Introduction

The GHG Protocol is moving toward two market-based Scope 2 methods: Method 1, which requires hourly matching, deliverability, and incrementality, and Method 2, which keeps the 2015 rules until a transition date still to be set. The final requirements will sit inside a joint GHG Protocol-ISO Corporate Standard slated for publication in Q4 2028. For companies whose reported Scope 2 relies on certificates bought far from where they consume power, the gap between their two Scope 2 figures is likely to become a disclosure question.

Key Takeaways

• The 2025 consultation draft kept dual reporting under the location-based and market-based methods. Whether market-based reporting stays mandatory is still open.
• Two market-based methods are proposed. Method 1 adds hourly matching, deliverability, and incrementality; Method 2 keeps the 2015 rules until a date still to be determined.
• Under current proposals, purchases that do not qualify could be reported through the AMI impact and indicator statements.
• A consolidated public consultation is slated for Q2 2027, and the joint GHG Protocol-ISO Corporate Standard for Q4 2028.

What Is the GHG Protocol Scope 2 Revision and Why Is It Happening?

The GHG Protocol is revising its 2015 Scope 2 Guidance to address a credibility gap in the market-based method. Under current rules, companies can report reductions from clean energy projects on grids disconnected from their operations. The 2025 consultation draft kept dual reporting and tightened the rules for contractual instruments. Whether market-based reporting stays mandatory is still open.

Location-Based vs. Market-Based Method: The Dual Reporting Requirement

Companies report Scope 2 emissions from purchased electricity two ways:

• Location-based method: reflects the emissions of the grid where electricity is consumed.
• Market-based method: reflects contractual instruments, such as energy attribute certificates (EACs).

The 2025 consultation draft kept this structure, including dual reporting under both methods. The October 2026 update leaves open whether companies shall, should, or may report under the market-based method, so dual reporting is not yet guaranteed in the final standard.

The Disconnect Problem in the 2015 Scope 2 Guidance

The GHG Protocol states that, under the current market-based method, companies can report emissions reductions from clean energy projects on grids disconnected from their operations. In its words, this reduces the accuracy and credibility of reported emissions. The revision aims to tie market-based claims back to the grids that actually supply a company’s facilities.

What Did the 2025-2026 Scope 2 Public Consultation Propose?

The consultation draft proposed two core conditions for energy attribute certificates in the market-based method: hourly matching and deliverability. The consultation ran from October 20, 2025 to January 31, 2026 and received nearly 1,100 responses from 56 countries. Feedback divided into two competing theories of change on how procurement drives decarbonization.

Hourly Matching and Deliverability Defined

The draft would have allowed certificates in the market-based method only if they were:

• Hourly matched: contractual instruments matched to electricity consumption on an hourly basis, with exemptions proposed for smaller organizations.
• Deliverable: sourced from generation deemed deliverable to the grid region where the company consumes electricity.

Two Theories of Change: Grid Impact vs. Market Access

The GHG Protocol grouped the feedback into two camps:

• Theory of change 1: hourly-matched, same-grid, recently built clean power makes it more likely that corporate demand supports new clean generation.
• Theory of change 2: annual matching and broad geographic boundaries keep barriers low and support a large, active EAC market.

Both views shaped the dual-method approach now in development.

AI Data Center Electricity Demand and Scope 2 Accounting Pressure

Accounting precision matters more as electricity demand climbs. The IEA projects that global data center electricity demand will more than double by 2030 to around 945 TWh. Microsoft’s FY2025 disclosure shows the effect on reported figures: total emissions rose 25%, driven by data center expansion and an end to non-additional unbundled certificates.

IEA Projections for Data Center Electricity Demand

The International Energy Agency’s Energy and AI report (April 2025) sets the scale:

• Global data center electricity demand is projected to more than double by 2030, to around 945 TWh.
• That is slightly more than Japan’s entire electricity consumption today.
• In the United States, data centers are on course to account for almost half of electricity demand growth through 2030.

