GHG Protocol Scope 2 in Transition

Disha Veera
11 minutes ago
7 min read

Why Scope 2 Is Being Rewritten?
In 2015, GHG Protocol introduced the Scope 2 rules companies still use today. These rules allow two ways to report emissions from purchased electricity: the location-based method and the market-based method. Ten years on, GHG Protocol is now running its biggest review of these rules yet.

Between October and January 2026, GHG Protocol asked the public for feedback in two separate consultations. One covered proposed changes to Scope 2 accounting. The other, narrower one covered how to account for the wider, system-level impact of clean energy actions. Together, they drew almost 1,100 responses from 56 countries. GHG Protocol published a summary of this feedback on 29 July 2026.

Two new ideas sit at the centre of the proposed changes: Hourly Matching and Deliverability. Both aim to close a trust gap in current reporting. Today, a company can claim 100% renewable electricity for the year, even if the actual power it drew from the grid at 9pm on a winter night came mostly from coal or gas. The new rules try to close that gap.
The Two Proposals, Explained Simply

Hourly Matching (Quality Criteria 4)
Today, a renewable energy certificate only needs to match a company's consumption “as closely as possible.” In practice, this usually means the renewable energy was generated in the same calendar year, and anywhere in a broad market. The new proposal would tighten this. Companies above a certain size (yet to be defined) would need to match certificates to the specific hour their electricity was used, not just the year.

What does “matching time” mean?

Hourly Matching is about timing, not just volume. Right now, a company can buy solar energy certificates for the whole year and use them to cover electricity used at any hour, including at night when solar panels produce nothing.

Under the new rule, the certificate must match the hour the electricity was actually used. Solar power generated at noon can only offset consumption at noon, unless it was stored in a battery and released later.

In short: Clean energy must be available at the same time the company is actually drawing power, not just sometime during the same year.

GHG Protocol has proposed measures to ease this transition. These include a set list of load profiles for companies that lack detailed hourly data, exemptions based on company size or electricity use, a possible clause to protect existing long-term contracts, and a phased rollout. The final Standard is expected in late 2027, with effective dates staggered over several years after that.

Deliverability (Quality Criteria 5)

The second proposal requires that certificates come from power plants that can physically send electricity to the reporting company. This is called a “deliverable market boundary.” Today, companies can typically source certificates from anywhere in a national or multi-country market, regardless of the physical grid connection.

What does “geographical deliverability” mean?

Deliverability is about physical distance and grid connection, not just paperwork. A certificate can currently come from a solar farm hundreds of kilometres away, even if there is no transmission line connecting that farm to the company's actual load.

The new rule would require proof that the power can actually reach the company. GHG Protocol proposes three ways to show this: (1) sourcing from within the same connected grid area; (2) showing spare transmission capacity between two neighbouring areas; or (3) a contract that proves physical delivery from the generator to the consumer.

One further change: electricity delivered through regulated public schemes, such as India's Renewable Purchase Obligation-linked supply, would be capped. A company could only claim its fair, proportional share, so large buyers cannot claim more than their part of shared public clean power.

Both proposals apply only to certificate-backed, market-based claims. Residual mix reporting, and Standard Supply Service for exempted companies, would continue to use annual or monthly matching as before.

Feedback: What the Market Actually Said?
GHG Protocol's July 2026 feedback summary gives a clear view of how the market responded.

12%

of companies support Hourly Matching

19%

of companies support Deliverability

1,100

responses from 56 countries

Even after including all types of respondents (companies made up 44% of responses, alongside industry groups, consultants, NGOs, and utilities) support stayed low. Only 22% of all organisations supported Hourly Matching, and 30% supported Deliverability. Among companies alone, 82% showed low or no support for Hourly Matching, and 71% felt the same about Deliverability.

Why respondents pushed back?

• Hourly Matching: 87% feared it would discourage participation in voluntary clean energy markets worldwide. 86% pointed to cost and administrative burden. 84% wanted the rule to be optional (“may”) rather than mandatory (“shall”).

• Deliverability: 87% felt that narrower market boundaries would reduce investment in regions where renewable projects could cut the most emissions. 72% expected companies to shift away from long-term power contracts toward short-term, spot-market purchases.

• On a related proposal for the location-based method, only 40% of all respondents were supportive, and just 28% of companies. Most cited administrative burden and conflict with existing mandatory rules such as CSRD/ESRS, UK SECR, and Australia's NGERs.

Why supporters backed the changes?

