducing additionality requirements in usage claimsin scope 2
Within responses supporting the introduction of additionality requirements, there was a general
opinion that proof of additionality or a clearer connection with causality (e.g., the organization
making a claim helped cause the outcome it is taking credit for) should play an important role in
the future of credible scope 2 accounting.
Many of these responses stated the market-based method in its current form has thus far
lacked any definitive demonstration that the accounting method has resulted in an aggregatechange in global emissions over time. These responses cited peer-reviewed literature fromNature Climate Change and research from Princeton University that the current approach has,in fact, not achieved this outcome.
Reasoning and potential explanations for these outcomes highlighted issues of inadequate pricesignals for EACs in some markets where both too-low demand and an overabundance of
unbundled EACs from existing carbon free generation facilities create oversupply in the market.
It was also noted that it is becoming increasingly likely in many parts of the world that solar
and wind projects would be built anyway for economic or policy reasons not related to voluntarybuyer actions.
For the market-based method to become sufficiently credible, respondents included a range of
quality criteria updates to ensure additionality and thus that reductions in an organization’s
scope 2 emissions inventory correspond to real world emissions reductions. There were many
cited examples of circumstances that could affect whether a project (bundled with its attributes,
or unbundled certificates) would be considered additional. These included (not exhaustive):








The degree to which a PPA/vPPA project benefits from government incentives,
legacy investments, etc.
Whether grid connection issues rather than only financing are preventing a projectfrom being built
Whether there is oversupply relative to demand for EACs in a given market at any
given time (where a proxy such as a price threshold would need to be determined)
The types of technology being used in a PPA/vPPA (with newer or less pervasive
technology likely to be more additional compared to wind or solar)
The range of procurement options available (PPAs/vPPAs, green tariffs, unbundled
EACs, etc.) and variations in how effective each are at driving an increase inrenewable energy capacity according to a to-be-defined set of metrics
The idea that additionality is not likely to be a binary variable for renewable projects,
but more likely to exist on a spectrum

Respondents drew parallels to the carbon offsets market, which requires offsets to pass anadditionality test, and urged the GHG Protocol to introduce quantitative thresholds for EACs to
be deemed additional and/or of high carbon reduction quality.
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
Some provided examples on how additionality could be verified, such as introducing
requirements around asset age, subsidy status, repowering, avoided curtailment, and long-term
contracts. Some said additionality could be proven by EAC prices that are at or above a marketspecific floor price, which should be set and managed by an independent body. Other
respondents pointed to the Clean Development Mechanism Additionality Test of the UNFCCC asa resource.
There were varying degrees of how supporters of various potential updates to scope 2
addressed additionality as a requirement. For example, some granular accounting proponents
viewed including various types of additionality measures as a fundamental requirement
alongside criteria of deliverability and hourly matching. Responses prioritizing emission impact
reporting (presented in section E) also included a spectrum of appetites for additionality
requirements.
Others noted that additionality, while in theory a helpful indicator of impact, is too difficult toprove. For example, some said that additionality may be difficult to identify because of theopaque nature of the investment process, and that it requires counterfactual analysis. These
respondents argue that that for this reason, proof of additionality should not be required.

E. Feedback on introducing a new emissions impact
reporting requirement
E.1. Current requirements on avoided emissions
Currently, organizations can calculate and report estimated grid emissions that are avoided by
low-carbon energy generation and use separately from the scopes. The Scope 2 Guidance
presents an introduction to how GHG emissions inventories should be prepared at thecorporate, project, and product levels in Chapter 1. Section 1.1 references the GHG Protocol for
Project Accounting (Project Protocol) which describes how companies can quantify the GHG
impacts of specific projects undertaken to reduce emissions, avoid emissions occurring in the
future, or sequester carbon. Within the context of the electric power sector, this type of analysis
broadly seeks to reflect the impacts of clean generating resources on the rest of the grid: forexample, the power output and emissions from a fossil-fuel generation facility may be backed
down or entirely avoided by using output from a low-carbon electricity generating facility.
The current Scope 2 Guidance (section 6.9) notes that these avoided emissions estimates
inherently represent impacts outside the inventory boundary, given that they include the overall
impacts of a given intervention on the entire electricity system, as opposed to the emissions
exclusively attributable to the reporting organization. Avoided emissions estimates are notnecessarily equivalent to reductions in global emissions and should therefore not be used toreduce an organization’s footprint. However, the guidance states that quantifying avoided
emissions can provide several technical and strategic benefits, including:40

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023


Identifying where low-carbon energy generation, load management, etc. can have thebiggest GHG impact on an electricity system, based on operating margins.
Demonstrating that grid-connected generating facilities provide system-wide services in
addition to conveying a specific emission rate at the point of production.

Section 6.9 of the Scope 2 Guidance directs organizations interested in this type of analysis tofollow project-level methodology; see GHG Protocol Project Protocol and the sector-specificsupplement, Guidelines for Grid-Connected Electricity Projects. This may be most beneficial
where an organization has taken actions that avoid higher-carbon generation dispatch at themargins.

