Is Scope 2 Splitting Into Two Market-Based Methods? What Changes for Purchased-Electricity Claims

Short answer: Not yet — and not by itself. In September 2026 the GHG Protocol’s Independent Standards Board (ISB) set a direction of travel for the Scope 2 revision: two market-based methods, running side by side for a transition period. Method 2 is the current 2015 method, unchanged. Method 1 is a stricter method built on hourly matching, deliverability and incrementality. Method 1 would be the recommended method during the transition, companies would have to disclose which method they used, and after a cutoff date that has not been set, Method 1 would become the required method wherever data meeting the quality criteria is available. None of this is in force. The 2015 Scope 2 Guidance remains the operative standard, and nothing you report today changes because of this decision.

That distinction — direction set, rules not changed — is the whole story for anyone buying renewable energy certificates (RECs) or signing power purchase agreements (PPAs) against a Scope 2 claim this year: it tells you where certificate buying is heading, and it does not change what counts in your current inventory.

The rules you are actually reporting under: the 2015 Guidance in brief

Scope 2 covers the emissions from generating the electricity, steam, heat and cooling a company buys. (New to the scopes? Our plain-English explainer, Scope 1, 2 and 3: The One Rule That Sorts Them, sets out how they divide.) The Scope 2 Guidance, published in 2015 as an amendment to the Corporate Standard, asks companies in markets that offer contractual instruments to report Scope 2 two ways:

• Location-based: your consumption multiplied by the average emissions intensity of the grid where it happens. It answers: what does the grid I physically draw from look like?
• Market-based: your consumption priced through the contractual instruments you have actually bought — energy attribute certificates, direct contracts, supplier-specific emission rates — with anything not covered taking the residual mix, the factor for electricity left in the market after everyone else’s claims are removed. It answers: what did I choose to buy?

Market-based instruments only count if they meet the Guidance’s eight Scope 2 Quality Criteria. The ones that bite in practice: the instrument must convey the emission rate of the electricity generated; be the only instrument carrying that claim; be tracked and retired or cancelled by you or on your behalf; be issued and redeemed as close as possible to the period when you consumed the electricity; and come from the same market as your consuming operations. Note what those criteria do not require: matching within the year is enough, the market boundary is broad, and the age of the generating plant is irrelevant. A certificate from a decades-old hydro plant three states away can satisfy the 2015 criteria today. That gap — between what the accounting rewards and what physically supplies a building — is what the revision is about. (Our corporate carbon footprint calculator produces the location-based figure and states plainly that market-based accounting is outside its scope.)

How the revision got to two methods

The Scope 2 Technical Working Group began work in September 2024. Its proposed revisions went to public consultation from 20 October 2025 to 31 January 2026, drawing nearly 1,100 responses from 56 countries. The consultation draft proposed a single, stricter market-based method: certificates would count only if matched to consumption hour by hour and generated in a grid region that can actually deliver power to the consumer. The location-based method would also have been tightened, toward the most precise grid factor freely available — location precision first, then time.

Feedback split into two camps — two theories of change, in the GHG Protocol’s own October 2026 update. One argues that clean power matched by the hour, delivered on the same grid, and generated by recently built plants pushes demand toward new clean generation where and when it is scarcest. The other argues that annual matching and wide boundaries keep the certificate market large, liquid and easy to join. Neither camp won. In April 2026 the ISB decided it would set the direction and the working group would resolve the open questions; the Secretariat’s proposal — one method per theory of change — became Method 1 and Method 2.

The two methods, side by side

Method 1 is the strict track. Three requirements define it:

• Hourly matching. Certificates count against consumption in the hour they were generated, not across a year. A megawatt-hour of solar generated at noon in July does not offset a megawatt-hour consumed at 7 p.m. in January.
• Deliverability. The generation must sit in a grid region that can deliver power to your operations — market boundaries aligned with the physical grid, not with a national certificate market.
• Incrementality. Eligible generation would be limited by plant age, so claims rest on relatively new capacity. The window has not been set.