As electricity becomes a larger share of corporate footprints, the method used to count it carries more weight.

Case Example: Microsoft’s Scope 2 Share Rises from 2% to 13%

Microsoft’s 2026 Environmental Sustainability Report, as reported by ESG Dive, shows what happens when a company changes its certificate strategy:

• Total emissions rose 25% year over year in fiscal 2025.
• Microsoft attributed the rise mainly to data center expansion and to ending its use of non-additional unbundled renewable energy certificates.
• Scope 2 grew from 2% of total emissions in the prior fiscal year to 13% in FY2025.

Scope 2 Market-Based Method 1 vs. Method 2: Key Differences

The GHG Protocol is developing two market-based methods with different requirements and claims. Method 1 adds hourly matching, deliverability, and incrementality. Method 2 keeps the 2015 Scope 2 Guidance requirements so companies can continue current procurement strategies. The ISB indicated majority support for this dual framework at its July 2026 meeting.

Method 1: Hourly Matching, Deliverability, and Incrementality

Method 1 reflects theory of change 1. It would add three requirements:

• Hourly matching of certificates to consumption.
• Deliverability from the grid region where electricity is consumed.
• Incrementality, meaning generation from recently built plants.

Method 2: Continuity with the 2015 Scope 2 Guidance

Method 2 reflects theory of change 2. It would:

• Keep the existing 2015 Scope 2 Guidance requirements.
• Let organizations continue their current procurement strategies.
• Reflect stakeholder views that low barriers to market participation support a large, active EAC market.

Whether either method becomes optional or required is still an open question.

How Will the Transition from Method 2 to Method 1 Work?

The ISB’s proposed direction allows Method 2 until a date still to be determined, while recommending Method 1. Before that date, companies must disclose which method they apply. After it, companies reporting market-based emissions must use Method 1 where qualifying data exists. Whether companies shall, should, or may report under the market-based method at all remains open.

The Three Options the ISB Considered

At its September 2026 meeting, the ISB weighed three ways to run a dual framework:

1. Two methods with different metrics: tCO2e and a second metric still to be defined.
2. Two methods, both in tCO2e, in perpetuity.
3. Two methods, both in tCO2e, with a phased transition from Method 2 to Method 1.

The ISB assessed each option against the GHG Protocol’s decision-making criteria of integrity, impact, and feasibility.

Disclosure Obligations Before the Transition Date

Under the direction the ISB proposed, companies that report market-based Scope 2 emissions would:

• Before the transition date: be permitted to use Method 2, be encouraged to use Method 1, and be required to disclose which method they apply.
• After the transition date: be required to use Method 1 if data meeting the quality criteria is available.

This is a proposed direction, not a final rule. The Scope 2 Technical Working Group will refine it before the ISB reviews it again.

The AMI Multi-Statement Reporting Framework Explained

Under current proposals, electricity purchases that fail future market-based requirements could still have a reporting pathway. The Actions and Market Instruments workstream proposes three statements beyond the physical inventory: a market-based GHG inventory statement, a GHG impact statement, and a non-GHG indicators statement. The ISB noted non-qualifying instruments may appear in the impact statement or as key indicators.

Market-Based GHG Inventory Statement

This statement would report contractual arrangements, procurement choices, environmental attributes, and certificates. It sits alongside the physical GHG inventory a company already reports.

GHG Impact Statement and Non-GHG Indicators

• GHG Impact Statement: reports the real-world emissions impact of a company’s actions and interventions, inside and outside its value chain.
• Non-GHG Indicators Statement: reports investment and procurement indicators that show decarbonization effort but are not counted as greenhouse gas emissions.

The GHG Protocol reports strong support for this multi-statement approach in feedback to its AMI Request for Information. For executives, it means today’s certificate purchases could still be disclosed under current proposals, even if they do not qualify under Method 1.

When Will the Joint GHG Protocol-ISO Corporate Standard Take Effect?

