In October 2025, the GHG Protocol launched two separate public consultations. One proposes updates to the Scope 2 Guidance (originally published in 2015). The other introduces a new “consequential” accounting method for estimating avoided emissions resulting from actions taken in the electricity sector.

Scope 2 accounting methods (particularly the market-based method) have come under increasing scrutiny for accuracy and comparability, particularly when emissions reductions from energy attribute certificates (EACs) are being claimed that are not temporally or geographically aligned with their consumption. These proposed updates aim to improve the accuracy and transparency of electricity-related emissions accounting, strengthen validation of clean energy claims, and support more complete disclosure of the impacts of a company’s electricity-sector choices. The GHG Protocol acknowledges feasibility constraints around aspects of these proposed changes and includes mechanisms to address those such as phased implementation, exemption criteria, and legacy clauses.

In the following sections, we’ll unpack some of the pertinent details.

Key Proposed Changes to Scope 2 Guidance

While the Scope 2 Guidance’s dual reporting structure of using both the location-based and the market-based methods will remain, both approaches are being refined significantly.

1. Location-based method updates

The revised guidance clarifies that emissions should reflect electricity generation physically delivered at the time and place of consumption, explicitly including imported electricity in location-based emission factor calculations.

A key change to the location-based method is a new emission factor hierarchy that prioritizes emission factors based on the following (listed in order of priority):

• Spatial precision (local over regional or national)

• Temporal granularity (hourly over monthly or annual)

• Emission factor type (consumption-based over production-based).

Production-based factors are calculated using an average of only the generating resources within a region. Consumption-based factors additionally account for imported and exported power between regions and therefore, better represent the actual mix of resources used to deliver power to consumers and are prioritized accordingly.

Reporters are instructed to use the most precise “accessible” emission factors available, which is defined as publicly available, free to use, and from a credible source.

If hourly emission factors exist but only annual activity data are available, companies may continue to use annual factors. Those seeking more temporal precision can optionally use load profiles (hourly consumption patterns for specific facility types) to convert annual activity data to hourly estimates.

2. Market-based method updates

The proposed updates to the market-based method introduce hourly matching requirements for contractual instruments, such as renewable energy certificates (RECs) or Guarantees of Origin (GOs). Contractual instruments would need to be issued and redeemed for the same hour as the electricity was consumed, unless an exemption applies. This emphasis on hourly matching of electricity consumption with the attributes of the contractual instrument aims to reduce the disconnect between claims and actual grid conditions.

To meet the hourly matching requirements, companies may use load profiles, which are hourly profiles of electricity usage or generation during a day and are commonly used by grid planners for estimating electricity demand. Under the proposal, companies can choose from a hierarchy of options including facility-specific, regulator-approved, time-of-use, or flat-average load profiles. Where hourly contractual instruments are not available, production load profiles may be combined with monthly or annual contractual instruments to estimate hourly data.

New “deliverability” criteria will require that electricity represented by a contractual instrument could realistically be delivered to the reporting entity’s grid region for consumption. This becomes pertinent in cases where grid operations or interconnections differ from national borders. There are proposed methodologies for demonstrating deliverability in the revised guidance.

Guidance is also being introduced to address treatment of Standard Supply Service (SSS) arrangements. The proposal clarifies how companies may account for electricity from shared, mandated or publicly funded resources (such as default utility service or government clean energy programs) while ensuring that each customer claims only their rightful share.

Under the proposal, the definition of residual mix emission factors will be revised to exclude both contractual instruments and the newly termed Standard Supply Service (SSS) services. Unlike the current methodology, reporters will no longer be able to use grid-average emission factors in the absence of contractual instruments or residual mix factors and instead would be required to use fossil-only emission factors.

A legacy clause is proposed that will allow a transition period for existing contracts. Once the revised Scope 2 Guidance is finalized, phased implementation is proposed to allow reporters time to adapt and develop tools, with an option for early adoption.

New Consequential Accounting Method for the Electricity Sector

The proposed consequential accounting method is a new layer of accounting that aims to capture the emissions impact (avoided or induced) as a result of an organization’s actions in a given year. Such actions could include clean energy procurement, investments in on-site electricity generation, or demand response. The consequential accounting would quantify system-level impacts beyond the organizations’ Scope 2 emissions impacts.

A detailed methodology is still under development. The output from this public consultation will feed into the Actions & Market Instruments (AMI) working group to inform further development of this accounting method for the electricity sector, and to guide the development of sector-agnostic guidelines.

The key elements under consultation include:

• Marginal Emission Rate Methodologies

• Additionality Frameworks, i.e. to ensure projects deliver emissions reductions beyond business-as-usual scenarios

• Build vs. Operating Margin Weighting considerations to balance short-term and long-term grid impacts of electricity projects

The final guidance is expected to align with the release of the revised Scope 2 updates.

Why This Matters

While the final guidance documents are still in development, companies should begin assessing how these proposals could impact their GHG accounting practices, data collection needs, climate disclosures, and energy procurement strategies as part of broader decarbonization efforts. Here are some practical and strategic implications companies should consider:

• Increased data granularity: Data collection, IT systems, and supplier contracts may need to evolve to capture more granular information such as hourly consumption data, hourly load profiles and instrument attributes.

• Improved comparability and credibility: A key reason for the proposed changes is to improve cross-company comparability and increase credibility of claims. Since many disclosure frameworks directly reference the GHG Protocol, companies will need to adapt the way they measure, report, and validate Scope 2 emissions for routine disclosures and due diligence efforts. As companies pursue net-zero targets and consider avoidance/impact claims, the consequential accounting guidance will influence how to frame and report the system-wide impact of a company’s clean energy actions (separate from its Scope 2 inventory).

• Shifts in procurement strategies: Rather than simply purchasing unbundled Renewable Energy Certificates (RECs), companies may need to focus on hourly-matched, deliverable certificates, or local generation paired with temporal data as stricter rules may potentially limit eligibility of certain instruments for the market-based method.

• Higher burden and cost for transition: The shift toward “most precise accessible” emission factors may increase complexity in Scope 2 calculations, especially for multinational operations with cross-border electricity flows. Furthermore, smaller companies or those in regions without hourly certificate systems may struggle. Finally, many existing annual certificates with broad geographic boundaries may no longer qualify under the stricter criteria, resulting in a more limited supply of eligible instruments (thus possibly higher prices). The exemption thresholds, load-profiles and phased timeline are intended to ease these challenges, but companies should start assessing: (i) their current certificate portfolio eligibility under the proposed criteria; (ii) their data and metering capabilities; and (iii) their strategic future procurement roadmap.
  

Next Steps

The public consultation period for both the Scope 2 and consequential accounting work streams is from October 20 to December 19, 2025. Stakeholders are encouraged to review the materials and submit feedback via the GHG Protocol consultation page. Input is being requested on all aspects of the proposals, including the usefulness, expected administrative and cost impacts of the proposed changes for decision-making. A second consultation is planned for 2026, with final publication expected in 2027.

In the meantime, companies should begin a gap analysis now to review their current certificate mix and legacy contracts, assess data readiness, and evaluate geographic boundaries and availability of qualifying instruments. For organizations engaged in clean-energy procurement (e.g., PPAs, RECs), on-site generation, demand response, electrification, or load-shifting, there will soon be opportunities (and possibly expectations) to report system-level impacts of these actions beyond just reducing your Scope 2 inventory.

Trinity can help you navigate these upcoming changes and strengthen your organization’s readiness for this next phase of GHG reporting. For more information, contact Anu Krishnan.

Stay tuned for an upcoming course on GHG Protocol on our training page.