Modernizing GHG Accounting Rules and Climate Leadership Programs

The paper identifies three fundamental flaws in the current GHG Protocol Scope 2 Market-Based method: it fails to accurately measure emissions based on the timing and location of electricity use, it does not value firm CFE and balancing resources, and it does not prioritize actions that reduce real-world emissions. To address these, the authors propose five key improvements: implementing location-matching based on deliverability, adopting hourly time-matching, treating all forms of CFE (compliance, non-bypassable, and voluntary) equally, ensuring EACs are allocated to those who financially support them, and removing 'grid CFE' from inventories unless substantiated by EACs. The authors also suggest establishing a standardized 'Baseline' CFE score for utility service areas to better distinguish between required and voluntary procurement efforts.

• The current Scope 2 Market-Based method is disconnected from the physical realities of the grid, allowing companies to report zero emissions by purchasing unbundled renewable energy certificates (RECs) from distant locations that do not match the timing or location of their actual consumption.
• To improve accuracy, Market-Based inventories (MBIs) should adopt more granular geographic boundaries. The authors suggest using the regions defined in U.S. clean hydrogen rules or the same regional grid/balancing authority as the load as a starting point.
• The authors recommend moving from annual to hourly accounting to better reflect the variability of emissions and create demand for a diverse mix of CFE resources, including firm CFE and storage, to balance supply and demand.
• There is a need for 'CFE Equality,' where compliance CFE, utility non-bypassable CFE, and voluntary CFE are counted equally in MBIs, provided they meet location and time-matching criteria.
• EACs should be treated as property rights and allocated to the customers who financially support the underlying generation to prevent 'cost shifting,' where companies claim CFE they did not purchase.
• The authors argue that 'grid CFE' (carbon-free electricity in the general grid mix without associated EACs) should be removed from MBIs to prevent double counting and ensure that only those who purchase EACs can claim CFE use.
• When EACs are not available, the authors propose a specific hierarchy for applying fossil emission factors, prioritizing plant-specific data, then supplier-specific factors, and finally regional fossil-only rates, rather than using total output system average factors like eGRID.
• The document proposes the use of a standardized 'Baseline' CFE score for utility service areas to distinguish between the CFE a customer is required to purchase via standard service and the additional CFE they procure voluntarily.

APA

Fisher, N., Kaplan, I., Ferenczi, T., Cohen, A., & Pablo, J. (2024). Modernizing GHG Accounting Rules and Climate Leadership Programs. Clean Air Task Force. https://cdn.catf.us/wp-content/uploads/2024/05/08144937/modernizing-ghg-accounting-companies-carbon-free-electricity.pdf

Chicago

Fisher, Neil, Iain Kaplan, Toby Ferenczi, Armond Cohen, and Jeanette Pablo. Modernizing GHG Accounting Rules and Climate Leadership Programs. Clean Air Task Force, 2024. https://cdn.catf.us/wp-content/uploads/2024/05/08144937/modernizing-ghg-accounting-companies-carbon-free-electricity.pdf.

Wikipedia

{{cite report |last1=Fisher |first1=Neil |last2=Kaplan |first2=Iain |last3=Ferenczi |first3=Toby |last4=Cohen |first4=Armond |last5=Pablo |first5=Jeanette |title=Modernizing GHG Accounting Rules and Climate Leadership Programs |publisher=Clean Air Task Force |date=May 2024 |url=https://cdn.catf.us/wp-content/uploads/2024/05/08144937/modernizing-ghg-accounting-companies-carbon-free-electricity.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fisher2024modernizing, author = {Fisher, Neil and Kaplan, Iain and Ferenczi, Toby and Cohen, Armond and Pablo, Jeanette}, title = {{Modernizing GHG Accounting Rules and Climate Leadership Programs}}, institution = {Clean Air Task Force}, year = {2024}, month = may, url = {https://cdn.catf.us/wp-content/uploads/2024/05/08144937/modernizing-ghg-accounting-companies-carbon-free-electricity.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }