In the GHG Protocol, Scope 2 emissions can be calculated in two different ways:
✔️ Location-Based: Reflecting the average grid emission factors where the electricity is consumed.
✔️ Market-Based: Reflecting emissions from the contractual instruments a company has purchased (e.g., renewable energy certificates, power purchase agreements, supplier-specific emission factors).
While this is a key issue and methodological decision for Scope 2 Emissions, it is also relevant for Scope 3. For example:
🏭 Your Tier 1 suppliers may use contractual instruments to reduce their reported electricity emissions.
📝 Your leased assets or other value chain partners could also be engaged in market-based electricity procurement.
This means that Scope 3 reporting is not just about collecting “activity data”—it also requires understanding whether those upstream or downstream partners are applying location-based or market-based Scope 2 methods in their own footprints.
However, conventionally it is difficult for companies to manage and calculate the difference between Location-Based and Market-Based Scope 3 Accounting.
✅ With ClimateTab, we have developed our software exactly to do that. At the click of a button, ClimateTab will ensure you are able to:
⚡Calculates both location-based and market-based Scope 2 emissions.
⚡Applies market-based accounting consistently across your Scope 3 supply chain, so you can see the true impact of supplier RECs, PPAs, or grid mixes.
🌍 Learn more at https://climatetab.com
