GHG Protocol Scope 2 Hourly Matching: Market Analysis and FAQ

The GHG Protocol is preparing to fundamentally change how companies account for their electricity emissions. As practitioners working daily in renewable energy markets, we see how these changes could unintentionally undermine the very climate progress they aim to accelerate.

The problem: The proposed hourly and local matching requirements, while well-intentioned, threaten the corporate long-term contracts, like power purchase agreements (PPAs), that have become the backbone of renewable energy financing. These contracts give developers the revenue certainty to build new projects, and without them, the financing pipeline for wind and solar weakens. The timing couldn’t be worse in the U.S.: just as federal clean energy tax incentives are being scaled back, new accounting rules could deal a second blow by driving down corporate demand for the very contracts that stand up new clean energy capacity.

Others are sounding the alarm: The Clean Energy Buyers Alliance wrote that “imposing stricter time and location accounting requirements at the organizational level is inefficient and infeasible for most buyers and may curtail ambitious global climate action…undermin[ing] the relevance and impact of the Protocol, reverse more than a decade of progress, and jeopardize future global climate action.” Their concerns align with feedback from across the market.

Our response: Some members of the GHG Protocol working group who are in favor of requiring hourly+local matching have published an FAQ on EnergyTag’s blog to explain the proposed changes and address misunderstandings. Their piece suggests there is little reason for concern. We respectfully disagree. What follows is our exhaustive response to those same questions through three lenses: emissions accounting accuracy, climate impact, and market feasibility.

Is this forcing buyers to do 100% hourly matching, i.e. 24/7 carbon-free energy (CFE)?

Formally no; functionally yes. The update changes how Market-Based Method (MBM) claims are counted (you may only use Renewable Energy Certificates or RECs that match the hour and location of usage). But pressure will remain to sustain “zero” Scope 2 goals and narratives and GHG Protocol is the foundation of target-setting frameworks like SBTi which has proposed 100% hourly-matched targets (aka, 24/7 CFE).

EnergyTag (ET) said: “No. GHGP is not a target-setting body, and does not require companies to set any particular targets for their procurement.”

• GHG Protocol doesn’t operate in a vacuum: The GHG Protocol is not just a voluntary standard. It is the rule set that underpins government policy globally and all GHG reporting including target-setting frameworks like SBTi which has proposed a move to hourly/location matching and requiring companies to cover 100% of their scope 2 emissions with zero-carbon electricity.
• 100% RE will remain a common claim. Companies under the proposed carve-outs will not have to hourly match RECs and will more easily continue making 100% renewable claims. Other companies may leverage new blended 24/7 offerings from utilities that include existing hydro and nuclear to achieve 100% hourly matching. Both send a signal to the market that 100% remains a reasonable and achievable target.

ET: “this increases the credibility and comparability of inventory emissions claims”

• Credibility ≠ accuracy: By limiting more extreme mismatches, hourly matching may improve the perception of credibility of usage claims. But because grid physics make tracing impossible, the inventory is no more verifiable than under annual matching. Claiming accuracy perpetuates a misunderstanding about how electricity is delivered based on a false concept of flowing electrons rather than the maintenance of charge on a connected wire.
• Granularity ≠ decarbonization: More precise matching does not guarantee emissions impact. Hourly RECs from spot markets, nuclear, or hydro may look better on paper, but they do little to enable new projects or accelerate decarbonization. In contrast, long-term PPAs with new solar and wind are the proven driver of impact yet are weakened under hourly accounting.
• The real credibility gap: The problem long identified by press and research is that cheap, unbundled RECs often do little to enable new projects. Instead, they allocate credit for clean generation that would have happened anyway. Companies have responded: in 2023, over 800 U.S. buyers used long-term contracts like power purchase agreements (PPAs) to address this issue. Hourly matching does not fix this problem. In fact, it can shift demand away from PPAs that finance new builds toward existing nuclear or hydro to meet 24/7 targets. The key question is whether purchases materially accelerate clean energy deployment. If not, the accounting method, whether hourly or annual, will not restore credibility.

ET: “studies have found can be just as cost-effective as 100% annual goals”

• It will cost more. Saying it will be just as cost-effective as 100% annual goals does not align with the analysis and research. Princeton ZERO Lab’s system-level impact analysis of hourly matching said, “Hourly matched procurements reduce system-level emissions but at a cost premium.” The exact premium depends on the region and the percentage matching.
• Soft costs make things even worse. The added costs will be even higher for companies still able to use long-term forward contracts like PPAs. A company that can use one PPA to cover many regions today would need to use multiple PPAs in each region, each with their own fixed costs. These soft costs and how they may compound with a shift to hourly matching is typically not consider in studies. When they are, the benefits of hourly matching are less glowing.