E.2. Stakeholder responses on emissions impact reporting
The Scope 2 Survey responses included a significant interest in creating a new requirement toreport avoided emissions.
Generally, respondents identified that quantifying avoided emissions from interventions can be
useful to highlight actions beyond the organization’s GHG inventory and that requiring thereporting of this information would incentivize organizations to focus on making investmentsthat maximize emission avoidance from the electricity grid. Importantly, this approach enables
organizations to focus on engaging with projects that have the most impact without
constraining development to where the reporting organization has operations consuming
electricity. This was repeatedly emphasized as a means to encourage clean energy development
globally, where it is most needed both from an emission impact perspective as well as energy
equity and other socioeconomic benefits.
Preferences varied on where and how this type of information should be reported, though most
respondents shared common motivations. Some proposed modifications to the current scope 2
market-based method; others suggested withdrawing the current market-based method andreplacing it with a requirement to report location-based emissions alongside a project- orintervention-based accounting method. Performing all three evaluations, i.e., dual reporting of alocation-based and market-based scope 2 inventory, and a project- or intervention-based
impact report, was also suggested.
Several respondents highlighted that more analysis quantifying the benefits of implementing an
avoided emissions approach at scale would shed further light on the benefits of thismethodology.
An illustration of the challenge that some stakeholders wish to better address can besummarized by the following examples:An organization has load in a high carbon intensity grid region with electricity generated
by predominately coal, oil, and gas generation. The reporting organization matches all
their load with EACs generated by a renewable energy project situated far away on adifferent, much cleaner electricity grid region. When comparing the emissions inducedby the organization’s (high-carbon) load with the emissions avoided by clean (lowcarbon) generation on a different grid, the load in the dirty grid induces more emissions
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

than the generation in the clean grid avoids. However, regardless of this outcome theorganization would report zero scope 2 market-based emissions.
The same example could be considered with the opposite siting configuration: theorganization’s clean energy investment in a dirty grid avoids more carbon than theiroperation in a clean grid induces, yet they would still report the same zero scope 2
market-based emissions.
A third example considers that the emissions associated with the time of day in which anorganization uses electricity may be significantly different than the emissions avoided at
the time of day in which their renewable energy purchases or projects generate clean
electricity.

The absence of target- and goal-setting programs’ recognition for avoided emissions was also
highlighted as a challenge. Because there is nowhere meaningful to report information thatrecognizes organizations’ actions for maximally avoiding emissions, respondents emphasized alack of any emission reduction incentives to use electricity at times of the day when the grid iscleanest, nor to site a renewable energy project in a grid that would avoid the most emissions.

Responses on where to report emissions impact
Respondents noted an absence of any a clear program or reporting category to reportemissions impact, avoided emissions, or project- or intervention-based inventories, particularly
if not permitted in a scope 2 inventory.
Many respondents of the Scope 2 Survey indicated that while currently an optional disclosure
category separate from the scopes, requiring the reporting of emissions impacts for purchased
electricity, heating, or cooling is necessary. Some suggested this could be implemented as areplacement for either the location-based or market-based method in scope 2 or reported
separately as a supplemental number. Respondents stated that such a requirement is crucial for
ensuring avoided emissions and impact-based accounting are appropriately valued in theemission disclosure and target-setting ecosystem, ultimately mobilizing billions of dollars
globally in clean energy investments.
Stakeholders interested in this topic often pointed to the current lack of integration between
inventory reporting, emissions impact disclosures, and target-setting programs. Some responses
highlighted that both the concept of emissions impact as well as marginal emission factors,
which are based on consequential impacts to the system, are currently incompatible with the
Science-based Targets Initiative’s (SBTi) target validation protocol. These comments stated theeffective result of this is that organizations pay little-to-no attention to avoided emissions orother impact-based metrics given that SBTi is predicated on the GHG Protocol’s attributional
inventory approach.
Some responses thought that reporting of emissions impacts outside of the scopes as aseparate figure should be required so that organizations can report their efforts of reducing
emissions outside of their value chain, with potential similarities to offsets. However, other
respondents said that, while avoided emissions or emissions impact assessments can be usefulprospectively to make determinations between choices in procurement options, they are not42Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
indicative of a project offset because marginal emission rate (MER) data conveys avoided
emissions, not direct emissions reductions. Some also urged a need for more discussion theintersection of EACs and carbon offsets, questioning, for example, if a carbon offset issued froman electricity project instead of an EAC provides a GHG emissions claim for the associated MWh.
Feedback also noted that the current Scope 2 Guidance dual-reporting requirement is alreadypotentially cumbersome with two emission totals and adding a third number would further
complicate many general users’ understanding of GHG emission reporting data.

Responses on how to report emissions impact
Some respondents said that, unlike today’s scope 2 calculation that allocates total systememissions to the consumption of electricity by organizations, the focus should instead be placedon the marginal emissions impacts of a load’s electricity consumption and the impact of a clean
energy resource’s generation output. Therefore, rather than attributing total system emissions
to load (i.e., using grid averages) and accounting for market-based transactions by assigning azero-emission production rate (i.e., each EAC retired yields 1 MWh without emissions), theemissions impact of each activity of the reporting organization should be measured andaccounted for accordingly.
A commonly suggested method for calculating an organization’s emissions impact is simplified
by the following example:

Emissions Impact = Induced Emissions – Avoided Emissions
Induced Emissions:In many responses, induced emissions were defined as the total greenhouse gases
emitted into the atmosphere because of the generation of electricity an organization
consumes from the grid where it operates. It was suggested that this be calculating by
multiplying activity data (i.e., MWh consumption) by locational marginal emission rates
or LMERs (i.e., marginal CO2e/MWh), as opposed to grid average emission rates (i.e.,
average CO2e/MWh) that are currently used for calculating scope 2 emissions.
Other responses proposed using grid average emission factors to calculate the induced
emissions allocated to load.

Avoided Emissions:

Avoided emissions, in these examples, were defined as the greenhouse gases estimatedto have been avoided from being emitted into the atmosphere because of thegeneration from clean energy resources, emission-optimized dispatch of batteries,
shifting load from high to low marginal emission periods, or other electricity-related
interventions taken by an organization. This could be calculated, for example, bymultiplying a clean energy project’s generation data (i.e., MWh generated) by LMERs(i.e., marginal CO2e/MWh).

