Scope 2 GHG Protocol Reporting Updates: What Businesses Need to Know

The rules around how to report Scope 2 emissions – those from purchased energy – are being rewritten for the first time in a decade. The GHG Protocol's proposed revisions to its Scope 2 Guidance (originally published in 2015) recently completed a 60-day public consultation and are now in deliberation, with a revised standard anticipated in late 2027.

For most businesses, the changes will not be immediate. But the direction of travel is clear: more accuracy, tighter rules on what counts as a credible clean energy claim, and greater comparability between organisations. Here's what's being proposed, who it affects most, and how to start preparing.

Why the Scope 2 Guidance is being updated

The Scope 2 Guidance (2015) has served as the global reference for accounting for emissions from purchased energy for the past decade. When it was written, voluntary corporate climate reporting was the norm. That landscape has changed. Today, scope 2 figures feed into a growing list of mandatory disclosure regimes (ESRS, UK SRS, IFRS, California's SB 253) and voluntary programmes (SBTi, RE100, B Corp, CDP).

The GHG Protocol's Scope 2 Technical Working Group, convened in 2024, identified a range of core concerns. These concerns have shaped the proposed revisions, which were approved for public consultation by the GHG Protocol's Independent Standards Board in July 2025.

The proposed changes at a glance

The structure of Scope 2 reporting itself is staying the same. Businesses will still need to report under both the location-based method and the market-based method (known as dual reporting). What's changing is the level of precision required for each, plus a new set of feasibility measures designed to make the rules workable in practice.

The proposed updates fall into three buckets:

• Updates to the location-based method (emission factor hierarchy, accessibility rules)
• Updates to the market-based method (hourly matching, deliverability, Standard Supply Service, residual mix rules)
• Implementation measures to support feasibility (load profiles, exemption thresholds, legacy clauses, phased implementation)

Changes to the location-based method

The location-based method uses average emissions intensity for the grid where consumption takes place. The proposed updates focus on which emission factor should be used.

A new emission factor hierarchy

The revised hierarchy prioritises geographic precision first, then time-matching. In practice, this means a local emission factor with annual resolution (such as those provided by DESNZ for the UK) would be preferred over a national emission factor with hourly resolution.

The hierarchy also distinguishes between production-based and consumption-based emission factors, with consumption-based prioritised. Production-based factors only count generation within a region. Consumption-based factors account for imported and exported power, giving a more accurate picture of the mix actually delivered to consumers on that grid.

The 'accessible' rule

A new concept of accessibility is being introduced. Reporters will be required to use the most precise emission factor that is "accessible" to them, defined as: publicly available, free to use, and from a credible source. Crucially, this means businesses are not expected to purchase commercial datasets. If the most granular factor available is behind a paywall, the next-best publicly accessible factor can be used instead.

Reporters will also only need to use emission factors at the level of granularity for which they have matching activity data. So if a business has access to hourly factors but only annual consumption data, they can stick with annual factors. Those wanting to go further can use load profiles (more on these below) to translate annual data into hourly approximations.

Changes to the market-based method

The market-based method allows businesses to apply contractual clean energy claims (such as RECs or Guarantees of Origin) to reduce their reported emissions. The proposed updates here are the most significant in terms of accuracy and practical effort.

Hourly matching

Under the proposed rules, all contractual instruments used in the market-based method would need to be matched on an hourly basis. In other words, if a business is using a REC to offset electricity used at 2am on a Tuesday, the REC would need to come from generation produced during that same hour.

This is a major shift from today's annual matching, where any REC from anywhere in a broad market boundary in the same calendar year can be applied.

Hourly matching applies only when an organisation uses contractual instruments under the market-based method, either through voluntary procurement or as part of a Standard Supply Service. It does not apply to residual-mix reporting, which can remain annual, monthly, or hourly as data allows.

Deliverability

The proposed rules redefine the market boundary based on whether electricity from a generator could plausibly be delivered to the reporting entity through the connected grid. In some countries, national borders still approximate the deliverable boundary. In others, where grid interconnections cross or differ from national borders, the market boundary would be adjusted accordingly.

This shifts the rules away from the "one continent, one market" practices that currently apply to the US and EU, toward boundaries based on what can physically be delivered.

Standard Supply Service (SSS)

Standard Supply Service refers to clean energy resources that are publicly funded, mandated by policy, or part of default utility service. For example, government-mandated clean energy procurement programmes or generation from publicly owned facilities.

