Month: May 2025

Scope 2 Revisions Process: Protecting the Voluntary Clean Energy Market

Posted on by Liana Biasucci

By Jon Powers, President at CleanCapital, and Roger Ballentine, President at Green Strategies, Inc.

Originally published by CleanCapital.

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The Greenhouse Gas (GHG) Protocol, developed over 25 years ago, has become the standard for corporate emissions tracking. It began as a voluntary framework and is now used by over 90% of companies that track emissions. In the recent Experts Only podcast episode, we discuss the future of Scope 2 emission tracking for corporations. Today, as we are navigating the changing landscape in clean energy, corporates shouldn’t lose sight of tracking Scope 2 emissions. Scope 2 emissions often make up a significant share of a company’s carbon footprint and can either help or hinder achieving climate goals.

With proposed changes to the Greenhouse Gas Protocol threatening to restrict how companies can account for renewable energy purchases, the flexibility and affordability of clean energy procurement are at risk for many. These changes could undermine the future of corporate sustainability targets, increase operational costs, and stall progress in the voluntary renewable energy market. The companies that act now to understand and influence these changes will, ultimately, be in a better position to manage risk, maintain their credibility, and be a leader in energy dominance. 

About GHG Protocol: Scope 2

In procuring clean electricity to meet their climate and business goals, companies follow the GHG Protocol’s Scope 2 Guidance. Under the guidance, Scope 2 standardizes how corporations measure emissions from purchased or acquired from sources such as electricity, steam, heat and cooling. The Scope 2 Guidance has been instrumental in building the voluntary market for clean energy and supporting the development of 100 gigawatts of clean energy purchased by corporates. The Scope 2 Guidance is currently undergoing its first revision in over a decade to reflect the advancements in measurements and technologies. These updates to the Guidance will significantly impact corporate clean electricity procurement strategies around the world.  

Green Strategies has been working alongside companies, NGOs, and other grid experts to identify a range of potential Scope 2 reforms. While we know the status quo needs modernization, we recognize the potential for some companies to back away from their Scope 2 goals if viable ways to procure clean electricity and mechanisms to demonstrate reductions in emissions are not available to them. Currently, the Protocol’s Technical Working Group is proposing a requirement for reporting Scope 2 inventories on a time and location-granular basis, also known “24/7” accounting.  

This proposal would require companies to match clean electricity purchases with their electricity consumption on an hourly basis and within the same limited geographic regions in which they operate. Such a change could help drive companies to focus more closely on the time and location aspects of their use and consumption, creating demand for crucial clean resources capable of meeting demand at all times. This is why Green Strategies has supported adding time and location matching as an option for buyers to pursue, along with other options that allow and incentivize companies to procure renewable energy on the dirtiest grids in order to maximize the real-world emissions impact of their actions. Unfortunately, by exclusively mandating narrow time and location accounting for nearly all companies, the current proposal runs the clear risk of reducing overall renewable corporate procurement and missing critical opportunities to reduce more emissions sooner.  

Green Strategies recently confirmed these risks through a survey asking companies how these proposed Scope 2 changes might impact their clean electricity procurement practices. We found that nearly 80% of respondents lack confidence that they would be able to procure time-matched clean electricity within smaller market boundaries. 70% of respondents said they have current procurement contracts that would no longer be eligible under smaller market boundaries. Companies cited higher costs, technical capacity, as well as the availability of clean generation as key concerns with this proposal. You can read a summary of this report here or the full report here.

At the 2025 Clean Energy Buyers Alliance (CEBA) Spring Summit, no session gathered more attention than one on 24/7 and Scope 2 updates. Other than the few companies who have been closely involved in the Protocol’s process, many CEBA members were surprised and concerned about the prospect of mandatory 24/7 accounting.  

What Do Clean Electricity Buyers Think About Pending Scope 2 Changes?

Posted on by Liana Biasucci

In late 2024, Green Strategies issued a survey to companies to ask how potential changes to the Greenhouse Gas Protocol’s (the Protocol) Scope 2 Guidance might impact their clean electricity procurement practices. We recently released our results in a report, How Scope 2 Revisions May Change Clean Electricity Procurement Strategies.

Why did we do this survey? Because Scope 2 Guidance rewrites are underway now for the first time in a decade – and to date, little research has been done on how leading reform proposals might impact the clean energy procurement practices of the companies that drive the voluntary renewable energy market. After attending the recent CEBA Summit, we know many companies are just beginning to understand the changes that are on the table and want their voices heard.

