The Proposed Changes to Scope 2 of the GHG Protocol

What Scope 2 Is and Why It Matters

Under the Greenhouse Gas (GHG) Protocol, corporate emissions are grouped into three scopes. Scope 2 covers indirect greenhouse gas emissions from the generation of purchased electricity, steam, heat or cooling that a company consumes.

In simple terms, these are the emissions that occur when energy is produced elsewhere but used by the reporting organisation. For most businesses, electricity is the main component of Scope 2 and often represents a significant part of their total carbon footprint.

The GHG Protocol currently requires companies to report Scope 2 emissions using two complementary methods:

• Location-based method – reflecting the average emissions intensity of the grid where consumption occurs.

• Market-based method – reflecting the emissions associated with the specific electricity the company has purchased, such as through renewable energy contracts or certificates.

Both approaches provide valuable insights, but they have also led to inconsistencies in reporting and confusion over the credibility of renewable energy claims. As energy markets evolve and data becomes more granular, the need to update Scope 2 accounting has become clear.

.

Why a Revision Is Underway

The GHG Protocol’s Scope 2 Guidance was last updated in 2015. Over the past decade, several developments have highlighted the need for change:

• Evolving disclosure regulations around the world now demand more precision and alignment between frameworks.

• Growth in renewable procurement has exposed gaps in how contractual instruments such as Power Purchase Agreements (PPAs) and Energy Attribute Certificates (EACs) are accounted for.

• Advances in data availability now make it possible to use time- and region-specific emission factors rather than broad annual averages.

• Investor and stakeholder expectations are driving demand for greater transparency, accuracy, and comparability between corporate reports.

These pressures have led the GHG Protocol to begin a formal revision process for Scope 2, aiming to modernise how electricity-related emissions are measured and reported.

.

The Key Proposed Changes

1. Strengthening Both Accounting Methods

The revision seeks to improve both the location-based and market-based approaches.
For the location-based method, emission factors will be refined and made more region-specific.
For the market-based method, companies may be required to meet stricter criteria around temporal matching (aligning consumption with renewable generation on an hourly basis) and geographical matching (ensuring certificates or PPAs originate from the same region where electricity is consumed).

A new hierarchy of emission factors is also being proposed to encourage the use of the most accurate data available, with fallback options only when higher-quality data cannot be obtained.

2. Considering System-Wide Impacts

Discussions are ongoing about whether companies should report an additional “impact-based” figure that reflects the broader system benefits of renewable energy procurement or demand-side flexibility. While this will likely sit outside the main inventory total, it would help capture how corporate energy actions contribute to grid decarbonisation beyond simply reducing a company’s own reported emissions.

3. Phased Implementation

Recognising that businesses and utilities will need time to adapt, the new Scope 2 requirements are expected to be phased in gradually. Some advanced features, such as hourly matching, may initially apply only to companies making renewable energy claims, with several years allowed before full adoption.

.

Timeline for Consultation and Implementation

The revision process began with stakeholder engagement in late 2022. Technical working groups have been developing proposals through 2024 and 2025.

• Mid-2025: The Independent Standards Board approved the draft revisions for public consultation.

• Late 2025: The public consultation period is expected to open.

• Mid-2026: The first phase of revisions is expected to be finalised.

• End of 2027: Publication of the fully revised Scope 2 standard, followed by a transition period before mandatory adoption.

This gives businesses approximately two years to prepare for the forthcoming changes.

.

Implications for Businesses

For organisations reporting their carbon footprint — or preparing to do so — the upcoming revisions mean now is the time to review Scope 2 data and systems. Key actions include:

• Assess data readiness: Evaluate whether electricity data is granular enough (e.g., hourly or regional detail) to meet future reporting requirements.

• Review renewable contracts: Ensure that PPAs or certificates meet emerging integrity standards for region and time matching.

• Plan for transition: Develop a roadmap for compliance ahead of the implementation date.

• Update targets and claims: Review how renewable energy and “zero-carbon electricity” claims are communicated to ensure alignment with future definitions.

• Engage suppliers: Coordinate with energy providers and data services to understand how they will support compliance with the new guidance.

.

Conclusion

The forthcoming changes to the GHG Protocol’s Scope 2 Guidance represent one of the most significant updates to corporate carbon reporting in a decade. The goal is to enhance accuracy, comparability, and transparency — reflecting the increasing sophistication of electricity markets and the growing demand for credible renewable energy claims.

For businesses, the revision period is both a challenge and an opportunity. By preparing early, improving data systems, and aligning procurement strategies, companies can ensure compliance and demonstrate leadership in the transition to a low-carbon energy future.

At Bryce Energy Services, we’ll be closely following the consultation process and advising our clients on how to adapt to the new requirements as they develop.

.

While You Are Here…

Why not use one or all of Bryce Energy Services free online calculators.

Carbon Footprint — Solar Panels — Electric Chargers — ISO 50001 Gap Analysis

Or demonstrate your business is environmentally and socially responsible, with the CSR Accreditation.

Try our ‘new’ New Vehicle Carbon Footprint Calculator now.