What the GHG Protocol Draft Update Means for Corporate Energy Buyers

The GHG Protocol is in the process of revising its Scope 2 Guidance—the global standard that defines how companies account for purchased electricity emissions. The first public consultation closed on 31 January 2026, marking a shift from initial proposals to formal refinement.

If finalized largely as drafted, the update would significantly change how renewable electricity procurement translates into reported Scope 2 emissions. For corporate energy buyers, this is not a minor technical adjustment—it reshapes what qualifies as a credible market-based claim.

Where the Process Stands

Q1–Q2 2026: Feedback review and draft revisions by the Scope 2 Technical Working Group

Second half of 2026: A second public consultation, expected to focus on revised proposals and implementation details

2027: Final Scope 2 Guidance published following approval by the GHG Protocol’s Independent Standards Board

2027–2028: Phased transition period, with most reporting programs expected to align with the updated guidance around the 2028 reporting year

What this means

The rules are not final yet, and any new requirements will be introduced gradually. Companies will have time to test approaches, assess data readiness, and adjust procurement strategies before the updated guidance becomes widely expected.

What the GHG Protocol Draft Is Trying to Fix

The proposed Scope 2 update responds to structural challenges that have surfaced as corporate renewable procurement has scaled globally.

Here are the four challenges driving the changes:

1. Overstated Scope 2 claims      
Current market-based reporting can allow zero-emissions claims even when grid electricity remains carbon-intensive. As REC use and renewable procurement grow, the gap between reported outcomes and physical grid conditions has become harder to ignore.

2. Misalignment between generation and consumption      
Annual matching allows renewable electricity generated at one time to be claimed against consumption at another. As a result, Scope 2 figures may not reflect emissions at the time electricity is actually used.

3. Double counting and weak residual mix definitions      
Loose sourcing rules and inconsistent residual mix definitions increase the risk that the same clean electricity is claimed multiple times, or claimed despite already being part of the grid average.

4. Limited comparability across companies and regions      
Differences in data, markets, and reporting practices make Scope 2 disclosures hard to compare across geographies. The draft seeks clearer boundaries and more consistent quality criteria.

Key Changes Proposed in the Draft Guidance

To address these issues, the GHG Protocol draft update proposes several significant updates that affect how companies source, track, and report renewable electricity.

Some of these changes fundamentally reshape market-based claims, while others focus on improving consistency and avoiding double counting.

The proposed revisions:

• Shift from annual to hourly matching for market-based Scope 2 claims
• New geographic deliverability requirements for renewable electricity sourcing
• Updated rules for emission factors, residual mix, and standard supply
• Clearer separation between Scope 2 inventory reporting and broader climate impact

Below, we look at these proposed changes in more detail, starting with the two that would most directly affect corporate energy buyers.

Shift from Annual to Hourly Matching

One of the most significant proposed changes is the move from annual to hourly matching for market-based Scope 2 claims.

Under current rules, companies can match renewable electricity purchases to their total annual consumption. Under the draft guidance, renewable energy would instead need to be matched to electricity use on an hour-by-hour basis.

Implications

• Scope 2 results become highly sensitive to when electricity is consumed and when clean power is generated.
• Different technologies (solar, wind, storage, firm clean power) perform differently under hourly matching because they generate electricity at different times.
• Annual REC coverage alone would no longer support zero emissions claims.

Geographic Deliverability: Tighter Location Rules

Another major proposed change is the introduction of geographic deliverability requirements for market-based Scope 2 claims.

Renewable electricity must come from:

• The same grid region
• A grid that is physically connected to where electricity is consumed

This would limit the use of renewable certificates from distant or unconnected regions and tighten the link between reported claims and the local power system.

Stricter Rules for Emission Factors and Residual Mix

The draft also tightens how companies calculate emissions. Under the proposal, companies would be expected:

• Use the most precise emission factors available. If hourly or local grid data exists, it must be used instead of broad national averages.
• Apply stricter residual mix rules. This limits default grid renewable claims and requires conservative fallback factors when residual mix data is unavailable.

Inventory Accounting and Impact Claims Split Apart

Updated definitions clarify that Scope 2 inventories must reflect only electricity attributes directly linked to a company’s operations and meeting all quality criteria. Dual reporting of location-based and market-based results would remain required.

At the same time, the guidance introduces a separate framework for reporting broader climate impact. Companies would be able to disclose avoided emissions from renewable investments outside their Scope 2 totals, keeping impact claims separate from inventory accounting.

Easing the Transition

The draft acknowledges that hourly and region-specific accounting will not be equally feasible for all companies. To ease the transition, several flexibility measures are built into the proposal.

Proposed transition measures include:

• Use of load profiles to estimate hourly consumption where real-time data is not available
• Temporary exemptions or simplified requirements for smaller or low-load electricity users
• Grandfathering of certain long-term renewable contracts signed before the new guidance
• Phased implementation, with broad alignment expected closer to the 2028 reporting cycle

Key Concerns Raised

Several elements of the proposal raise substantive concerns about feasibility, market impact, and how the guidance would operate under real-world market and data constraints. These practical and structural challenges could influence how widely and effectively the updated framework is adopted across different markets.

Data and infrastructure limitations    
Hourly consumption and grid emissions data are not consistently available across many regions, making compliance particularly challenging for companies with distributed operations or global footprints.

Risk of slowing voluntary procurement    
Making granular matching mandatory could discourage companies, especially new or mid-sized buyers, from participating in voluntary clean energy markets altogether.

Geographic equity and grid impact concerns    
Tighter geographic sourcing rules could limit companies’ ability to support new renewable projects in high-emissions grids, potentially reducing overall climate impact.

One-size-fits-all risks    
A single mandatory approach does not reflect differences in company size, market maturity, or regional energy systems, and could have unintended consequences if applied uniformly.

Cost and operational burden    
Hourly and location-specific matching could significantly increase administrative effort and costs, shifting resources away from renewable procurement toward data management and compliance.

Open Questions That Will Shape the Final Rules

Many of the concerns raised during consultation point to a set of unresolved questions. These questions were central to the public consultation itself, and how they are answered in the final guidance will shape how the updated Scope 2 rules are applied in practice.

Should the new rules apply to all electricity users or only large ones?  
Smaller companies may struggle to access hourly data or contract regionally.

What should count as a valid geographic boundary for renewable sourcing?  
Defining the grid region could make or break many existing procurement strategies.

Will existing long-term PPAs and REC contracts be grandfathered?  
The answer will determine whether current contracts remain eligible for zero-emission claims.

Should impact-based metrics remain separate from Scope 2 inventories?  
This affects how companies report the real-world climate impact of their investments.

Will transition timelines differ for SMEs, global operations, or data-poor regions?  
Flexibility may be necessary to support adoption without discouraging participation.

Conclusion

The draft Scope 2 guidance signals a clear shift toward tighter alignment between reporting and grid conditions, but it also surfaces real trade-offs. The issues raised during consultation suggest that precision alone will not determine success. The way feasibility, flexibility, and market diversity are handled will be just as important in shaping outcomes.

For energy buyers, this is a period of genuine uncertainty. The direction is set, but the final shape of the rules remains open, and the consequences will be long-lasting. As the market moves toward more system-aware accounting, companies will need to balance rigor with pragmatism, and integrity with continued participation in voluntary procurement.