What GHG Protocol's Proposed Scope 2 Changes Mean for Your Carbon Footprint

For most UK companies, the GHG Protocol's Scope 2 Guidance update is not a crisis. For a specific and growing subset — companies with renewable energy procurement, power purchase agreements, or market-based Scope 2 claims — it could require meaningful changes to how their carbon footprint is calculated and reported. And for anyone who uses a carbon accounting platform, it matters whether your tool is tracking these developments or not.

The GHG Protocol's public consultation on revised Scope 2 Guidance closed on 31 January 2026. A second consultation is planned for later in 2026, with the final revised standard expected in 2027. This is the first major update to the Scope 2 Guidance since it was published in 2015 — and several of the proposed changes reflect a decade of practical experience with how market-based instruments have been used, and sometimes misused, in corporate carbon accounting.

The basics: what is Scope 2, and how does it work now?

Scope 2 covers indirect emissions from the generation of purchased electricity, heat, steam, or cooling that a company consumes. Under the current GHG Protocol guidance, companies must report Scope 2 using two methods:

The location-based method uses average grid emission factors for the country or region where electricity is consumed. For UK companies, this means using the DESNZ grid emission factor for the relevant reporting year. This method is simple and consistent, but it does not reflect whether a company has procured renewable energy.

The market-based method allows companies to use emission factors from energy contracts — specifically, the emission factors associated with the electricity products or certificates they have purchased. A company with a renewable energy tariff or a power purchase agreement (PPA) can use a lower (or zero) emission factor under the market-based method, reflecting the renewable content of its supply.

Both methods must be reported. The difference between the two is increasingly used by companies to demonstrate the impact of their renewable energy procurement decisions.

What the consultation proposes

The 2026 consultation proposes several significant changes to the Scope 2 Guidance. The most discussed is the hourly matching requirement for market-based instruments.

Currently, a company can claim market-based Scope 2 benefits from renewable energy certificates (such as REGOs in the UK, or GOs in Europe) without any requirement that the certificate matches the time at which the electricity was consumed. A company could buy an annual bundle of REGOs representing solar generation in summer and claim renewable energy benefits for electricity consumed at 3am in January.

The proposed hourly matching requirement would change this: for a market-based instrument to be valid under the revised guidance, the renewable generation it represents would need to match the time period (hour) when the electricity was consumed. This is a significantly higher bar than the current annual or monthly matching approaches.

Additional proposed changes include:

Updated emission factor hierarchy. The revised guidance would establish a clearer priority ordering for which emission factors market instruments can use, with preference given to instruments that are specific to the generation source, location, and time of production.

Deliverability requirement. Market instruments would need to represent electricity that is physically deliverable to the grid where the buyer is located — ruling out claims based on generation in a different power market with no transmission connection.

Retained dual reporting. Despite some speculation that the update might move to a single method, the proposed revisions retain the requirement for both location-based and market-based reporting.

Who is affected — and who isn't

The practical impact of the proposed changes depends almost entirely on how a company currently approaches its Scope 2 reporting.

If you report only location-based Scope 2, the proposed changes have no immediate impact. You are not using market instruments, so the hourly matching requirement does not apply. Your Scope 2 methodology is unchanged under both the current and proposed guidance.

If you report market-based Scope 2 using a standard renewable energy tariff (such as a 100% renewable tariff from a UK energy supplier backed by REGOs), the proposed changes would affect the validity of that approach under the revised guidance. REGO-backed tariffs do not currently meet hourly matching requirements, and the proposed guidance would likely require disclosure of this limitation — or a switch to instruments that do meet the hourly matching standard.

If you have a direct PPA with a specific renewable generator (a solar farm or wind site), the impact depends on whether that PPA includes hourly matching provisions. Many newer PPAs do include these provisions — this is an active area of commercial negotiation in the UK energy market — but older or simpler PPAs may not. Companies with legacy PPAs may need to renegotiate terms to maintain market-based Scope 2 validity under the revised standard.

If you are making public net zero commitments based on market-based Scope 2 figures, the robustness of those commitments will be scrutinised against the revised standard once it is finalised. Companies that have been communicating "100% renewable electricity" credentials based on annual REGO certificates should review whether that claim will hold under the revised framework.

The UK market context

In the UK, the energy certificate landscape is dominated by REGOs (Renewable Energy Guarantees of Origin). REGOs are issued on a monthly rather than hourly basis, and there is currently no UK infrastructure for hourly certificate matching at the scale required for broad corporate use.

The proposed hourly matching standard, if adopted in its current form, would effectively require UK companies seeking valid market-based Scope 2 claims to either hold PPAs with hourly matching provisions, or wait for a UK certificate infrastructure that supports hourly granularity to develop. Neither option is straightforward for most SMEs.

The second consultation, expected later in 2026, will be critical — it is likely to address precisely these practical implementation questions. The GHG Protocol review process has historically been responsive to practical barriers, and it is plausible that the final standard will include transition provisions or alternative compliance pathways for markets without hourly certificate infrastructure.

What UK companies should do now

The final revised standard is not expected until 2027. Mandatory adoption will follow the updated guidance in most reporting frameworks. This means there is a genuine window to prepare — but not an unlimited one.

Understand your current Scope 2 approach. Know whether you are reporting market-based Scope 2, and if so, what instruments you are using. If you are using a standard renewable tariff backed only by REGOs, you should be aware that this approach may not be valid under the revised guidance and plan accordingly.

Review your renewable energy contracts. If you have a PPA, check whether it includes hourly matching provisions. If it doesn't and you want to maintain a valid market-based Scope 2 claim under the revised standard, this is the time to discuss terms with your energy provider.

Watch the second consultation. This will set the implementation timeline and clarify the transition provisions. If you want CYF's view on the second consultation's implications for UK companies, subscribe to our methodology updates — we will be publishing our analysis when the consultation opens.

Be transparent in the interim. Until the final standard is published, the most defensible approach is to report both location-based and market-based figures, clearly describe the instruments used for your market-based claim, and note that your methodology may be updated once the revised GHG Protocol guidance is finalised. This is consistent with good practice guidance from the GHG Protocol itself during consultation periods.

Why this matters for carbon accounting platforms

The GHG Protocol Scope 2 revision is not just a regulatory development — it is a test of whether carbon accounting tools stay current with methodology evolution. A platform that calculates market-based Scope 2 using last year's REGO approach without flagging the proposed changes is providing its users with data that may not be valid under a standard finalised 12 months from now.

CYF tracks GHG Protocol methodology developments as part of our standard platform maintenance. Our Scope 2 calculations use current DESNZ grid factors for location-based reporting, and we will update our market-based methodology guidance as the revised standard moves through consultation towards finalisation. Where the final guidance introduces requirements that affect how our users report, we will communicate those changes clearly, with sufficient lead time for clients to update their approach.

Alice Roberts is Head of Methodology at Compare Your Footprint. CYF maintains platform methodology aligned with GHG Protocol standards and DESNZ guidance. For questions on how the Scope 2 revisions may affect your carbon footprint, contact our methodology team.