Scope 2 emissions
Indirect emissions associated with generating purchased electricity, steam, heat or cooling used by an organisation.
Example
Purchased grid electricity is a common example.
The catch
Location-based and market-based methods answer different accounting questions.
In more depth
Scope 2 emissions, explained.
Scope 2 emissions are usually reported twice, and the gap between the two figures says a lot about a company's energy purchasing. The GHG Protocol asks for a location-based figure, using the average emission factor of the grids a company draws from, and a market-based figure that reflects the contracts it holds, such as supplier tariffs, power purchase agreements and energy attribute certificates.
The market-based number can fall close to zero through certificate purchases while the electricity reaching the building stays the same. That is legitimate under current rules. Critics argue that cheap certificates from existing plants do little to bring new clean power onto the grid, and buyers who want a stronger claim look for contracts with new projects on the same grid, matched more closely in time to consumption. Those questions echo the debate about additionality in carbon markets.
Boundaries matter here too. Electricity a company generates itself from an owned gas engine belongs in Scope 1 emissions, while transmission losses and the upstream emissions of fuels sit in Scope 3. A sound disclosure shows both Scope 2 figures side by side, names the instruments behind the market-based one and says where they came from.