Proposed changes to the GHG Protocol could remove a commonly used lever for decarbonisation
- The revised Scope 2 Guidance addresses shortcomings in electricity emissions accounting, particularly by tightening the rules for RECs.
- Market-based mechanisms have led to a gap between reported and actual electricity-related emissions.
- Proposed updates include stricter criteria such as hourly matching and geographic deliverability, impacting ~70% of energy contracts.
- These changes will affect procurement strategies and may increase reported Scope 2 emissions, especially for electricity-intensive firms.
Since its introduction in 2015 as the global benchmark for corporate electricity emissions accounting, the GHG Protocol’s Scope 2 Guidance is now undergoing its most consequential revision to date. The public consultation on the proposed updates, which closed on 31 January 2026, attracted more than 800 responses signalling both the importance and the contentiousness of the changes ahead. For companies relying on carbon credits and renewable energy certificates (RECs) as part of their decarbonisation strategy, these revisions warrant close attention.
What changes are proposed concerning the GHG Protocol?
The consultation covered two aspects of the GHG Protocol: The guidance on scope 2 inventory accounting and a new framework for consequential accounting of electricity-sector emissions impacts. While the dual reporting structure, which requires both location-based and market-based methods, is retained, substantial changes are proposed for each method.
What does the GHG Protocol currently allow companies to do?
For now, the GHG Protocol allows companies to lower their official Scope 2 emissions by purchasing renewable energy certificates (RECs) or Energy Attribute Certificates (EACs), or by signing virtual power purchase agreements. In practice, this means a company can consume electricity from a grid fed by various sources but claim the emissions profile of an energy certificate. The energy associated with that certificate may have been generated in another country or come from an energy source that is not available on the grid where the business operates. The result has been persistent greenwashing concerns and doubts about whether reported Scope 2 figures accurately reflect the electricity companies consume.
Which three areas are affected by the proposed changes to the GHG Protocol
The proposed changes introduce a clear hierarchy for selecting location-based emission factors, structured around three determinative elements: spatial boundary, temporal granularity, and emission-factor type. Stakeholder feedback had identified ambiguity in how reporters select the most appropriate emission factor. In practice, companies will need to use the most precise emission factors accessible. Ideally, those would be at sub-national and sub-annual granularity, rather than relying on national annual averages.
The most consequential proposed changes concern the market-based method. Two requirements stand out:
1. Hourly matching
All contractual instruments, including Energy Attribute Certificates (EACs), Guarantees of Origin (GOs), and Renewable Energy Certificates (RECs), would need to be matched to energy consumption on an hourly basis. Under the current guidance, companies can purchase certificates annually and claim carbon reductions regardless of when the renewable energy was actually generated. The proposed shift would require temporal alignment between the certificate and the consumption to which it is attributed.
2. Deliverability requirement
Contractual instruments would need to be sourced from the same market boundary in which the reporting entity’s operations are located, or the entity would have to demonstrate available transmission capacity between generation and supply. This effectively introduces a geographic constraint on certificate procurement. Cross-border purchases of EACs or RECs would no longer count towards Scope 2 reductions.
Additionally, the proposal includes an additionality criterion and quality tiers for contractual instruments, along with a new Marginal Emissions Impact (MEI) metric to reflect the extent to which a clean energy purchase displaces fossil fuel emissions on the grid.
What do the proposed changes to the GHG Protocol imply for corporate decarbonisation efforts?
Impact on renewable energy procurement
A survey of clean energy practitioners and market participants found that nearly 80% of respondents lack confidence in their ability to procure time-matched clean electricity within smaller market boundaries. Moreover, 70% stated that their current procurement contracts would no longer be eligible under the proposed rules. These figures suggest that the shift to hourly and regional matching would disrupt existing corporate procurement strategies and climate transition planning.
The practical challenges are considerable. Most energy attribute certificate tracking systems in Europe are not yet equipped for hourly tracking. Few suppliers provide hourly data. The increased technical complexity and higher procurement costs may lead some companies, especially small and mid-sized enterprises, to scale back their renewable energy ambitions rather than navigate the new requirements.
Proposed flexibilities
The GHG Protocol has acknowledged these concerns and built in several transitional measures. Existing renewable energy contracts would be grandfathered, and estimated data or load profiles may be used when actual hourly metered data is unavailable. Smaller, lower-capacity electricity users would be exempt from the most granular requirements. A phased implementation period is also proposed to provide years of lead time before the changes take full effect
What are the implications of the proposed changes to the GHG Protocol for transition plans and decarbonisation strategies?
For companies that rely on RECs or EACs as part of their broader emissions management strategy, the Scope 2 revisions introduce both challenges and opportunities.
On the one hand, the proposed rules would raise the bar for what counts as credible Scope 2 emissions reduction through market-based instruments. On the other hand, companies that have historically relied on purchasing unbundled RECs or annual EACs to meet their renewable energy targets may find that these instruments no longer qualify or qualify only at a lower quality tier. This creates a need to reassess existing transition plans and the decarbonization measures they encompass.
What companies should do now to prepare for the proposed changes to the GHG Protocol?
Although the final standard is not expected until 2027 at the earliest, with a second public consultation planned for Q2 2026, companies should begin preparing now. We recommend the following steps:
1. Assess your current Scope 2 reporting baseline.
Review the contractual instruments your organisation currently uses and assess whether they meet the proposed hourly matching and deliverability requirements. Identify gaps between your current approach and the proposed standard early, so that adjustments can be planned rather than reactive.
2. Evaluate your renewable energy procurement contracts
Determine whether existing power purchase agreements and certificate procurement arrangements would continue to qualify under the revised framework. Also, engage with your energy suppliers about their readiness to provide hourly data, and consider whether renegotiation or diversification of procurement strategies is needed.
3. Monitor interoperability with mandatory frameworks
The GHG Protocol revisions will interact with mandatory reporting requirements under the CSRD/ESRS, ISSB, and national regulations. Track how these frameworks align and where divergences may create compliance challenges or reporting inconsistencies.
How agradblue can support your company?
The interplay between changing GHG accounting standards, renewable energy procurement and climate-related transformation planning requires in-depth expertise. At agradblue, our team of sustainability consultants supports companies in developing resilient climate transition plans that meet current regulatory requirements and voluntary standards and, above all, fit their business model and strategic direction.
From portfolio assessment, climate target setting and transition planning to the integration of CO₂ certificates as part of Beyond Value Chain Mitigation (BVCM) and with a view to the new SBTi V2 concept of Ongoing Emissions Responsibility (OER), we cover the entire spectrum. In addition to transformation planning and strategies for carbon credits, our colleagues at Westbridge provide operational expertise in energy procurement, for example to specifically expand the share of renewable energies as part of your decarbonization.
agradblue was founded in 2012 and is one of the leading ESG consultancies in Europe. Together with its sister companies, more than 80 sustainability experts are active in 24 European countries. We help companies to build resilience and strategic competitive advantage through sustainability transformation, a claim that is reflected in the award as number one in the ESG Consultancy category of the Bell Study 2024.
You can find out more about our services on our website or contact us directly at contact@agradblue.com.