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Responses on how to implement emissions impact reporting
Respondents who discussed implementing emissions impact reporting noted that to practically
implement an emission impact reporting requirement, there would be a need for sufficient
MER/LMER data availability and a standardized methodology for calculating MERs, in addition to
the development of a broader emissions impact reporting standard(s).
Respondents noted that MER data currently only exists in certain markets and mostly covers
MERs on an annual and regional basis, though respondents cited that ideally avoided emission
calculations need to use granular MER data (e.g., consumption is matched in time with thephysically deliverable marginal generation resource to that load, and generation is similarly
matched in time against the marginal generating resource dispatched for that location). As an
example, the US EPA publishes MERs by region, project type, and year in its AVERT database.
However, at the hourly and sub-regional level, this data is only currently publicly available in the
United States through two of the country’s independent system operators. In other regions of
the world, this data is more obscure or unavailable, though several non-governmentalorganizations and private companies are beginning to model and market this data in recent
years.
Comments on this topic identified that organizations providing access to this data tend to use
varied methodologies in their modeling calculations and estimations, leading to sometimes
inconsistent or incomparable results. For example, MERs can reflect impacts from interventions
over varied time frames, such as long-term impacts (e.g., building a new renewable asset thatis incorporated into a utility’s resource plan) or short-term impacts (e.g., operating a battery tohelp reduce load during high emission hours on a grids). Based on the survey responses there
does not yet appear to be clear alignment on which estimation methodologies (e.g., short-run
or long-run marginal emissions) are best suited and most accessible for incorporating avoided
impacts.
Respondents suggested that building out a widely accepted database of currently available MER
data from grid regions around the world would be necessary for the overall success andconfidence in emission impact claims. Many thought that the GHG Protocol could play a role bycreating a standard or best practice guidelines for MER calculation methodology that data
providers must meet to be acceptable for use in an emissions impact reporting method, andhow companies should estimate this information when source data is not available. Some
respondents also suggested that the GHG Protocol develop data hierarchy guidance onbalancing the accuracy of temporal and geographic granularity of consumption data andmarginal emission rate data, similar to the data hierarchy guidance encouraged by stakeholders
that support a modified market-based method as presented in section C above.
Lastly, respondents noted that the GHG Protocol should recognize that the definition of impact
will continue to evolve, and any additional emissions impact reporting standard should bedesigned either to be flexible or updated on a regular basis.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

F. Feedback on additional guidance, new technologies anduse cases
Almost all respondents agreed that the Scope 2 Guidance would benefit from updated andexpanded clarifications and new guidance on how to perform specific scope 2 emission
calculation steps in a variety of circumstances. Feedback was also provided with suggestions
related to emerging technologies, types of data, and other topics.

F.1. Accounting for purchased steam, heat, and cooling
Current requirements on accounting for purchased steam, heat, and cooling
While scope 2 as an emissions reporting category applies to indirect emissions from thepurchase/acquisition and consumption of electricity, steam, heat, and cooling, the Scope 2
Guidance focuses primarily on electricity purchases and use. Appendix A in the Scope 2
Guidance addresses accounting for steam, heat, and cooling.
The Scope 2 Guidance states that organizations are required to report emissions from thepurchase and use of steam, heat, and cooling energy products the same as for electricity: dual
report according to the location-based and market-based method, noting that these types ofpurchases may result in the same total where direct line transfers of energy are used.

General feedback on accounting for purchased steam, heat, and coolingSome survey respondents suggested that more guidance and examples are needed on reporting
scope 2 emissions associated with purchased steam and heat consumption, including various
production sources of heat such as air-, ground-, or water-source heat pumps, exothermal
processes, combined heat and power (CHP) resources, as well as district heating systems.
In this feedback, several respondents also urged for










A more detailed explanation on the dual reporting requirement for emissions fromenergy supplied by district heating facilities, including if and how energy attributecertificates apply.
Provision related to accounting for indirect emissions from purchased energy thatoriginates from the combustion of renewable natural gas or waste incineration at theplant level.
Updates and revision of accounting rules from GHG Protocol Allocation of GHG Emissions
from a Combined Heat and Power (CHP) Plant (2006) to include new guidance forallocation of emissions from CHP, specifically any hierarchy of preferred methodologies
as well as harmonization with regulatory and policy frameworks globally.
Estimation methodologies for calculating appropriate and conservative emission factors
for purchased steam, heat, and cooling when a supplier does not provide emission rates
based on their actual production intensities.
Accounting methods for energy produced by new technologies such as hydrogen, andother emerging technologies.
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Feedback on accounting for waste heat
Appendix A also covers how to treat steam, heat, and cooling as a “waste” product, i.e., theenergy would have otherwise been vented into the environment but is instead captured for
useful work. When a reporting organization is supplied these energy products from a third party
via direct line as “waste” from an industrial process, accurate emissions accounting requires theunderlying emissions associated with the original generation process of this heat to be reported.
Feedback on this topic suggested that the GHG Protocol should provide supplemental guidanceon how and where to report avoided emissions from installation and operation of fossil-basedenergy sources when an organization instead purchases waste heat. Rationale for this approach
included enabling incentives for organizations to use waste heat from other companies.

F.2. Emission factors used in scope 2 from waste-to-energy
The Scope 3 Standard, category 5, ‘Waste Generated in Operations,’ includes a discussion on
accounting for emissions from waste when that waste is sent for incineration at a facility withenergy recovery (waste-to-energy). The Scope 3 Calculation Guidance states that theconsumers of the energy generated from a waste-to-energy combustion process should accountfor the emissions from incineration in their scope 2 emissions (Scope 3 Calculation Guidance,
Chapter 5, page 80).
Some respondents requested the emission allocation across scope 2 and scope 3 category 5 bereevaluated, proposing that energy products such as heat recovered from waste incineration(also known as “waste-to-energy (WTE)” or “energy-from-waste (EfW)” i.e., when energy
produced from the combustion of municipal solid waste (MSW) is used to generate electricity,heat, etc.) should be treated as having a zero-emission factor when reported in end-users’
scope 2 inventory. The rationale for this new approach was based on a position that emissions
from the waste decomposition would have otherwise been vented to the environment if notincinerated for energy distribution. Additionally, these respondents stated that there is a needto shift the emission burden from the consumer of purchased energy to the one producing thewaste because doing so would better incentivize the company producing waste to reduce it.
These respondents further pointed out that if incineration is the only available option for waste
treatment, it is possible that any reduction of purchased energy has zero effect on the need for
waste incineration. The respondents also postulate that the current GHG Protocol methodcounteracts material recycling, promotes inefficient use of energy, and does not comply with EU
legislation and other disclosure rules (e.g., the standard EN 15804 and the EPD system), which
may lead to increased emissions of greenhouse gases.
Additionally, potential complexities were identified between appropriately allocating emissions
between a reporting organization’s scope 2 and scope 3 when they both generate waste andpurchases the waste-to-energy output (e.g., purchasing significantly more emission-intensive
steam or heat than the organization’s proportional share of waste incinerated, or alternatively ifthey generate a significant volume of emission-intensive waste but only buy comparatively little
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
steam or heat from the waste-to-energy facility).