ET: “companies can continue to pursue procurement strategies that best suit their organizations” … “but they would report their market-based inventory emissions based on the updated standard”

• Meeting sustainability goals is the main objective. Saying that companies can still do as they wish but that it may just not count towards their sustainability goals makes no sense. We should be careful to assume companies will accept the cost and risk associated with buying renewable energy if it doesn't accrue to meeting ambitious sustainability targets.
• Hourly matching will make long-term contracts less accessible. As detailed in our paper and expanded in other questions below, requiring hourly and local matching of RECs will make long-term contracts like PPAs impossible to use for some buyers. This is bad. These contracts have long been recommended by GHG Protocol, SBTi, RE100, and the industry at large as providing meaningful support to build more projects. Instead of doing anything to incentivize the use of long-term contracts, the proposed updates are adding new barriers.

Won’t forcing small businesses to do hourly accounting reduce participation?

Likely. There are real burdens from hourly accounting. And while carve-outs help micro-loads, they (1) do not address risks for mid-tier loads, (2) reduce comparability across companies and sites, and (3) do not exist in other frameworks like SBTi eroding their overall value.

EnergyTag (ET) said: “[The proposed update] would allow companies with consumption below a threshold (e.g., 5-10 GWh in a given region) to continue to do annual accounting.”

• Carve-outs prove there is a burden. Exempting < 5-10 GWh buyers acknowledges the proposed changes come with added burdens for buyers. Buyer associations and surveys of buyers have also said the burden is real with ~80% of customers expressing doubt they can procure time-matched CFE within smaller boundaries.
• Location matching is not part of the carve-out. Carve-outs do not change requirements that companies only source RECs locally. Time matching is only part of the challenge and threat to long-term forward contracts.
• Carve-outs are not universal. SBTi’s draft v2.0 does NOT offer a carve-out, meaning many companies “exempt” under GHGP could still be forced into hourly matching to keep their targets, eroding the value of the exemption. Is GHGP working with SBTi to make carve-outs universal?
• Downgraded participation is also bad. Forcing small businesses to only buy locally means they can not aggregate demand and costs across regions so they can use long-term contracts. Some will be forced to abandon PPAs and downgrade to spot-market purchases which does little to help with project financing.
• Pressure will remain. If GHG Protocol is saying that the only way to do scope 2 accounting with integrity is with hourly matching, market and peer pressure will persist on even small companies to comply even if they are not required to (just as happened with the use of PPAs over the last 10 years).

ET: “A recent CDP company disclosure report states that “A subset of only 7% of these companies accounts for more than 76% of the electricity purchasing”

• And yet, changes apply to much more. The 7% are mostly large multinationals already using long-term contracts. The other 93% are smaller buyers, for whom rigid hourly rules would raise costs and reduce participation without adding impact. If the Protocol’s goal is global decarbonization, it should focus on expanding access and preserving PPAs, not restricting them.

ET: “It is to be expected that in the transition period towards the standard’s implementation, both software tools for granular accounting and hourly-matched CFE products of electricity suppliers will become increasingly available“

• Software can’t fix everything. While data accessibility remains a challenge, the transaction and assurance costs of multiplying PPAs across regions remains and is not one that software can fix.

Isn’t hourly accounting very difficult?

Yes, when you take into account all the ramifications.

EnergyTag (ET) said: “No. Hourly accounting simply means collecting (or estimating) hourly electricity consumption data, collecting hourly data from purchased clean energy, and comparing them.” … “This accounting can be done today in spreadsheets.”

• Math is easy, procurement is hard. The real difficulty is not lining up numbers in a spreadsheet, it’s getting the hourly RECs that match your hourly consumption in each region in the first place. Region-bounded procurement fragments PPAs, inflates legal/credit costs, and relies on still forming granular spot markets and storage-REC standards.

ET: “Any company with a PPA in a deliverable grid will easily be able to account for it hourly, by using the hourly rather than annual aggregate generation data.”

• PPAs are not available everywhere. You cannot legally use PPAs in all regions and if buyers can only use locally generated RECs, they will be unable to use Virtual PPAs in many regions as well.
• Some RECs from a PPA would become unusable. If a company does have a PPA with a local project, they will not necessarily be able to use all of the RECs from that PPA as any production that exceeds their consumption represents unusable RECs. Companies may need to sign larger PPAs to maintain current RE claims and try to sell excess RECs in spot markets.

Won’t these requirements stop voluntary procurement due to their cost?

For some, yes. With elevated costs and complexity, it seems reasonable to expect some companies to reduce, downgrade, or stop voluntary procurement altogether.

EnergyTag (ET) said: “No. The most credible studies of the costs and impacts of hourly matching (e.g., Princeton, TU Berlin, IEA) show that buyers can procure 80-95% hourly matched clean energy at costs that are comparable to annual matching today, while 100% hourly matching comes at a premium.”