Under the proposed rules, a business can only claim its pro-rata share of SSS resources. So if 20% of the deliverable power in a business's region comes from clean SSS resources, that business can claim 20% of its consumption as zero-emissions electricity. To get to zero emissions overall, it would need to procure additional contractual instruments for the remaining 80%, and those instruments would also need to meet the new quality criteria.

Residual mix and fossil-only rates

The current rules allow businesses to fall back on a grid-average emission factor if no residual mix is available for their region. The problem is that grid averages already include clean generation that other businesses may be claiming through EACs, leading to double counting.

The proposed rules eliminate this fallback. Where no residual mix is available, businesses would be required to use either a fossil-only grid-average factor or a fossil emission factor (such as gas, oil, or coal). This is a meaningful change for any business reporting in regions where residual mix data isn't yet published.

Implementation measures: how feasibility is being built in

Recognising that hourly matching and deliverability requirements would be a major step up for many reporters, the proposed revisions include several measures to keep things workable.

Load profiles

Load profiles are simple hourly curves that show how electricity use rises and falls throughout the year, based on the type of organisation. They can be used to approximate hourly data when only annual or monthly figures are available, both for activity data and for contractual instruments.

The proposed updates introduce a hierarchy of load profiles, ranging from facility-specific (most precise) down to flat averages across all hours (least precise). This means even reporters without smart-meter-level data can apply hourly matching using reasonable approximations.

Exemption thresholds for smaller reporters

Hourly matching is the headline change, but it's not being applied uniformly across all reporters. The proposed rules include exemption thresholds based on electricity consumption volume and/or company size. Initial analysis shared by the GHG Protocol suggests that under the proposed thresholds, the majority of CDP-reporting companies would be exempt from hourly matching, while still capturing the vast majority of grid load (because the largest energy users would remain subject to it).

For most mid-market businesses, this likely means hourly matching itself will be an option rather than a requirement, at least in the first phase of implementation. The other proposed changes (deliverability, SSS, residual mix rules) will still apply.

Legacy clause

To recognise investments already made under the existing rules, a legacy clause is being developed. The details (eligibility, disclosure requirements, duration) are still being worked through and will be tested in further consultation. This is intended to give businesses with existing long-term renewable procurement contracts confidence that those investments will still be recognised under the updated framework.

When will Scope 2 changes be put in place?

The revised standard is expected to be published in late 2027, with implementation phased in over multiple years after that. No new location-based or market-based requirements will take effect before the parallel Actions and Market Instruments work (which covers how to account for clean energy procurements that fall outside scope 2) is also available.

This phased approach gives businesses, data providers, utilities, and software platforms time to prepare.

Will the Scope 2 changes affect my business?

The honest answer: it depends on size and energy use.

Larger reporters, particularly those with high electricity consumption or those operating in regions with active hourly data infrastructure, will feel the changes most. Hourly matching, deliverability rules, and the SSS pro-rata cap could all materially shift their reported scope 2 figures.

SMEs and mid-market businesses, those likely to fall under the exemption thresholds, will still be affected, just less dramatically. The location-based hierarchy will change which factors should be used, although the vast majority solely use annual consumption data and factors due to availability of data. Procurement decisions around RECs and Guarantees of Origin will need to take deliverability into account. The residual mix changes will close a fallback option that's quietly relied on by many reporters today, although residual mix factors are widely available for the US and Europe.

What businesses should do now

The standard isn't due to publish until late 2027, with implementation phased after that. There's no need to scramble. But there are sensible steps to take in parallel:

• Review the granularity of your current electricity data. Where do you have hourly meter data? Where are you using estimates? Better data quality is useful regardless of how the rules land.
• Audit existing renewable procurement contracts. Check where the underlying generation sits relative to your consumption, and whether you'd meet the proposed deliverability and time-matching criteria.
• Identify where you sit against the proposed exemption thresholds. If you're close to the line, it's worth scenario-planning both options.
• Watch for residual mix data in your region. If your business reports under the market-based method in markets where residual mix data is patchy, factor in the possibility of needing to apply fossil-only rates instead.
• Engage with the consultation outputs. The GHG Protocol will publish further detail on hourly matching and deliverability ahead of the standard's publication.

How Seedling helps clients stay aligned with the GHG Protocol

At Seedling, we help businesses measure full-scope footprints (scopes 1, 2, and 3) aligned with the GHG Protocol. As the standard evolves, our team builds the changes into the platform and walks clients through what each update means for their footprint, their procurement decisions, and their reporting.

If you'd like to talk through what the proposed Scope 2 changes might mean for your business, get in touch.