Our survey asked how procurement may change under three different scenarios which align with major stakeholder-proposed revisions now under consideration: 1) smaller market boundaries; 2) smaller market boundaries and hourly-matching requirements; and 3) changes to impact accounting.

So, what did we find?

Scenario 1: Smaller Market Boundaries

Under current Scope 2 rules, companies reduce Scope 2 inventories by matching their consumption with clean electricity purchased within eligible market boundaries. The United States and European Union are individual markets. Proponents of smaller market boundaries argue that narrower location-matching requirements may be a good way to tie greenhouse gas inventories to actual emissions more closely. Our survey identified buyer/practitioner concern with smaller boundaries:

  • 70% of respondents indicated they have current clean electricity contracts that would no longer be eligible under smaller market boundaries.
  • In total, around 80% of respondents in different market structures without retail choice believed procurement would be significantly (39%) or moderately (43%) more difficult.
  • One respondent expressed concern that smaller boundaries may prevent a company from aggregating load in order to procure larger amounts of clean electricity at once. Others noted that certain regions already lack viable customer access to clean electricity, and smaller market boundaries may delay or prevent their procurement to cover load in those regions.

The theory of change for smaller market boundaries is also that it will encourage companies to engage utilities and policymakers. However, nearly 60% of companies said they would not increase engagement with policymakers , and an additional 26% were unsure. Respondents were split on whether they would increase engagement with utilities. Some individual companies cited budget constraints, whereas others were skeptical that utilities would be receptive to increased pressure.

Scenario 2: Smaller Market Boundaries and Hourly Matching

A second scenario asked respondents to consider both smaller market boundaries and a requirement to match clean electricity purchases to energy use on an hourly basis. Our survey found that nearly 80% of respondents lack confidence that they would be able to procure time-matched clean electricity within smaller market boundaries. Respondent insights indicated concern over higher costs and whether suppliers will be able to provide resources that meet time and location criteria.

Approximately two-thirds of respondents expressed that they would likely increase procurement of firm and dispatchable carbon-free energy resources (resources that can be available quickly at all times when needed) – if they were available, though many said they would only increase these purchases if costs were minimal.

Scenario 3: Changes to Impact Accounting

Scenario 3 would permit companies to procure outside current GHG procurement boundaries, require that projects demonstrate meaning generation from new sources, as opposed to pre-existing), and separately report displaced emissions from their procured electricity. While most respondents said they would procure the same overall volume of clean electricity, approximately 60% of respondents indicated that the flexibility to procure outside of existing market boundaries would allow them to increase the carbon impact of their clean electricity purchases. Approximately 60% of respondents indicated that even with broader boundaries, they would not necessarily increase their procurement, while 22% indicated they would procure more.

What does this mean?

We need more insight into buyer perspectives and potential behavior changes resulting from updates to the Scope 2 Guidance. We presented the results of our survey during a conversation table at the 2025 CEBA Spring Summit. There was a lot of interest from attendees – many may have been aware generally of the Protocol updates but were less aware of the specific proposed changes. These conversations underscored what we found with the survey –some potential Scope 2 changes may inhibit company procurement of clean electricity.

The Protocol should update and adopt reforms to address existing shortcomings, but it needs to consider the likely impact of these changes. Existing reform proposals may disrupt the ways that many companies currently transact for clean electricity, and the Protocol should consider how it can stay usable and relevant in order to allow companies to keep expanding clean electricity. If you represent a corporate buyer of clean electricity, or are otherwise a clean electricity practitioner, now is the time to make your voice heard on Protocol updates. What would work for you? What improvements would you suggest? We anticipate that the public comment period will be open in the fall of 2025, but engaging members of the Technical Working Groups and other relevant stakeholders now is also critical.

Report Release – Scope 2 Accounting Revisions: Practitioners’ Perspectives

Posted on by Liana Biasucci

Today, hundreds of companies use the GHG Protocol Scope 2 Guidance to account for their clean electricity purchases. While stakeholder Scope 2 revision proposals often draw upon energy system modeling and desktop studies, almost no research has been done to evaluate how buyers themselves may change their clean electricity procurement strategies under revised accounting rules. To fill this gap, Green Strategies surveyed companies to assess how potential Scope 2 updates may change their clean electricity procurement strategies. We are excited to share the results of this first-of-its-kind survey, which can inform stakeholders and standard setters on how accounting reforms may result in real world actions.

The full report, How Scope 2 Revisions May Change Clean Electricity Procurement Strategies: Insights from Corporate Practitioners, may be accessed here or viewed below.

How Scope 2 Revisions May Change Clean Electricity Procurement Strategies