GHG Protocol’s Top 14 FAQs on Scope 2 Emissions Explained

Introduction

The Greenhouse Gas (GHG) Protocol is the most popular carbon accounting guide which offers standardized frameworks for measuring and managing emissions (read more about the Scope 1, 2 and 3 of the GHG Protocol here). Among its widely used frameworks, Scope 2 emissions—those associated with purchased electricity, steam, heating, and cooling—hold particular significance for companies striving to reduce their carbon footprint. The recently released GHG Protocol’s Scope 2 FAQs document addresses common queries, offering clarity on some ambiguous areas of the Scope 2 emissions accounting. This blog highlights critical questions covered in the FAQ which can enable companies to overcome the challenges in estimating Scope 2 emissions for their companies.

Key Questions on Scope 2 Emissions

The GHG blog addresses 15 FAQs related to Scope 2 emissions. We are sharing a few questions and condensed answers below. 

• What emission factors should be used for renewable energy sources?
  • Brief Answer – Renewable (non-biogenic) and nuclear energy are carbon-free at generation. Per the Corporate Standard, CH4 and N2O emissions from biogenic sources are reported in scope 2, while CO2 emissions are reported outside the scopes.
• Is it acceptable to use a grid-average emission factor to calculate a market-based Scope 2 total?
  • Brief Answer – Only in the absence of product- or supplier-supplier specific and residual mix data should you use grid-average emission factor data from a source like eGRID to account for market-based scope 2 emissions. 
• What key questions should I ask my electricity supplier regarding emissions reporting?
  • Brief Answer – Electricity suppliers may calculate a fuel mix and related GHG emissions using different methods and parameters, following different regulatory requirements. The methodology can be obtained. 
• If I do not procure specific renewable energy, am I still required to report using both the location-based and market-based approaches?
  • Brief Answer – If your organization operates in any region where product- or supplier-specific data is accessible, then you must report both location-based and market-based scope 2 emissions.
• How should emissions from electricity consumed in leased assets, such as a tenant-leased office building, be categorized under Scope 2 or Scope 3 depending on the lease arrangement and consolidation approach?
  • Brief Answer – It depends on which of the three consolidation approach options: equity share, financial control, and operational control.
• If a company generates renewable energy onsite, such as rooftop solar panels, and sells excess to the grid while purchasing grid electricity, can it still claim zero emissions for its energy use?
  • Brief Answer – Companies who are consuming energy directly from a generation facility that has sold certificates (either owned/ operated equipment or a direct line) forfeit not only the right to claim those emissions in the market-based method (requiring the use of some other market-based data source such as other “replacement” certificates, a supplier-specific emission factor, or residual mix) but also the right to claim that emissions profile in the location-based method.
• How should emissions be accounted for and reported when my company receives payment from logistics or transportation companies for charging their electric vehicles at our facilities?
  • Brief Answer – If the reporting company is selling its electricity to the logistics and transportation company through electric vehicle charging, they are serving the same function as an energy retailer and would account for those emissions in scope 3, category 3 (Fuel-and energy-related activities not included in scope 1 or scope 2).

More detailed answers are available in the source article which can be accessed here. 

Conclusion 

The GHG Protocol’s Scope 2 FAQs document is a valuable resource for businesses as more and more companies are now mandated to report their Scope 1, 2 and 3 emissions. While Scope 2 emissions are comparatively straightforward compared to Scope 3 emissions, there are still several confusions on how to account for certain emissions. This new set of FAQs will help address those ambiguities.