F.3. Reporting transmission and distribution (T&D) losses
Current requirements on reporting T&D losses
Transmission and distribution losses refer to the amount of electricity that is lost during theprocess of delivering it from power plants to consumers due to factors such as resistance inpower lines and equipment inefficiencies. The GHG emissions embodied with T&D losses arereported in scope 3 category 3 for energy consumers. The total energy quantity consumed (i.e.,
MWhs) and reported in scope 2 serves as the basis for determining T&D activity data.
Section 4.2 of the Scope 2 Guidance on the emission-rate approach says that scope 2
accounting methods use generation-only emission factors, which do not include T&D losses or
upstream lifecycle emissions associated with the technology of fuel used in generation.
Appendix B of the Scope 2 Guidance states that organizations should disclose which calculation
method (i.e., market- or location-based) they are using to calculate and report T&D losses inscope 3 category 3, but do not need to “dual report” this total. For instance, if organizations,
their suppliers, or other value chain partners have purchased energy attribute certificates tocover the quantity of grid losses, they can report this calculation based on the market-based
method procedures in this Guidance. If not, organizations should use the appropriate locationbased method emission factors.

Feedback on reporting T&D losses
Comments from stakeholders predominately focused on the need for clarification around how todesignate and report T&D line losses for the electric industry and whether it should be reported
as part of scope 2 or scope 3 for end-use reporters.
Respondents suggested that more detailed guidance should be provided for the various parts of
T&D systems to explain how losses should be accounted for and where they should be reported
depending on the operational and organizational control models. Cited examples included (notexhaustive):Provide greater clarification on how to address line losses for different types of powercompanies, including vertically integrated utilities, transmission and distribution
companies (i.e., “wires only” companies), investor-owned utilities (IOUs), independent
power providers (IPPs), municipal and public power utilities, electric power generation
owner/operators, transmission and distribution cooperatives, etc.
Develop utility-specific accounting rules, including for T&D losses depending onownership/control over distribution infrastructure.
Develop supplemental guidance that details losses from high voltage transmission versus
low voltage local distribution, and what is or is not included in the end-user scope 2
emission rates.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

F.4. Residual mix data
The Scope 2 Guidance defines the residual mix as the mix of energy generation resources andassociated attributes such as GHG emissions in a defined geographic boundary left after
contractual instruments have been claimed, retired, or canceled. The residual mix provides theappropriate emission factor for organizations’ use when calculating their market-based scope 2
emissions when they are without contractual instruments or a supplier-specific emission rate.
As presented in section B of this report, many respondents suggested that more ubiquitous useof residual mix data would lead to more accurate allocation of emissions to market participants
and therefore more accurate application of the market-based method.
However, many respondents noted that residual mix data is not available in many regions of theworld, and there are challenges in obtaining it particularly outside of the EU or areas without
all-attribute energy attribute tracking systems. Some respondents said that in certain instances
partial residual grid mix data can be obtained; however, its accuracy is challenging to ensure
due to the confidential, bilateral nature of some energy market transactions and incompletenessof utility data reporting for all the locations in which customers consume electricity.
Survey feedback included suggestions that the GHG Protocol could play a role by supporting thedevelopment of a residual grid mix database globally which could be utilized by organizations
for their scope 2 market-based reporting. Respondents also suggested that the GHG Protocol
should develop new or endorse existing guidelines on a default approach for calculating residual
grid mix data in the absence of utility provided emission factors. There were also suggestions toremove the use of grid average emission factors from the residual mix hierarchy as they can
include a significant volume of generation attributes already claimed by both voluntary andregulatory programs. Alternatives such as using thermal or combustion generation only
emission rates were suggested based on the rationale that few, if any, organizations voluntarily
purchase EACs associated with emission-producing generation technologies.

F.5. Other topics raised by respondents
Market-based accounting for biogas/biomethane
Some stakeholders offered feedback related to the use of market-based instruments for biogas,
biomethane, renewable natural gas (RNG), “recycled fuels”, etc. This topic was addressed by
the Market-based Accounting Approaches Survey which was out for consultation at the sametime as the Scope 2 Survey. This issue will be considered holistically with other proposals formarket-based mechanisms across sectors and scopes to determine their appropriate use in GHG
accounting, reporting and/or target setting. To receive future updates, please sign up for GHG
Protocol’s newsletter.

Guidance on accounting for round trip efficiency in energy storage
Survey feedback included requests for establishing clear scope 2 guidance and reporting
requirements for energy storage systems (ESS), including battery storage, pumped hydro, EVgrid integration, etc., and specifically how to account for the differences between energy input
and output from energy storage systems and round-trip efficiency losses.
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
A suggested approach offered by some respondents was to report scope 2 emissions based on
the net electricity consumption, which is the difference between the energy purchased from thegrid and the electricity returned to the grid by an energy storage system. This approach would
be similar to how transmission and distribution losses are accounted for in scope 3. To calculate
the scope 2 emissions for the energy storage system, the organization would determine thetotal gross imported energy, total exported energy, and then calculate the "net imported
energy" to account for round-trip efficiency losses and internal consumption. The emissions
associated with this net imported energy would be considered the scope 2 emissions for theenergy storage system. Rationale for this approach highlighted that scope 2 is an indirectemission category that includes GHG emissions from the generation of purchased or acquired
electricity, steam, heat, or cooling consumed by the reporting organization.

