Greenhouse Gas Protocol Revisions Are Highly Relevant for All Entities Using EACs: Here’s How to Get Involved

Dec 21, 2022

Background: Providing input on Scope 2 guidance is critical 

The Greenhouse Gas Protocol (GHGP) is among the most important guidance documents for enabling clean electricity procurement worldwide. Essentially, all entities using Energy Attribute Certificates (EACs), or Renewable Energy Certificates (RECs) are affected by GHGP guidance materials, which are now in the process of being reviewed.  

Providing input on the review is critical because the GHGP Scope 2 Guidance establishes the methods (rules) for measuring, tracking, and reducing carbon emissions linked to purchased electricity. The document lays the foundations for all major corporate reporting frameworks including RE100, the Science Based Targets Initiative, and Race to Zero.  

Accordingly, the revised Scope 2 Guidance will affect how companies and countries around the world track and report their clean electricity use.  

The review process has already started!
GHGP recently published surveys to collect stakeholder input on the Scope 2 Guidance. Entities of all types — ranging from brands and suppliers to national governments — are welcome to provide input on the review process, but many market actors are still unaware of how best to do so.  

The I-REC Standard Foundation strongly encourages governments and market actors of all kinds to participate in the review. As a global knowledge partner for EAC markets, the I-REC Standard will keep governments and market actors up to date on the review process, and how best to get involved. The first critical milestone is to review and respond to the surveys by 28 Feb 2023. 

Why it is important to get involved 

For background, the original GHGP Scope 2 document was finalized in 2015. It provides a framework for corporates to measure and track emissions associated with their electricity consumption. Critically, the document defines both the market and location-based accounting methods, which are used by most corporate electricity consumers today.

These accounting methods allow countries to use EACs as tracking instruments under legislation and electricity market design, enabling the first corporate power purchase agreements (PPAs) to take place and scale up over time. EAC integration in compliance policies and electricity market design has also helped drive recent surges in clean electricity procurement and renewable generation capacity.  

Examples include references to EAC used in US legislation, the Guarantee of Origins in Europe, and national REC policies across Africa, Asia, and the Middle East. Where these markets were virtually non-existent outside of the US and Europe before 2015, today there is a more than 300-TWh annual market for these mechanisms linked to corporate demand driven by the Scope 2 guidance. 

The GHGP Scope 2 revisions can significantly impact the rules that underpin clean electricity markets and are, therefore, relevant to all market and government actors involved in the corporate clean ecosystem.  

Objectives of the Revisions, and Next Steps 

The objective of revising the Scope 2 Guidance is to better understand, identify, and address any gaps that may have developed over the past decade. The revision will help align GHGP guidance with emerging best practices to ensure the Scope 1, Scope 2, and Scope 3 frameworks provide credible foundations for businesses to track progress toward net-zero targets and to support them in delivering increasing impacts in their decarbonization efforts.  

The GHGP team is currently conducting four surveys on the following topics. While the Scope 2 Guidance is most relevant to I-REC(E) market participants, the I-REC Standard strongly encourages market players to review and respond to all four surveys:  

  1. Corporate Accounting and Reporting Standard  
  2. Scope 2 Guidance  
  3. Corporate Value Chain (Scope 3) Standard and Scope 3 Calculation Guidance  
  4. Market-based accounting approaches 

All survey responses must be submitted before 28 February 2023.  

While the final outcomes of the survey (and their integration into official GHGP documents) may take years to go into effect, we have already entered a critical phase in the review process, and highly encourage market actors to participate in the comment period.  

We look forward to sharing further input with market stakeholders as we engage in the review process and help chart a path forward.