Not all feedback was negative. Supporters of Hourly Matching largely saw it as a necessary fix, preventing companies from claiming clean power at hours when none was physically available. Supporters of Deliverability made a similar point: certificates from grids with no physical link to a company's operations weaken the accuracy of its reported emissions. Grid operators, including ENTSO-E and the UK's National Energy System Operator, also backed hourly, deliverable matching, arguing it sends the right price signals toward storage, demand response, and other technologies needed to fully decarbonise the grid.

In response, GHG Protocol confirmed it will revise the draft with its Technical Working Group and Independent Standards Board. It will also explore offering multiple reporting approaches to suit different needs. This suggests a single, mandatory rule for everyone is no longer the likely outcome. A tiered approach - mandatory for large emitters, optional or phased for others - now looks more probable.

Accounting for Wider Climate Impact (the AMI Draft) – Multi Statement Reporting
Alongside the Scope 2 consultation, GHG Protocol also asked for input on a separate question: how to account for the wider, system-level impact of a clean energy action, outside of a company's own emissions inventory. This work sits with the Actions and Market Instruments (AMI) Technical Working Group, and it marks a structural shift in how corporate climate claims will be organised.

There are two distinct ways to account for emissions. Inventory accounting (Scopes 1, 2, and 3) measures emissions strictly within a company's own operational boundaries; this is what the revised Scope 2 Standard governs. Project or consequential accounting instead estimates the wider, system-level impact of an action, compared to what would have happened otherwise. For example, this could mean the emissions avoided because a company's investment brought new renewable capacity onto a grid that would not otherwise have been built. GHG Protocol has stated that mixing these two approaches within Scope 2 would make the resulting information less useful, and would create conflict with mandatory frameworks such as ISSB, EFRAG, and CARB.

In practice, this means that if a company's clean energy purchase falls outside the new deliverable market boundary - for example, an Indian company financing a solar project with no transmission link to its own load - the resulting certificates could no longer count within Scope 2 at all. Instead, the AMI workstream is building a separate disclosure track for these investments, based on a “Marginal Impact Method.” This method nets a company's electricity use and its clean energy purchases into a single “net impact” figure, reported alongside the Scope 2 total, but never counted inside it.

This shift matters for corporates and funds pursuing high-impact renewable investments that fall outside the deliverable boundary - a common pattern in Indian voluntary procurement, given transmission constraints across regions. These investments do not lose their value. But the credit for them moves from the audited Scope 2 line to a separate impact disclosure (multi-statement disclosure), one whose rules on governance, assurance, and comparability are still being developed.

Esgity's Expert View

The scale of pushback in this consultation - 82% of companies rejecting Hourly Matching, 71% rejecting Deliverability - is unusually one-sided for a GHG Protocol process. This reflects a genuine tension, not simple resistance to accountability. GHG Protocol's core diagnosis is sound: loosely-matched certificates can and do let companies report 100% renewable claims for hours when no renewable power was actually reaching their load. The credibility of market-based Scope 2 reporting has already been questioned publicly, including by IFRS, which has excluded the market-based method from its own disclosure requirements. Tightening these rules is a reasonable response.

That said, the practical gap is real, not just reluctance. Our own client base shows this clearly: outside a handful of data-rich, liberalised markets, the hourly metering infrastructure needed simply does not exist at scale. The consultation data confirms this is a global constraint, not just an Indian one. Nearly half of respondents (46%) said they could not be ready before 2030, even under an optimistic reading of the proposal. Many called for phasing by region or sector, rather than one single global start date.

For our clients - Indian corporates, PE-backed portfolio companies, and impact investors, we recommend building three practical points into procurement and disclosure strategy now, well ahead of the final Standard expected in 2027:

· Physical, in-boundary power contracts, along with Open Access and Group Captive structures, will hold the strongest position under any final version of these rules, since deliverability concerns do not apply to them. This supports our existing guidance that physical delivery structures are the higher-quality choice compared with unbundled certificates or cross-region virtual power purchase agreements.

· Clients relying on certificates or virtual power agreements sourced outside their own grid region should begin planning for a narrower, sub-national deliverable boundary. They should also track (and we shall keep you updated!) whether a legacy clause or a single uniform effective date is adopted by GHG Protocol, since this will directly affect how long existing contracts remain valid.

· High-impact investments that fall outside the deliverable boundary should not be abandoned. Instead, their value should be reframed now. They are increasingly likely to be reported as a separate AMI or consequential impact metric, rather than as a Scope 2 reduction. This has implications for how they are marketed to investors and disclosed under SBTi or CDP.

We will continue to track the revised draft as it returns to the Technical Working Group and Independent Standards Board. We will issue an updated briefing once GHG Protocol confirms whether a tiered approach (mandatory for large emitters, optional for others) or a single-threshold approach is adopted, and once the AMI Technical Working Group publishes further detail on the Marginal Impact Method and its disclosure requirements.