• Studies find costs will increase with hourly matching. Studies like ZERO-Lab and TU-Berlin show costs increase (even if modestly on some grids) to reach ~80-90% hourly CFE and can explode to reach 100% CFE. And these studies likely underestimate cost increases as they assume constant demand, are built on the economics of IRA-era incentives, do not include added soft costs from doing a PPA for each region, and assume mature granular certificate liquidity and storage shift-tag standards. Facing these challenges, mid-tier buyers may rationally shrink or skip PPAs and lean on spot granular certificates which weakens additionality even if headline REC volumes persist.
• Costs and impact depend on the grid: Most 24/7 CFE studies model high-renewables grids like CAISO, Denmark, or Ireland. But new research shows that hourly matching may deliver diminishing carbon benefits while incurring disproportionate cost increases, especially beyond ~85% hourly CFE. Outcomes will vary widely depending on the grid and resource mix.
• Additionality assumed. Most of these studies assume the procurement is all additional. If additionality is not required or achieved in a 24/7 metric, then it will not achieve the same impacts.
• Risk of disengagement. Once the added cost and complexity are fully understood, it’s reasonable to expect that some companies (especially small and mid-sized ones) may retreat from active procurement altogether.

ET: “A recent study focused on India found that 70% hourly matching can be achieved more cheaply than 100% annual matching, while having a greater decarbonization impact and significant cost savings”

• What is the cost above 70% hourly-matched? Multiple studies find that you need >90% hourly matching to reduce emissions more than 100% annual matching. Comparing 100% annual matching to only 70% hourly matching creates misleading conclusions about cost and impact.
• Savings for who? The savings are calculated for the power system and grid operators, not necessarily for individual corporate buyers. C&I consumers finance the new capacity capex, while the grid enjoys most of the opex savings. Whether buyers themselves see a net cost reduction depends on how those capex and opex streams are allocated.

ET: “As mentioned above, the proposed revisions do not force companies to set any particular procurement targets or voluntary procurement strategies, but rather to account for their emissions more accurately.“

• You don’t have to force anything to do harm. Proposed revisions limit access and reduce the appeal of certain procurement strategies like long-term contracts which harms project financing and will mean a slower transition to renewable energy.
• It is all connected. GHGP’s standards are the foundation of target-setting bodies like SBTi, which is not only embracing hourly matching but also pushing for 100% hourly CFE targets. Companies that are able to easily achieve 100% hourly matching will add peer pressure for companies to maintain their current goals. Saying hourly matching does not force companies to set high targets misrepresents the larger picture.

How many companies are engaged in hourly matching today?

Not many buyers. EnergyTag’s list of 45 companies contains only 11 buyers. The other 34 are utilities, brokers, and software vendors that are positioned to sell hourly products. Listing early adopters and vendors demonstrates commendable momentum, but not scale. For now, “many companies already do hourly accounting” is more marketing than market reality.

Shifting to hydro and nuclear. Some companies have moved from PPAs to spot market purchases and/or green tariffs backed by existing hydro or nuclear. We struggle to see this as better than signing long-term forward contracts to enable new solar and wind.

• Digital Realty committed to 24/7 clean power for its data centers. In 2023 it became the first customer of PPC Greece’s 24/7 hourly renewable matching program, which now powers Digital Realty’s three Athens data centers with real-time matched clean electricity. It looks like the program is mostly powered by hydro (the majority of PPC’s renewable portfolio is 16 large hydro power plants). In other countries, Digital Realty has signed large PPAs with solar and wind projects.
• Mercedes-Benz signing a 24/7 PPA backed by solar, wind, and hydro is another example. A strong approach but what percentage of generation is from existing hydro?
• Other examples include Google recently signing a deal with Brookfield for hydroelectric power, Microsoft with Powerex in BC, and Entergy’s 24/7 offering which includes existing hydro and nuclear.
• Is this really better? Is it better for companies to achieve 24/7 through utility programs, backed by an undisclosed percentage of existing hydro or nuclear? And how are we accounting for emissions from hydro (reservoir methane can be sizable but is not considered in emissions factors)? It would be better for companies to sign long-term PPAs that enable more solar and wind projects even if it doesn’t match their load curve in time and space. That’s what over 800 companies did in 2023 in the U.S. alone.
• Existing hydro and nuclear may not count. If existing hydro and nuclear don’t count towards market-based inventory under new Standard Supply Service rules, there is less risk to new renewables. But then, many of these examples of 24/7 offerings and deals do not demonstrate feasibility.

Repackaging existing contracts and projects? Other buyer examples may give the false perception of progress and feasibility.

