GHG Protocol gets 800+ responses to Scope 2 consultation

Second Scope 2 consultation is in the pipeline, as inaugural Land Sector & Removals Standard is released

The GHG Protocol received more than 800 responses to its consultation on how it should redesign Scope 2 accounting, which closed on the weekend.

Its proposal for calculating emissions from the generation of electricity, steam, heating, and cooling will have major implications for the thousands of companies disclosing against the carbon accounting standards.

For the past decade, GHG Protocol has allowed firms to lower their official Scope 2 emissions by buying renewable energy certificates (RECs) and Energy Attribution Certificates, or signing virtual power purchase agreements.

That means a company can use energy from a grid fed by various sources, but take credit for the emissions associated with the REC (or equivalent) instead.

Those REC emissions could be generated in another country, and/or from an energy source that doesn’t exist in the place the business is actually consuming electricity.

The result has been years of greenwashing accusations, and concerns that the final numbers are artificially engineered and don’t reflect the electricity companies are really using.

In response, GHG Protocol wants to tighten the rules so that companies can only ‘offset’ their actual emissions with RECs (etc.) that come from the same grid, and were generated within the same hour.

In other words, companies would be allowed to take credit only for the green portion of the energy being fed into their grid when they are using it.

The approach has its supporters and critics.

In the former category is the 24/7 Carbon Free Coalition: a group founded by Google, Vodafone, AstraZeneca, AirTrunk, Shree Cement and IronMountain.

In the latter is Amazon, General Motors, Hannon Armstrong, Heineken, Intel, Rivian, Salesforce and Workday.

They’ve got a group called Emissions First, which argues that companies should prioritise allocating capital to green energy sources in countries with dirtier grids, because that helps to accelerate global decarbonisation.

Many businesses want to keep the existing Scope 2 rules.

Consequential accounting

The GHG Protocol also closed a consultation on ‘consequential’ carbon accounting in the electricity sector on the weekend, to which it received more than 100 responses.

While the Scope 2 standard focuses on how to attribute emissions to different entities, ‘consequential’ accounting centres on how much impact a company has on overall emissions through specific projects or actions.

A spokesperson for the GHG Protocol told Real Economy Progress it would “need time to comprehensively review the responses” submitted to both consultations, and would summarise the feedback for stakeholders “in the coming months”.

A second public consultation “is forthcoming” for the Scope 2 work, she added.

Land Sector & Removals Standard

The GHG Protocol has also just released its first Land Sector & Removals Standard.

It provides detailed accounting requirements for companies who want to quantify, report and monitor their emissions and CO₂ removals for the land sector – including land management, land use change, carbon removals stored within land, and emissions from biogenic products.

The framework allows them to be added into corporate mitigation strategies, which in turn impacts how FLAG targets can be set and evaluated.