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Are your Scope 2 calculations location-based or market-based?

The GHG Protocol defines 2 methods for Scope 2 calculation

  1. The market-based method shows a business’s electricity emissions in the context of the electricity products it purchases, including renewable energy certificates (RECs)..
  2. The location-based method calculates emissions based on the average emissions intensity of the electricity grid(s) it relies on to operate.

Trace uses the location-based approach, unless specifically directed by the customer. This means we consider ‘carbon neutral’ electricity as zero emissions and use the location-specific emissions factor for any non-carbon neutral grid electricity.  We define ‘carbon neutral’ electricity as ‘Green Power’, certified carbon neutral energy plans from retailers, PPAs, LGCs and ‘behind the meter’ renewable energy generated on site (e.g. solar panels).

Additional notes

  • If a company purchases RECs, they must report using both methods. If not, the location method is used.
  • Behind the meter (BTM) usage of renewable generation is treated as zero emissions under both location- and market-based methods, provided no LGCs were created, transferred or on-sold for that generation.
  • Exported electricity can be converted into CO2-e and deducted from gross electricity emissions under the market-based method only.