• Einstein Bros. Bagels - the original 2018 PPA with the 200 MW project was part of the project’s obtaining financing. In 2020, Einstein Bros signed a 3 year contract for ~4,180 MWh/yr (less than 1% of the project) and presumably extended that PPA for the 24/7 story in 2025. If Einstein Bros is given the first REC of every hour from a large wind farm, it can easily achieve 80-90% hourly coverage; add some spot‑market solar RECs and you’re easily above 90% matching. It’s a great story, but it doesn’t change the real world or prove that hourly matching is broadly scalable. And it was the PPA that built the project, not the hourly matching.
• Chiang Mai University announced their 12 MW rooftop solar project in 2018, built across an impressive 150 buildings. Initial press and the project pages promote that it is “managed by state-of-the-art technologies such as Blockchain, Artificial Intelligence, Internet of Things (IoT) and Vehicle-to-Grid (V2G)” but make no mention of storage solutions or any other technologies to enable 24/7 CFE.

Positive examples aside, issues remain. All of these examples are companies that clearly care. Every example is a company going above and beyond current standards. But it is less clear that these are examples that prove the impact and scale of hourly matching or how to avoid the downsides of requiring hourly matching and risks to practices already used by hundreds if not thousands of companies today globally.

Will this make it harder for companies to report zero market-based emissions?

EnergyTag (ET) said: “Yes, but getting to fully zero emissions is hard.”

• We shouldn’t make climate action harder for hardness’ sake; we should make it meaningful.

ET: “Today’s standard allows companies to claim to have zero emissions on paper, while still relying on fossil power on their local grid to serve their consumption.”

• Focus on emissions accounting. The GHG Protocol is an emissions-accounting standard, not a marketing guide. The FTC Green Guides (and programs like RE100, SBTi, and Green-e) pick up the baton on what you can claim publicly and what targets you set and add guidelines and verification protocols to ensure claims are correct. GHG Protocol should care about accurate emissions accounting and real emissions reductions, not usage or matching claims.
• PPAs represent real decarbonization. Companies give new solar and wind projects long-term revenue certainty so they can be financed and built. Those projects represent real avoided emissions even if the solar farm isn’t plugged into the company’s office building.
• Hourly+local matching can correlate with real reductions too IF companies are willing to spend more in the hours where REC supply is scarce and IF projects can be built in that region to address that scarcity and IF a voluntary spot-market for RECs and power supplied during those hours provides enough financial certainty for projects to be financed and built. But, that’s a lot of if’s. PPAs can be used with hourly+local matching but it is harder, more costly, and works in fewer places for fewer companies.

ET: “A more accurate accounting system must stop assuming that solar generation is consumed at night, that electricity generated on faraway, disconnected grids is consumed where a company operates”

• Focus on emissions, not usage. More solar can mean real emissions reductions during the day. Requiring companies to buy RECs from electricity generated in the middle of the night may mean companies turn to existing hydro or nuclear (as several of the examples given have done).
• We have an accurate accounting of emissions. Location-Based Method (LBM) gives you a holistic inventory of a company’s indirect emissions from electricity and is made more accurate with the proposed changes to adopt hourly local emissions factors. Changes to the Market-Based Method are needed as well, but requiring hourly+local matching is throwing the baby out with the bathwater.
• We rarely have excess renewables. Concern with building too much solar or wind is a genuine problem in some regions but (1) overbuilding creates incentives for storage projects and (2) it is premature for most of the world which remains below 15% variable renewables. Shifting the entire voluntary market to emphasize shifting solar power to the evening is heavy handed.

ET: “Updated Scope 2 market-based accounting is intended to provide a more accurate measure of progress towards the decarbonization of electricity use.”

• Accurate matching or emissions? Accurate emissions accounting doesn’t require more-accurate matching claims. And better accuracy of matching claims doesn’t guarantee emissions reductions.
• Accurate matching at what cost? If matching claims become more accurate but the voluntary market is less impactful in decarbonizing our world, is it worth the price?

ET: “The proposed update makes carbon accounting more accurate and transparent, while highlighting where more investments are needed, providing opportunities for clean energy, and flexibility that are often neglected today.”

• More investments may not be needed locally. Pushing the voluntary market to focus only locally and then hoping that more dollars are spent in the hours where renewable generation is scarce shuts the door on companies signing long-term contracts with projects that may not be local but have a very real impact on emissions.
• A hypothetical example: Inspired by Boston University, say a retail company with warehouses and stores across New York and New England aggregated their demand and signed a 10-year VPPA with a new wind farm in North Dakota, where coal remains the primary source of electricity. When that contract expires in 2030, the company was planning to sign a VPPA with another new project. But, hourly matching requirements will mean this does not count towards a company’s market-based inventory, removing the only incentive for such action. Instead, they must support projects in multiple regions including New York. Doing so not only means spending more (NY RECs are more expensive) to make a cleaner grid cleaner, it also overlaps with RGGI (requiring retirement of allowances) and New York's CES goals which their utility is already working towards through its compliance with the state’s Renewable Energy Standard and Zero Emissions Credit Requirements. Instead of driving new, additional clean energy on a dirtier grid, the company’s procurement will simply make it easier for the state to meet its goals, which is typically an obligation for the utilities. These new actions are very unlikely to be reducing emissions beyond what would have likely happened without their procurement.

Is hourly matching realistic for buyers of different sizes?