Accounting for on-site/behind the meter electricity projects
Section 6.4.1 of the Scope 2 Guidance says that companies who are consuming energy directlyfrom a generation facility (e.g., an on-site solar PV system located on the reportingorganization’s rooftop that is interconnected behind the utility meter) that has sold the energy
attribute certificates forfeit not only the right to claim those emission benefits in the marketbased method (requiring the use of some other market-based method data source such asother “replacement” certificates, a supplier specific emission factor, or residual mix) but also theright to claim that emissions profile in the location-based method. Table 6.1 in the Scope 2
Guidance provides more details on accounting for scope 2 with and without certificate sales.
Some respondents indicated a need for further clarification or potential revisions on the need toown and retire EACs related to on-site projects to make claims to the zero-carbon generation in
the location-based method. Reasons supporting these considerations noted that the current
methodology requirements that retaining ownership of the energy attribute certificates isrequired for under location-based accounting is not consistent with the idea of location andmarket-based dual reporting. These comments stated that tracking, ownership, or retirement of
attributes should not be applicable under location-based accounting for the method to beinternally consistent.

Accounting for small scale off-grid installations in emerging markets
Some respondents called for additional guidance for accounting of the purchase and sale ofenergy associated with “off-grid” energy generating installations. These comments highlighted
that in certain markets where there is a lack of larger, regional electrical grid infrastructure
unique challenges may exist. Respondents drew attention to the need for specific requirements
for these circumstances in the Scope 2 standard to address these situations.

Electric vehicles
Some respondents indicated a need to develop specific guidance covering scenarios for EV
charging. This includes answering questions regarding which scope (i.e., scope 2 or 3) the
electricity used in EV charging should be reported depending on different operational andorganizational boundaries. The following examples reflect some of the different scenarios
survey respondents identified as needing further clarification:
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
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





EV charger hosted on reporting organizations property and is owned by an external
supplier and independently metered. The external supplier has its own contract withthe electricity provider. Customers charging their EV pay for electricity usage toexternal supplier.
EV charger hosted on reporting organizations property and is owned by an external
supplier but behind the same meter as the reporting organization. The reportingorganization charges the external supplier for electricity usage associated with the
EV chargers. Customers pay for electricity usage to external supplier.
EV charger is owned by the reporting organization who also has a direct contract
with electricity provider. Customers pay for electricity usage to the reportingorganization.
EV charger is owned by the reporting organization who also has a direct contract
with electricity provider. Customers charge for free without any payments forelectricity usage to the reporting organization.

Biogenic emissions
Some respondents indicated that additional guidance is necessary on if and how biogenic
emissions from purchased energy should be reported including how different greenhousegasses produced during combustion are reported. Some pointed to SBTi’s requirement to report
forest, land, and agriculture (FLAG) emissions. Some also pointed out that its necessary to
clarify that for the location-based method, biogenic emissions are sometimes included in grid
average emission factor data. There are multiple ways biogenic emissions can be reported andconsistency as appropriate across GHG Protocol reporting standards is necessary. Further
evaluation of reporting biogenic emissions will be evaluated holistically across all GHG Protocol
Standards and Guidance.

G. Feedback on alignment with policy and regulatory GHG
disclosure programs
Many respondents noted a need to support harmonization across the various regulatory andprogrammatic GHG accounting and reporting landscapes to minimize confusion, simplify
requirements, and reduce the time and resources required to comply with the multitude ofcurrent and forthcoming rules.

G.1. Mandatory corporate GHG disclosure
Respondents noted that the practice of disclosing an inventory of an organization’s value chain
GHG emissions is quickly transitioning from a voluntary activity to a regulated requirement. New
and updated corporate GHG disclosure policies are under development in the EU, US, United
Kingdom (UK), and other jurisdictions, and will require firms to submit emission disclosure
reports to government regulators. Planned disclosure requirements in both the US (Securities
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
and Exchange Commission proposed Climate Disclosure rule) and the EU (Corporate
Sustainability Reporting Directive), as well as the IFRS’s ISSB framework, references the GHG
Protocol as the foundation for implementation guidance.
Some respondents stated that the transition to mandatory GHG disclosure for regulatory
purposes creates the need for a consistent and common method for accounting for an
organization’s emissions. These responses were concerned that if different reporting methods
emerge it could generate unnecessary friction for corporate emissions inventory reporting, add
new workloads to corporate sustainability teams, and possibly foment skepticism about
emissions reporting and data. The was also a sentiment that as the de facto standard forinventory reporting, the GHG Protocol should work with government regulators to ensure
consistency across emerging reporting frameworks that will be included in these new
regulations.
Respondents also urged the GHG Protocol to engage with policymakers and other standardsetting bodies to ensure that GHG accounting standards are fit for purpose in the context of
new regulation. Feedback on this topic observed that the GHG Protocol needs to balance
supporting both voluntary GHG inventory reporting and action but also regulatory disclosure
requirements, and thus the importance of engagement with policymakers as stakeholders in the
GHG Protocol revision process.