Method 2 is the 2015 method carried forward: annual (or monthly) matching within existing market boundaries, the current Quality Criteria, legacy procurement strategies left intact. Under the September 2026 direction, companies could report under Method 2 until the cutoff date, should use Method 1 in the meantime, and must disclose which of the two a figure rests on. After the cutoff, a market-based figure would have to be a Method 1 figure where quality data is available. One level up, whether reporting a market-based figure at all will be required, recommended or optional — the “shall / should / may” wording — is explicitly unresolved.

There is also a side door worth knowing about. The parallel Actions and Market Instruments workstream is developing a multi-statement framework in which procurement that does not meet market-based requirements can still be reported — in a GHG Impact Statement, or as non-GHG indicators such as the share of consumption matched with clean power. The direction is not “buy differently or claim nothing”; it is “claim it in the statement that matches what you actually did.” The ISO working group drafting the joint standard has reportedly taken a different line on some elements, including monthly rather than hourly matching as a floor.

What hourly matching would actually demand

Method 1 is as much a data requirement as a procurement rule. Claiming under it would take:

• Interval consumption data. You cannot match hourly if your meter history is a monthly bill total. Hourly or sub-hourly meter data — utility, submeter, or building management system — becomes the evidentiary base of the claim.
• Time-stamped certificates. Certificates would need generation timestamps granular enough to match, and a registry trail that preserves them.
• A paper trail per instrument. Plant location and grid region, generation dates and hours, megawatt-hours, vintage, and retirement proof in the reporter’s name — the records that let an assurance provider test deliverability and matching rather than take them on faith.
• Procurement shaped to a load profile. A flat annual REC purchase stops being a complete strategy. Matching a building that peaks on winter evenings points toward wind, storage-backed products or firmed hourly-matched PPAs — and toward knowing your hourly load shape before you shop.

For a property manager, the translation is blunt: the buildings that will struggle under Method 1 are not the ones buying the wrong certificates. They are the ones that cannot say, hour by hour, what they consumed.

What to do now, and what to wait on

Do now:

• Keep reporting both Scope 2 figures under the 2015 Guidance. Dual reporting is the current requirement, and regulators are building on it as it stands — California’s Air Resources Board staff proposal for 2027 SB 253 reports asks for both numbers under the current Guidance.
• Ask your utilities and metering providers, in writing, whether hourly or interval data is available for each site, and keep the answer. It is the cheapest future-proofing available.
• Tighten certificate records to the standard Method 1 would test: plant, location, vintage, megawatt-hours, retirement confirmation.
• When a PPA or green tariff comes up for renewal, ask the hourly question — what share of our consumption would this product match hour by hour, in our grid region? — and file the answer, even if you buy on 2015 terms this cycle.
• Brief whoever assures your inventory on which method each figure uses. Method disclosure is the one element of the September direction stated as a “shall” — expect it to survive into the final text.

Wait on:

• Do not restate past inventories, and do not describe any current figure as “Method 1” — the method does not exist yet as a standard, and claiming early compliance with an unfinished rule is a greenwashing exposure, not a head start.
• Do not pay a premium for hourly-matched products solely for accounting reasons until the cutoff date, the incrementality window and the data-quality criteria are set. There may be energy or risk reasons to buy them; the accounting reason is not yet bankable.
• Do not let a vendor sell you the revision as a 2027 compliance deadline. The next milestone is a consultation in Q2 2027 — a chance to comment, not a filing date.

What stays unchanged

The location-based figure is not going anywhere; both methods in the proposed split are versions of the market-based method, and the two-number structure of Scope 2 reporting survives the direction set so far. The physical point underneath the accounting also survives: certificates allocate claims, they do not reroute electrons. What the September 2026 direction changes is the long-run terms on which the contractual story will be believed. The wider standards landscape is tracked in our Environmental ESG complete professional guide, and we will update this page when the consolidated consultation draft is published.

This article is general information about a standards revision in progress, based on the GHG Protocol’s published update of 16 October 2026 and the ISO–GHG Protocol partnership announcements. It is not accounting advice. The GHG Protocol Scope 2 Guidance (2015) remains the operative standard until a revised standard is published and takes effect; consult your assurance provider on your own inventory.