EnergyTag (ET) said: “Many organizations of all sizes are already doing clean energy hourly matching across five continents with millions of MWh.”

• The size of demand is what matters. It is not company size that matters–it’s load profile and ability to aggregate load for scale of procurement in order to provide long-term guarantees of revenues to project developers which allows them to secure critical project financing.
• Only two companies have reported on hourly matching. Of the 11 buyers listed, only Google and Meta have reported on its progress with hourly matching and Meta did so to highlight the shortcomings of the approach. Meta’s case study highlights why their 79% hourly matching rate was neither a good indicator of their actual environmental footprint, nor a good investment signal for future clean energy deployments.
• Old hydro and nuclear instead of new solar and wind? Some of the progress on hourly matching has buyers moving away from PPAs on renewables to contracts or tariffs backed by existing nuclear and hydroelectric generation. See previous examples.
• Prioritizing minority offtaker. Einstein Bagels shows another easy path to high hourly matching rates where they were already a minority (< 1%) offtaker in a large PPA (awesome!) and achieved most of their 90% hourly matching by presumably getting priority between offtakers on RECs for each hour. The hourly matching is repackaging the original PPA that enabled the project.

Fewer options = less impact. Requirements for hourly+local matching will limit the options companies have to buy clean electricity to meet purchased electricity GHG goals (the primary reason and incentive for corporate action). Projects might not exist where companies have facilities; markets in those locations might prohibit direct procurement of power; the costs will increase significantly; and the deals will be more complex.

New standards and maintaining options. Utilities should be held to stricter additionality rules (PPAs beyond RPS/IRP, transparent vintage/lifecycle GHG disclosure, especially for hydro) and long-term contracts should remain accessible to corporate buyers. Otherwise we get easier compliance, prettier hourly numbers, and less project financing.

Won’t these requirements slow the pace of voluntary procurement?

Likely yes. But the “pace of procurement” is the wrong success metric. What matters is the pace of lowering emissions, which could also slow. Hourly+local matching requirements may spur marquee brands to greater impact or it may shift them to supporting existing hydro and nuclear.

EnergyTag (ET) said: “It’s likely that the opposite is true. Many companies already claim 100% clean energy consumption based on the existing standard”

• 100% RE ≠ no longer trying. Companies have to procure every year to maintain 100% renewable energy claims. Many look to do better every year, including moving from the spot market to long-term contracts for greater confidence of consequential impact. How much faster could the use of PPAs be growing if standards incentivized or rewarded their use at all?
• Corporate PPAs are still setting records under the current annual framework, so the post-2030 “cliff” is unproven.

Is hourly data widely available?

While data availability should continue to improve and is not the primary problem (math is easy, procurement is hard), EnergyTag’s framing overstates maturity and underplays the additional operational cost of doing this well.

EnergyTag (ET) said: “This systematic report of granular electricity data availability finds that even today, “in most industrialized regions, granular consumption meter data is mostly available and accessible.”

The cited Flexidao report also says:

• Access in the U.S. “remains fragmented across thousands of utilities” and that “integration is complex.”
• Access in APAC/LATAM is still frequently manual and utility-by-utility.
• And does not report on data accessibility in Africa at all.

Hourly consumption data is not broadly available. Only a fraction of electricity consumers have demand-side data access at an hour-by-hour granularity. And When data may exist, it also matters that it can be accessed easily and cheaply.

Using estimates instead of hourly data? ZERO Lab reported that while granular data is not broadly available, estimates of hourly consumption are reasonable to use for emissions accounting. So maybe hourly data not being available is not problematic.

We still have questions about assuming flat load profiles, ignoring demand response, and what disclosures will accompany the use of estimates instead of actual hourly data without which, we fail to see what incentives remain to make hourly data available to all.

How can a company do hourly accounting if they don’t have access to hourly electricity data?

EnergyTag said: “[Companies] can turn annual or monthly electricity data into hourly data by using load profile estimates” or “calculate a flat hourly load profile by dividing their monthly electricity consumption by the number of hours in the month”

• Disincentivizing granular data. By accepting synthetic profiles without penalty or time limit, the draft disincentivizes utilities and registries from ever fixing the access problem. And even if estimates of hourly usage is acceptable for carbon accounting, it isn’t good enough to unlock the benefits of demand-side flexibility, without which, hourly matching becomes even more expensive.
• Who pays? If hourly matching becomes the new rule, who pays for getting from synthetic to settlement-grade hourly data? It seems reasonable to expect this cost to be passed on to customers.

Isn’t this proposal prioritizing technical ambition over practical feasibility?

Maybe. The package is ambitious, but impact is not guaranteed and feasibility is asserted, not demonstrated. The very need for carve-outs, synthetic profiles to estimate hourly consumption, broader regions based on the possibility of delivery, and other compromises from the more pure form of hourly matching considered in most studies signal the ecosystem isn’t ready. Utilities with existing hydro or nuclear generation appear to be excited for a new premium for their products. Feasibility today is largely limited to easy wins and a few well-resourced brands and their utilities/vendors. And even there, some of the large brands are moving from new solar and wind to existing hydro and nuclear.