G.2. Market-based accounting: Overlap of voluntary EAC claims andcompliance schemes
The current Scope 2 Guidance does not require contractual instruments claimed in scope 2 tobe “in addition to,” or independent from, regulatory policies such as subsidies, tax exemptions,or supplier quotas. Due to the design of renewable energy production targets in some regions,achieving “regulatory surplus” with voluntary purchases may not always be possible. For
transparency and stakeholder understanding of voluntary purchases, the Scope 2 Guidance
encourages that organizations disclose the relationships between instruments claimed in scope
2 and regulatory policies as part of the disclosure of overall instrument features. Organizations
should also disclose retirement of additional certificates or other instruments performed inconjunction with their voluntary claims (See Scope 2 Guidance, section 8.2, “Reporting on therelationship between voluntary purchases and regulatory policies ” for additional details).
Responses to the Scope 2 Survey highlighted the importance of section 8 and provided several
points for consideration around additional clarifications, including (not exhaustive):Addressing inconsistency across jurisdictions with varying levels of voluntaryprocurement options, recognizing some markets currently have limited or no options
available.
Providing updated guidance on an organization’s ability to make market-based claims
associated with renewable power supplied under regulatory compliance schemes,particularly if the energy supplier also makes claims regarding the same renewable
power.
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023


Establishing clear requirements under which the usage of both “compliance” and“voluntary” credits can be reported, and guidance on how to communicate the emissions
impacts.

G.3. Learnings from low-carbon hydrogen regulations
Survey responses included reference to the incentive programs for clean hydrogen, andspecifically the growing body of research published in support demonstrating compliance withthe low embodied emission requirements for grid-connected electrolysis production pathways.
These included the recently finalized European Commission’s delegated regulation on Union
methodology for RFNBOs and the pending 45V Production Tax Credit laid out in the US’s
Inflation Reduction Act. The programs’ significant financial incentives and/or compliancerequirements, intended to expand a supply chain for low embodied emission hydrogen, havespurred academic research and discussion across industries and regulators around technicalimplementation of the plans. Survey responses identified that there is potentially significant
overlap between the intention of these hydrogen production incentives and the GHG Protocol
Scope 2 Guidance when it comes to claiming the usage and any corresponding emission
impacts of consuming carbon-free electricity. However, responses also identified there may bedifferences between the specific modeling scenarios for unique regulatory frameworks, andscope 2 reporting, since the modelling is used to evaluate life cycle emissions from electrolysisbased hydrogen production, and scope 2 reporting is intended to be a globally applicable
methodology to calculate and report value chain emission inventories.
Low-carbon hydrogen regulations in Europe have already been published, and the US 45V
requirements are anticipated to be finalized soon. Technical criteria for implementation of the
EU rules include requirements around additionality, temporal matching of electricity
consumption to hydrogen production using a monthly vintage until 2029, and on an hourly basis
starting in 2030, and deliverability of power between generation and load defined by the samebidding zone.
Some respondents to the Scope 2 Survey indicated that the GHG Protocol should follow similar
criteria laid out in the implementation plans for hydrogen by adopting granular accounting
methodologies such as those in the European hydrogen rules and several other policy mandates
listed below. Some suggested that by diverging from the granular market-based accounting
approaches being adopted by compliance programs, the GHG Protocol could risk its relevance.
Please see section C for feedback regarding similarly granular scope 2 requirements.
Policies mandating granular accounting as cited by respondents included (not exhaustive):EU Delegated Act on detailed rules for the production of RFNBO Hydrogen requiring 1hour period correlation between production and consumption and deliverability
requirements of electricity starting in 2030
US Presidential Executive Order 14057 for the US government to source 50% hourly CFE
by 2030
UK RTFO Guidance for Renewable Fuels of Non-Biological Origin requiring 30-minutetemporal correlation between electricity generation and consumption
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

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H.

UK Low Carbon Hydrogen Standard requiring 30-minute temporal correlation between
electricity generation and consumption for low carbon hydrogen generation
France VertVolt Standard requiring half-hourly matching between the customer supply
and consumption
Ireland 2023 Climate Action Plan requiring “time stamped” Guarantees of Origin; clean
energy claims must be made for the same hour and geographical location as production
Germany Ammonia Import Tender requiring that production of hydrogen is matched onan hourly basis with renewable energy generation under a PPA

Feedback on clarifications needed across scopes

H.1. Reporting indirect emissions in scope 2 and scope 3 category 3
Current requirements on scope 3 category 3
The Corporate Value Chain (Scope 3) Standard defines scope 3 category 3 as emissions related
to the production of fuels and energy purchased and consumed by the reporting organization in
the reporting year that are not included in scope 1 or 2.
Category 3 excludes emissions from the combustion of fuels or electricity consumed by thereporting organization, since they are already included in scope 1 or 2. Scope 1 includes
emissions from the combustion of fuels by sources owned or controlled by the reportingorganization. Scope 2 includes emissions from the combustion of fuels to generate electricity,
steam, heating, and cooling purchased and consumed by the reporting organization ( Scope 3
Standard, section 5.5, page 41).
Category 3 includes four activities: a) upstream emissions from purchased fuels, b) upstream
emissions from purchased electricity, c) T&D losses, and d) generation of purchased electricity
that is sold to end users. Table 5.5 on page 41 of the Scope 3 Standard details these activities
and their applicability to reporting entities.
The Scope 2 Guidance impacts how an organization assesses its scope 3 category 3 emissions.
The Scope 2 Guidance states that a reporting organization shall disclose whether a marketbased or location-based scope 2 total is used as the basis for calculating scope 3 category 3(Scope 2 Guidance, section 1.10, page 10).
Emission factors used in scope 2 represent generation-only emission factors (e.g., emissions
assessed at the point of energy generation) (see Scope 2 Guidance, section 4.2, page 27),
whereas scope 3 category 3 uses life cycle emission factors that exclude emissions fromcombustion (see Scope 3 Calculation Guidance, page 41).

Feedback on reporting in scope 2 or scope 3 category 3
Some respondents suggested a need to clarify the relationship between accounting foremissions in scope 2 or scope 3 category 3 and reasons for separation between the reporting
categories. These responses provided examples including that upstream emissions caused by53

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
hydrogen production can vary substantially depending on how it is produced, yet direct
combustion of hydrogen as a fuel produces minimal GHG emissions. While the direct emissions
in from hydrogen would be near-zero, to demonstrate the GHG Protocol principle of“completeness” and to comply with the Scope 3 Standard, companies must report the upstream
emissions from hydrogen in their scope 3 category 3 inventory, though currently neither the
Corporate Standard nor the Scope 2 Guidance requires the organization to do so. Respondents
called attention to additional technologies, such as large-scale impoundment reservoir
hydropower and other emerging technologies that face similar questions regarding upstream
and fugitive emissions.
Several respondents also pointed out that while the Scope 2 Guidance allows companies tochoose whether they use a location-based or market-based scope 2 total to determine theirscope 3 category 3 emissions, there is a need for more specificity in whether companies should
use one or the other. Some respondents pointed to a concern that allowing the market-based
method as a basis for scope 3 category 3 means that organizations could claim zero scope 3
category 3 total when also claiming a zero scope 2 total, though there are still inherent indirect
life cycle emissions that should be accounted for.

H.2. Leased assets
Current requirements on reporting emissions from leased assets
The organizational boundaries set by the reporting entity, which are described in Chapter 3 of
the Corporate Standard, determined how leased assets should be treated by a reporting entity.
The Scope 2 Guidance details leased assets in section 5.2.1, and refers to the Corporate
Standard Appendix F, which notes that all leases confer operational control to the lessee or
tenants, unless otherwise noted. Therefore, if an organization is a tenant in a leased space orusing a leased asset and applies the operational control approach, any energy purchased or
acquired from another entity (or the grid) shall be reported in scope 2. On-site heat generationequipment, such as a basement boiler, typically falls under the operational control of thelandlord or the building management organization. Tenants therefore would report consumptionof heat generated on-site as scope 2. If a tenant can demonstrate that they do not exercise
operational control in their lease, they shall document and justify the exclusion of theseemissions.
Emissions from assets an organization owns and leases to another entity, but does not operate,
can be included in scope 3 or excluded from the inventory.

Feedback on reporting emissions from leased assets
Note that this topic will be addressed through the Corporate Standard update process, which
will cover organizational boundaries more holistically. This process is set to kick off in the
coming months. For more information, please sign up for GHG Protocol’s newsletter.
Issues with double counting emissions responsibility: Some respondents cited that,
often, two companies (the lessee and lessor) will claim the same space under their scope 2
reporting boundary or conversely, both will claim it in their scope 3 reporting boundary. In the54

Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
case where it is in both organizations’ scope 2 boundary, there is potential to over-purchaserenewable energy for the same space. In the case where it is in both of their scope 3 reporting
boundaries, there is potential for it to be ignored and remain unaddressed. Respondentssuggested a need for additional guidance on to how to account for and allocate emissions insituations where landlords purchase electricity, steam, heat and cooling on behalf of theirtenants to ensure double counting is prevented.
Reporting purchased heating in scope 1 versus scope 2: In many instances, natural gas
or fuel oil is used for heating in leased spaces. Some respondents cited that, currently, somecompanies place the associated emissions in scope 1, and some place them in scope 2.
Respondents noted it is unclear if the Scope 2 Guidance establishes a preference for the latteras being more appropriate and observed that in practice organizations often still place theseemissions in scope 1 on the basis that they have control over the heating in the space and pay
for the heating bill, and thus should report as any other combusted fuel. Respondents notedthat more prescriptive details on this point could improve the comparability of inventories.

H.3. Addressing electricity use in value chain through a market-based
methodCurrently, market-based accounting is not allowed in scope 3, apart from scope 3 category 3
T&D losses (see section F.3. of this report).
Some organizations have cited interest in purchasing renewable electricity attribute certificateson behalf of and for the benefit of a value chain partner, such as a supplier or customer, to help
reduce the value chain partner’s scope 2 emissions and thus the reporting organization’s scope
3 emissions. Many organizations cited that the GHG Protocol should adopt and build upon the
US EPA’s 2022 guidance, Renewable Electricity Procurement on Behalf of Others: A Corporate
Reporting Guide.
These responses suggested that within a reporting organization’s scope 3 inventory, the GHG
protocol should also allow organizations to directly claim or use EACs on behalf of their value
chain partners regardless of any actions taken by the value chain partners to procure renewable
or low-carbon electricity. These respondents tended to suggest that any market-based
measures taken on behalf of value chain partners should also be subject to the same technicalrules (e.g., quality criteria for market boundaries, vintage, etc.) set in any forthcoming updates.
Proponents of this strategy argued that value chain partners are often located in emerging
markets, which desperately need investment in renewable generation projects, and thatallowing organizations to retire EACs on behalf of their supply chain partners would be apractical solution for organization to leverage now to incentivize renewable electricity projects inthese emerging markets.
Note that this topic will be also be addressed through the Scope 3 Standard and Market-BasedAccounting Approaches update processes, which will cover market-based accounting acrossscopes more holistically. This process is set to kick off in the coming months. For more
information, please sign up for GHG Protocol’s newsletter.
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

I.

