The debate on GHG Protocol’s electricity accounting revisions is far from over

A workshop held in late October by the Greenhouse Gas (GHG) Protocol to debate revisions to its widely used electricity standards failed to resolve multiple questions key to the future of corporate renewable strategies, including how to transition to the new rules and how long existing contracts will be recognized.

The three-day technical working group meeting was convened by GHG Protocol to reconcile more than 1,100 comments submitted during the consultation for Scope 2 carbon accounting revision, which guide how companies calculate and disclose emissions inventories for purchased electricity. 

Much of the public feedback focused on a change that would ask companies to report emissions from hourly electricity consumption, rather than the annual calculation used under rules in place since 2015. The text as it currently stands also includes new rules for “deliverability” that would require contracts or environmental attribute certificates to come from the same regions companies consume their electricity.

Both proposals will be part of the final revisions, based on notes published this week summarizing the meeting discussion and an update issued Oct. 16 by the GHG Protocol’s independent standards board for Scope 2, which has the final say. But the hourly matching methodology may be “recommended” rather than “required” and phased in over several years starting with large electricity consumers and as data becomes more readily available, if the working group’s recommendations are recognized.

Many other issues remain in limbo, including how companies can account for lengthy legacy power purchase agreements (PPAs). Right now, the text includes a single effective date, after which all contracts must meet new hourly matching, local deliverability and grid incrementality conditions. That’s a big concern for members of the Corporate Energy Buyers Association (CEBA), which have procured more than 50 gigawatts of electricity under the old rules.

“This means that a company that signed a 15-year PPA could lose credit for that investment while the PPA is ongoing,” CEBA noted in a blog detailing its concerns.

The outstanding questions are being addressed by subgroups of the technical working group and other meetings planned through November, with recommendations due to the independent standards board in early December, for consideration at a scheduled Dec. 15 meeting.

Text of the final revisions will be circulated in the second quarter of 2027, as part of a comprehensive public consultation for a unified corporate carbon accounting standard from GHG Protocol and the International Organization for Standardization (ISO).

“The outcomes of the workshop, as reflected in the minutes, are an interim step towards a final standard which will require additional steps and public consultation,” according to the meeting summary.    

‘Direction of travel’ 

The technical working group meeting, held in-person in Washington, D.C., and virtually from Oct. 20–22, included 39 of the 46 members along with guests from the independent standards board, the GHG Protocol secretariat and ISO. 

“What struck me, and what may be the bigger story, is how it appears the independent standards board has already decided the major items and is using the working group to discuss more technical points,” said Matthew Yamatin, a former Thermo Fisher Scientific sustainability program manager who is now an independent advisor. 

Among the adjustments supported by the technical working group:

• A phased transition for the new rules that would start with the largest electricity users, by load. “Dates, thresholds and readiness conditions would still need to be defined,” according to the notes, which includes draft text the group was asked to consider. The timelines being discussed range from 2031 to 2039. For example, companies with annual loads of more than 10 terawatt-hours of power may have to comply by 2031 (for 2030 data).
• Standardized grid boundaries based on “plausible physical connection between generation and consumption.” The list would be set by the GHG Protocol or an independent authority, so companies don’t have to interpret them on their own.
• Flexibility around what constitutes incrementality of a generation resource, which the working group would like to see recommended rather than required. What will probably count: clean generation contracts where the corporate buyer is the original offtaker or the generation source is within a certain age limit: 15 years was discussed.

Ripple effect

The ongoing Scope 2 discussions at GHG Protocol have impacted the Science Based Targets initiative’s (SBTi’s) rollout of the Corporate Net-Zero Standard 2.0, which includes big changes for Scope 2 target-setting processes when it takes effect on Feb. 1.

SBTi is seeking public comments on potential interim changes, including definitions for grid deliverability regions and clarified recognition pathways for older PPAs, that are meant to provide a bridge for companies while updates to the GHG Protocol’s corporate carbon accounting standard are finalized.