The Scope 2 Technical Working Group held an in-person workshop on October 20-22, 2026 in Washington, DC to refine proposals on deliverability, incrementality, feasibility, and timing. A consolidated public consultation covering Scope 1, 2, 3, and AMI is slated for Q2 2027. The joint GHG Protocol-ISO Corporate Standard, which integrates ISO 14064-1, is slated for Q4 2028.

The joint GHG Protocol-ISO Corporate Standard is slated for publication in Q4 2028. It will combine the GHG Protocol’s Scope 1, Scope 2, Scope 3, and AMI standards with ISO 14064-1 into a single, co-branded corporate standard.

Key milestones:

• October 20, 2025 to January 31, 2026: Scope 2 public consultation.
• July 2026: ISB majority supports two market-based methods.
• October 20-22, 2026: Scope 2 Technical Working Group in-person workshop in Washington, DC (outcomes not yet published).
• Q2 2027: Consolidated public consultation on the joint standard.
• Q4 2028: Joint GHG Protocol-ISO Corporate Standard publication.

What Remains Undecided

• The date when Method 1 becomes required for market-based reporting.
• Whether companies shall, should, or may report under the market-based method at all. This open bracket concerns market-based reporting itself, not the wording of Method 1 or Method 2.
• Final rules on deliverability, incrementality, feasibility, and implementation timing.
• Final exemption thresholds for smaller organizations. The consultation draft proposed exemptions as a feasibility measure, and no final figures have been published.

How Should Executives Prepare Their Scope 2 Strategy Now?

Final rules are still in development, yet the direction points toward hourly, grid-specific evidence for market-based claims. Executives can use the window before the Q2 2027 consultation to assess hourly consumption data, map facilities to grid regions, review certificate portfolios against Method 1 criteria, and prepare to disclose which method they apply.

Each action below maps to a requirement in the GHG Protocol’s current proposals.

Four Readiness Actions

1. Assess your hourly data position. Method 1 would require certificates matched to hourly electricity use. Check whether you have hourly load data, whether the load profiles proposed as a feasibility measure could approximate it, and whether you may fall under a likely exemption threshold for smaller organizations.
2. Map facilities to grid regions. Deliverability ties certificates to the grid where electricity is consumed, so each site needs a defined grid region.
3. Review the certificate portfolio. Identify which current purchases would meet hourly matching, deliverability, and incrementality, and which would fall under Method 2.
4. Prepare method disclosure. Before the transition date, companies reporting market-based emissions would need to state whether they use Method 1 or Method 2.

Under current proposals, purchases that do not qualify could be reported in the AMI impact or indicator statements, which would keep the procurement story visible to investors and stakeholders.

Conclusion: Prepare for Hourly, Grid-Specific Scope 2 Evidence

The GHG Protocol’s direction is clear even as details remain open. Market-based Scope 2 claims are heading toward hourly matching, deliverability, and incrementality under Method 1, with Method 2 proposed only until a transition date. Companies that build the data foundation now will have more options when the consolidated consultation opens in Q2 2027.

ASUENE helps executive teams act on this shift:

• Deploy carbon accounting that supports dual Scope 2 reporting under the location-based and market-based methods with ASUENE.
• Capture granular energy data for hourly matching readiness with NZero.
• Review renewable certificate and carbon credit procurement strategy with CarbonEX.

Contact ASUENE to assess your Scope 2 readiness and start building a Method 1-ready carbon accounting program.

Why Work with ASUENE Inc.?

ASUENE is a key player in carbon accounting, offering a comprehensive platform that measures, reduces, and reports emissions, including Scope 1-3. ASUENE serves over 56,000 clients worldwide, providing an all-in-one solution that integrates GHG accounting, ESG supply chain management, a Carbon Credit exchange platform, and third-party verification.

ASUENE supports companies in achieving net-zero goals through advanced technology, consulting services, and an extensive network.