For the bulk of mid-tier buyers, hourly matching still means new costs and complexities, fragmented data access, multi-region / multi-PPA transaction cost spikes, and pressure towards hourly spot markets. Ambition without additionality (e.g., allowing legacy nuclear/hydro or hour-stamped spot RECs to do most of the work) risks producing better usage claims but less new solar and wind farms which remain the foundation of decarbonizing our world.

Will I be able to count my existing procurements?

Maybe. It is good that the GHG Protocol working group (TWG) supported the concept of allowing existing long-term contracts to continue to count towards a company’s market-based reporting. More recently, the ISB also voted in favor of this. But a similar allowance is not part of SBTi’s v2.0 draft creating uncertainty.

EnergyTag (ET) said: “Likely yes. In recent voting, the TWG strongly supported the concept of allowing “legacy” long-term contracts signed before the update of the Scope 2 guidance”

• Allowing existing long-term contracts signed under today’s standards is essential to avoid retroactively punishing the companies that followed today’s recommendations and materially supported the financing of additional projects.
• “Strong support” is not enough. GHG Protocol has recommended honoring long-term contracts but final rules are unclear. Furthermore, SBTi v2.0 draft does not honor existing contracts, creating a double bind for buyers. We need rules that are consistent across stacking standards so buyers have greater certainty when considering signing 10-20 year forward contracts.

ET: “However, to ensure robust implementation, a number of conditions will have to be met, and these are still being discussed.”

• The working group should disclose exactly which concerns they’re trying to solve and which legacy conditions are on the table so stakeholders can judge whether the cure will be worse than the disease.

Won’t tighter market boundaries limit investments?

YES, tighter boundaries will absolutely limit and misallocate investments.

EnergyTag (ET) said: “Tighter market boundaries will direct clean energy investments where it’s most needed to supply consumption”

• Tighter boundaries don’t magically align dollars with need; they align dollars with ZIP codes. That’s not system optimization; it’s procurement parochialism. We should be focusing on accelerating grid-wide decarbonization. Hourly matching appears to shift more demand to non-additional PPAs and low-impact RECs.

ET: “other metrics can be used to estimate impacts separate from the market-based inventory associated with company actions taken outside or within their market boundary.”

• Consequential impact appears to not be supported by GHG Protocol’s ISB as part of the scope 2 update. We await the public comment period to know for sure. If non-local impact does nothing to address a company’s sustainability targets, what incentive is there for such action?

ET: “Today, the US and Europe have broad market boundaries, which have led to heavy concentration of procurement in certain regions where renewables are cheapest and easiest to permit, not where they are needed to serve a company’s demand.”

• Non-local does not mean non-impactful. Because new projects don’t directly serve a company’s demand does not mean they don’t contribute to decarbonizing the world. There are many reasons companies may not choose or be able to procure locally.
• You can’t sign PPAs everywhere. Many regions prohibit or lack VPPA structures and some utilities won’t contract. So “invest locally” immediately shrinks the feasible set of projects.
• Local-only means moving slower. If development must be local to serve a company’s demand, that means by definition they are investing in projects in regions where renewables are not the cheapest or the easiest to permit. That means worse economics and more delays in bringing on new projects, if at all. We should be speeding up, not slowing down.

ET: “Based on BNEF PPA data, Texas makes up about 40% of total PPA capacity signed in the US since 2000, while having a significantly lower share of commercial and industrial load”

• Texas has the resources: Texas hosts ~30% of U.S. wind capacity (with solar rapidly growing) and the 2008 CREZ transmission build-out, slashing basis risk and making remote renewables reliably deliverable under PPAs. So it’s no surprise that 40% of PPA volume lives in the state as it’s where the resources are richest.
• PPAs are easier in Texas: Texas’ energy-only, deregulated market plus retail-choice/open-access rules mean no IRP approvals or utility gatekeeping. Signing a PPA is simply the default hedge for new generators.
• Not apples-to-apples: Other big-load states often meet clean-energy goals via bundled utility green tariffs (which don’t show up in BNEF PPA tallies), so Texas’s ~40 % share of PPA volume reflects its resource wealth and market design, not an irrational over-build relative to corporate demand.
• Job not done. Despite its PPA leadership, the majority of Texas’s electricity still comes from fossil fuels. Texas consumes more electricity than any other state, by far and is growing the fastest. So there is significant work ahead to turn future PPA volume into a truly green grid.
• Would hourly matching have done better? Forcing “local only” for the last 10 years would have slowed, not sped, Texas’ buildout and resulted in fewer renewables nation-wide.

