The Greenhouse Gas (GHG) Protocol is regarded as the “gold standard” for corporate carbon accounting. However, as energy markets and sustainability reporting evolve and climate targets tighten, the rules must adapt. A major overhaul is currently underway, led by four technical working groups established in September 2024. While most of the work is still in the early stages, there have been notable updates regarding proposed Scope 2 changes, specifically around RECs or other contractual instruments used to reduce disclosed emissions.
Here is a summary of what you need to know before the current public consultation closes on January 31, 2026.
Hourly Matching and Deliverability Requirements
Historically, companies could purchase unbundled Renewable Energy Certificates (RECs) or Energy Attribute Certificates (EACs) from any time in a reporting year to “offset” their consumption. The proposed updates move toward hourly matching, requiring RECs to be issued and redeemed for the same hour the energy was actually consumed.
Furthermore, the Market Boundary Requirement is becoming stricter. Under the new rules, companies must purchase energy from generators that could “plausibly deliver” electricity to their specific location via a connected grid, rather than buying “green” attributes from a different region that could not deliver the electricity or an unrelated power market. For the location-based method, a new hierarchy will prioritize the most precise spatial and temporal data that is publicly available.
The combination of both hourly matching and market boundary requirements means that in the future, bundled RECs may be more prevalent in the future. While these contracts are typically much more expensive than unbundled options, they provide confidence that they will be eligible for the new standards’ eligibility.
Proposed Exemptions to Hourly Matching
To ensure the new reporting requirements are feasible for all organizations, the proposed Scope 2 updates include several exemptions and transitional measures, particularly concerning the shift to hourly matching. These proposals consider setting exemption thresholds for smaller organizations or those with annual electricity consumption below a specific, yet-to-be-defined limit. Furthermore, a “legacy clause” is being considered for existing contractual instruments and arrangements to allow for a smoother transition without penalizing prior investments. Other tools to support implementation include the use of “load profiles” which would allow companies to estimate hourly data from annual or monthly records, and a multi-year phased implementation schedule.
Other Market-Based Updates
The proposed revisions clarify rules for electricity not covered by specific contracts. For Standard Supply Service (SSS), where companies previously lacked an explicit cap, the new guidance requires that entities claim no more than their pro-rata share of these shared resources.
In addition, the definition of “residual mix” is being considered for update. The update would eliminate the practice of defaulting to a standard location-based average when residual mix emission factors are missing. Instead, reporters must use a fossil-only emission factor (e.g., gas, oil, or coal) to ensure non-renewable energy is accurately represented and to prevent the double-counting of green attributes.
What’s Next?
While these changes increase the data burden, requiring more granular fossil-based emission factors and hourly load profiles, they are designed to eliminate “greenwashing” and ensure that corporate claims reflect physical reality. Small and medium-sized enterprises (SMEs) and companies with low annual consumption may see certain exemptions to ease this transition, but the direction of travel is clear that greater precision and higher accountability for reporting entities are coming.
Ensure your voice is heard; the GHG Protocol is accepting public comments through the end of January 2026.