Feedback on additional reporting metrics

The current list of required information for scope 2, as well as recommended disclosure andoptional information, can be found in Chapter 7 of the Scope 2 Guidance.
Some respondents of the Scope 2 Survey indicated that additional reporting metrics should be
added to the list of requirements laid out by the Scope 2 Guidance. Some examples ofadditional metrics cited included (not exhaustive):
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Carbon-Free Electricity (CFE) Score: a “CFE Score” would estimate what shareof a buyer’s consumption of electricity is matched with generation from clean energy
resources, demonstrated by CFE purchases. This number could be calculated on anannual and/or hourly basis and would include a baseline CFE score for different
utility service areas considering mandatory CFE purchase requirements (e.g., US
state RPS requirements, state-mandated nuclear life extensions, “rate base”
generation, etc.).
Weighted Average Hourly CFE Score: indicates the percentage of each hour’s
consumption that is matched with carbon-free generation across a selected period.
Each hour’s score should be capped at 100%. For example, if there is a solar
contract, it cannot apply excess daytime generation to cover deficient nighttime
hours and ‘boost’ the hourly match score.
Minimum CFE Score: indicates the single lowest hour’s CFE match percentage
across a selected time period. This metric reveals the hourly reliability that only
certain generation types (nuclear, hydropower, geothermal, storage) excel atproviding. For example, one could achieve a relatively high average hourly matchscore by combining wind and solar (for example, 60-80% on average), but the single
hour minimum across a given time period is bound to be much lower, or even zero,
if you don’t include some dispatchable or firm CFE in the mix.
Policy Advocacy Alignment: indicates an organization’s efforts (from a qualitativeor quantitative perspective) to advocate for clean energy and climate policies atnational and sub-national levels. Requires organizations to disclose whether theirpolitical influence efforts are aligned with policies that aim to decarbonize theelectricity system, for example, implementation of a federal clean energy standard or
any policies that would increase a state renewable portfolio percentage.
Additionality: See section D.
Emission impacts: See section E.
Social and community co-benefits: indicates the social and community cobenefits associated with purchased and retired market-based instruments
Sustainable Development Goal (SDG) Impact: indicates actions in alignment
with United Nation SDGs. Similar to reporting metrics on social and community cobenefits, examples here related to the energy access provided in emerging markets.

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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023

Log of Changes to Draft Summary Report – October 2023
Between July 26th and September 8th, 2023, GHG Protocol offered an opportunity forstakeholders who submitted responses to the Scope 2 Guidance Survey to provide feedback on
the draft Scope 2 Survey Summary Report to ensure that perspectives were comprehensively
and accurately represented. Fewer than 5% of survey respondents requested revisions to theoriginally published draft summary report. The log of changes made from the draft summary
report is below.
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In the Executive Summary, the bullet on “Requiring or encouraging granular time andlocation criteria” was edited for clarity that some responses suggested granular data andquality criteria should be encouraged, while others thought it should be required.
In the Executive Summary, text was added to the bullet on “Allowing flexibility in timeand location criteria” to clarify feedback that such flexibility allows purchases of claims
that are physically disconnected to underlying electricity consumption.
In the Executive Summary, the section on “Next Steps” was edited to include the most
up-to-date information on next steps within the GHG Protocol Scope 2 Guidance
standard update process as of early November 2023.
Section A.3 was revised to include specific mention of several regions.
Section B.5 was revised to clarify respondents’ positions on location-based emissions
allocation.
Section B.5 was revised for clarity on points related to the legal basis for EACs.
Section C.2 additional context was added on respondents’ calls for specific guidance on
where to source certain emission factors for use in location-based and market-based
calculations, including what to do in the case of missing information.
Mentions of “empirical research” or “empirical evidence” were modified in some cases toremove the word “empirical” for clarity.
Section C.3 clarification was added that some responses suggested granular data,
emission factors, and quality criteria should be encouraged, while others thought itshould be required.
Section C.4 clarification was added that some responses suggested granular data,
emission factors, and quality criteria should be encouraged, while others thought itshould be required.
Section C.4 was revised to clarify feedback on the accessibility of hourly consumption
data.
Section C.6 ‘Technology Eligibility’ was updated to include feedback on the need for allattribute tracking systems to support complete GHG reporting.
Section C.6 Table 6.3 ‘Market-based scope 2 data hierarchy examples’ was added fromthe Scope 2 Guidance. A reference to Section 6.6 in the Scope 2 Guidance was also
added for background context on the feedback received.
Section D.2 ‘Feedback to keep additionality requirements outside of scope 2’ wasamended to clarify that some but not all responses that favored the separation of claims
on usage and impact also suggested requiring a modified market-based method with
granular time and location matching criteria as well as separate reporting requirements
around project- or intervention-based accounting.
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Detailed Summary of Survey Responses on Scope 2 Guidance, November 2023
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Section D.2 sub-header ‘Feedback supporting introducing additionality requirements inusage claims scope 2’ was revised for clarity around usage claims.
Section F.1 ‘General feedback on accounting for purchased steam, heat and cooling’ wasedited for clarity on the feedback around accounting needs for emerging technologies.
Section F.2 discussion on waste-to-energy was edited for additional clarity on acronyms.
Additional clarity was provided based on survey feedback regarding potential objectives
for revising accounting practices for WTE to shift the emission reporting burden from theconsumer of the purchased energy to the producer of the waste, and also current
practices counteract with legislation and other disclosure rules in the EU.
Section F.5 ‘Market-based accounting for biogas/biomethane’ was edited for additional
clarity on examples of emerging technologies that require new guidance.
Section F.5 updated with ‘Accounting for small scale off-grid installations in emerging
markets’ to more clearly reflect feedback on the need for guidance on off-grid energy
generating installations in regions that lack well-developed electrical grid infrastructure.
Section F.5 ‘Biogenic emissions’ was updated to clarify feedback on the need for
additional guidance and the GHG Protocol’s plan to evaluate biogenic emissions
holistically across all GHG Protocol Standards and Guidance.
Section G.3 ‘Learnings from low-carbon hydrogen regulations’ was modified to clarify
that the EU Delegated Act on detailed rules for the production of RFNBO hydrogen
includes a deliverability requirement.
Section G.3 ‘Learnings from low-carbon hydrogen regulations’ reference to Australia
Renewable Energy Indicator/NABERS was removed due to relevance.
Section H.1 ‘Feedback on reporting in scope 2 or scope 3 category 3’ was updated forclarity on specific technology types or use cases that require new guidance on reporting
emissions between scope 2 and scope 3.
Section H.3 ‘Addressing electricity use in value chain through a market-based method’
was revised to add clarity on feedback around claiming or using EACs on behalf of value
chain partners regardless of any actions taken by the value chain partners to procure
renewable electricity.

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