ET: “The proposed market boundaries define where clean energy claims are considered deliverable”

• Deliverable ≠ delivered. Again, by limiting more extreme mismatches, hourly matching can improve the appearance of credibility in usage claims. But because grid physics make tracing impossible, the inventory is no more verifiable than under today’s annual matching. Claiming accuracy perpetuates a misunderstanding about how electricity is delivered, not by flowing electrons, but by maintaining charge on a connected wire.

ET: “A TWG subgroup is developing a complementary framework for estimating the emissions impact of procurement actions, enabling companies to make non-inventory claims related to avoided emissions”

• Great potential, unlikely outcome. Finding a way to incentivize and recognize corporate action outside of the inventory and enable companies to make claims or reach their goals that way has great potential. But it is not part of a coherent proposal and is not gaining traction meaning this release valve for damage caused by requiring hourly matching may never materialize.

Are tighter market boundaries still too big to be credible?

Credibility of what? Asking whether market boundaries are “too big to be credible” assumes the purpose of the Market-Based Method (MBM) is to reflect physical usage. That’s not what the MBM was designed for. The Scope 2 guidelines define the MBM as: “A method to quantify the scope 2 GHG emissions of a reporter based on GHG emissions emitted by the generators from which the reporter contractually purchases electricity bundled with contractual instruments, or contractual instruments on their own” and states that the MBM “represents contractual information and claims flow, which may be different from underlying energy flows in the grid.”

What credibility really means. Credibility in the current MBM comes from whether instruments convey exclusive contractual claims, not from whether they reflect upstream physical usage (which is unknowable). Electricity (not emissions) is delivered via the grid. All attributional emissions are allocated according to methodology, not tracing.

False promises of accuracy. Hourly matching may reduce implausible mismatches, but the resulting inventory is no more verifiable than annual matching. Claiming improved “accuracy” perpetuates a misunderstanding of how electricity is delivered as electrons don’t flow from “your” generator, the system maintains charge balance on a connected wire.

The real credibility problem. The problem is not usage claims, it’s impact. Cheap, unbundled RECs are seen as doing little to enable new projects. While the GHG Protocol never promised otherwise, buyers have come to expect their dollars to drive new clean energy. Press and research have highlighted this gap in expectations and reality for years, and hundreds of companies have responded by going beyond requirements to use long-term contracts like PPAs. Hourly matching makes those long-term contracts harder, weakening the most credible path to real decarbonization. Switching from annual matching with consequential impact to hourly matching without it is a step backwards.

Will changing the rules lead to fewer long-term contracts?

Yes, in terms of MW of capacity of new renewables.

EnergyTag (ET) said: “The new proposed rules could encourage more long-term contracts”

• Maybe more contracts, definitely fewer MW. Buyers will have to sign many small PPAs instead of a few large PPAs. Some buyers will no longer be able to use PPAs as they are not allowed in all regions and buyers may not be large enough in a region. As a result, more buyers will have to rely on granular spot certificates or legacy-heavy utility tariffs which shrinks net additionality.

ET: “Aligning PPA production and consumption on an hourly and local basis improves the value of PPAs to corporate consumers as it generates power they can actually use in their operations.”

• False promise of “usable power.” Most corporate PPAs do not, and cannot, deliver the actual electrons generated to the buyer’s operations. Even so-called “physical” PPAs typically deliver an equivalent volume of electricity bundled with certificates (not specific generation) unless there is a direct line from project to facility. The majority of U.S. corporate PPAs (82% in 2019) are virtual, which by definition involve no power delivery. Aligning production and consumption hourly doesn’t change this reality; it only perpetuates a misunderstanding of how PPAs and the grid work.
• Risk ≠ value. The idea that hourly matching increases the “value” of PPAs depends on introducing more volatility into REC markets. PPAs might then act as a hedge against that volatility, but this is not added value. It is simply risk being reframed as value. For many buyers, particularly those unable to enter into large long-term contracts, the result is greater exposure, not greater benefit.
• Weakened sustainability value of clean energy. If RECs must be hourly matched to count, many of the RECs generated under a PPA will not be usable and will need to be sold. Granular spot markets are unlikely to absorb those excesses since many buyers will over-generate in the same hours (for example, solar at noon). The same pressure applies to on-site installations, where systems may be sized down to avoid producing uncounted excess. This dynamic risks shrinking the scale and financing strength of both PPAs and on-site clean energy.

ET: “This also provides a greater price hedging benefit compared to PPAs in grids where a consumer has no consumption”

• Oversimplified and oversold. Narrower boundaries only improve the hedge if the buyer’s retail exposure is to the same wholesale node/zone and if the Virtual PPA actually settles there. In many cases (regulated tariffs, fixed-price retail, hub-settled VPPAs, illiquid sub-regions), hourly+local adds shape risk and contract fragmentation without meaningfully improving the hedge. This makes PPAs less attractive to finance committees, not more.

ET: “Today’s Scope 2 rules do not favor long-term contracts.”

• Today’s rules recommend long-term contracts. That they do nothing to incentivize their use or reward companies that use them is considered a failing of current rules by some and appears unchanged under the proposed changes.
• GHG Protocol isn't supposed to favor long-term contracts. The Protocol is an accounting framework, not a policy instrument, and it was not designed to incentivize specific types of procurement. But this exposes a growing gap between the Protocol’s traditional role and what companies, policymakers, and the public expect from it: reporting and action that reflects real climate impact. The shift is already underway, as “impact” was one of the three decision criteria given to the Technical Working Group. Long-term contracts remain the central piece for corporate action delivering impact.

ET: “Among RE100 companies, PPAs comprise only 27% of renewable energy procurement, with unbundled EACs comprising the greatest share.”

• NREL reports that PPAs represent the majority of renewable energy procurement in the U.S. since 2023. Think of how much greater their share could be if long-term contracts were incentivized by GHG accounting rules in any way.

ET: “In addition, the Scope 2 proposal includes a new incentive for companies to sign long-term contracts to estimate the marginal emissions impact of their procurement actions.”

• Maybe. These new incentives are promising but not promised. They are being considered separately from the scope 2 update and so far are not gaining traction with the ISB (Independent Standards Board) who approves what goes out for public comment.

Does this require each company to act like an island?

The real problem isn’t firms pretending they’re the only customer on the grid. It’s that the rule set nudges them to optimize for their own hourly CFE score instead of system-wide decarbonization which can be problematic.

EnergyTag (ET) said: “Companies can continue to procure much of the power they need via long-term contracts,”

• Hollow reassurance: Being allowed to do something doesn’t matter if it no longer counts. Once boundaries tighten, transaction costs multiply, and granular spot markets look like the cheapest compliance backstop, companies will have even less reason to use long-term contracts and fewer projects will be built.
• Achieving climate targets remains the primary incentive. Again, we should not assume companies will accept the cost and risk associated with buying renewable energy if it doesn't accrue to meeting ambitious sustainability targets.

ET: “The proposed accounting standard is intended to encourage suppliers to develop clean products and companies to procure deliverable clean power in each hour while also considering reliability and affordability of electricity supply.”

• Reduced impact on project financing: Moving more market activity to spot markets may let companies dump unusable RECs from their PPAs and buy extra RECs for hours where they consumed more than their PPA generated. But that market activity doesn’t finance new projects. If buyers retreat from long-term PPAs toward hour-stamped trading, we’ve just improved matching claims while weakening the single most important lever companies have to add new clean capacity.

Will companies get credit for what is already on the grid?

Companies can only use RECs to address their scope 2 inventory from projects that are already on the grid. Long-term forward contracts have long been recommended and seen as impactful because they give a yet-built project revenue certainty enabling project financing and construction. But a company can only use the RECs from that project once it is delivering power to the grid.

This question seems to instead be asking if companies will get credit for what would have happened anyway, including clean energy from projects built decades ago with support from rate payers and government incentives. Letting legacy nuclear/hydro count inside the Market-Based Method risks diluting the role of PPAs in enabling new projects.

If Standard Supply Service is fully considered in updated standards, these legacy assets should not be allowed in 24/7 utility offerings or corporate PPAs as appears to be happening today. Whether or not they are included is ultimately a policy design choice, but excluding them is the only way to preserve impact.

Does the proposed update lead to double-counting of clean energy?

Today’s Market-Based Method and the industry around RECs already has to police double counting. It is one of the main things Green-e certifies. The proposed Scope 2 updates greatly expand the number of touch points and introduce new attribute types. It is important great care is given to building a more robust system including (i) hourly, unique-ID registries with API-visible retirement, (ii) hourly residual mixes net of every allocation (including standard supply service), (iii) a robust standard for how to track renewable energy shifted by storage technologies, (iv) strict disclosures for synthetic data, and more. With greater complexity comes a greater probability of double counting. But there is also an opportunity for reduced risk of double-counting with care and use of things like residual emissions factors.

The path forward

Hourly+local matching alone will not get us to real decarbonization. What’s needed is an accounting framework that also measures GHG emissions in tCO₂. The TWG proposed such a path, and even the ISB acknowledged broad support for continued development. Rejecting it over unsettled details like marginal emissions factors or additionality risks locking the standards into a framework that prioritizes usage claims over impact.

We are not advocating to leave the standards as they are. Use of long-term contracts continues to grow and is central to financing new capacity. Standards should amplify their use, not make it harder. And they must work across grids at all stages of the transition to renewable energy and be relevant today and over the next decade.

Matching MWh alone is not GHG accounting. Standards must evolve to reflect consequential impact in tCO₂ and whether actions actually reflect and incentivize real-world decarbonization impact.

Later this fall, GHG Protocol will open a public comment period. It is essential that we all participate so they fully understand both the ramifications and the potential of the proposed rules.