This guidance details how the carbon attributes of renewable energy in the form of energy attribute certificates (EACs) are accounted for in Scope 2 of the GHG inventories that underpin CarbonNeutral® certifications.
A number of countries have adopted policies requiring or encouraging electricity suppliers to offer renewable electricity to consumers. This may be done through a range of different electricity products such as tariff- based programmes and power purchase agreements. All credible renewable electricity products involve the cancellation of EACs such as Renewable Energy Certificates (RECs), International Renewable Energy Certificates (I-RECs) or Guarantees of Origin (GOs) in order to support the renewable electricity claim.
Prior to 2015, detailed guidance on how to report the carbon attributes of renewable electricity was absent from the GHG inventory standards accepted under The CarbonNeutral Protocol. However, in 2015, the WRI, author of the widely used GHG Protocol Corporate Standard, published its “Scope 2 Guidance” as an amendment to the GHG Protocol to clarify the accounting treatment of low-carbon grid-delivered energy in Scope 2 GHG inventories. The amendment, published after four years of development and industry consultation, provides guidance for how corporations should measure emissions from electricity and energy purchases, including renewable energy, and covers:
From the date of publication of the GHG Protocol Scope 2 amendment, entities using the GHG Corporate Protocol to meet the GHG inventory requirements of The CarbonNeutral Protocol are required to meet its Scope 2 Guidance, as officially amended from time to time by the WRI.
Entities using any other GHG inventory standard recognised under The CarbonNeutral Protocol are subject to The CarbonNeutral Protocol’s original requirements that:
For more information see: RECS International, 2020, Maximising the reliability and impact of buying renewables: guidance for market participants, link
Table 10: Illustrative Market-Based Scope 2 Reporting Declaration in Support of CarbonNeutral® Certification
This guidance details how EACs may be applied to emissions resulting from:
This guidance – first published in January 2022 – is the result of market guidance and is expected to be reviewed and updated once new guidance becomes available from the GHG Protocol and/or other recognised standards.
Use phase of CarbonNeutral products and products-as-a-service
The following requirements must be met when EACs are applied to use-phase emissions:
Use-phase emissions shall be determined according to the following requirements:
Employee homeworking
The following requirement must be met when EACs are applied to electricity consumption from employee homeworking and remote work:
This guidance details the disclosure requirements for businesses seeking to make a market-based Scope 2 reporting declaration in support of CarbonNeutral® certification. The disclosure only needs to be made when the party supplying the contractual instrument is not the primary CarbonNeutral certifier. For example, when an entity sources renewable electricity directly from an electric utility to support a Scope 2 reporting claim, it should provide details of the contractual instrument within the disclosure table (Table 10 above). The disclosure table will be provided by the certifier upon request.
A column should be added to the table to account for each contractual instrument claim made within a corporate GHG inventory. Often this will involve engaging the contractual instrument supplier to determine the appropriate form of evidence that can be supplied to substantiate a market-based claim. The disclosure table should be completed at the time of preparing the GHG inventory and should be signed by a company representative to warrant that the information provided is up to date, accurate and that the CarbonNeutral certifier can rely on the information.
When an entity’s location is neither consuming renewable energy nor applying EACs to reduce their Scope 2 emissions, and a published residual mix emissions factor is available, then the residual emissions factor(s) must be applied, resulting in a market-based total for Scope 2 emissions.
To ensure Assessment Partners and Providers are fully informed regarding EAC purchases, and so they can be accurately integrated into assessment reports, entities should follow the agreed upon EAC Application Protocol. The EAC Application Protocol is a document for use by Assessment Partners and Providers to clarify the process and division of responsibilities to ensure accurate integration of EACs into GHG emissions assessments. For example, the document helps deal with the application of EACs to multiple sites, and EAC deficits and surpluses. Please contact your Client Engagement Manager for further details.
Green gas certificates are relatively new products that are being adopted by businesses to manage their Scope 1 GHG emissions.
Green gas, known also as biogas, refers to calorific gas produced by the breakdown of organic matter, through anaerobic digestion or fermentation. Feedstocks include biodegradable materials such as manure, sewage, municipal water, green waste and plant material.
Before biogas can be introduced to the gas grid it needs to be upgraded to pipeline quality natural gas standards. This upgraded gas becomes biomethane, which can be used for any purpose currently satisfied by conventional natural gas.
Injecting biomethane into the natural gas grid displaces the need for a unit of conventional natural gas. Therefore, certificates and contracts are the only practical means of tracking the green gas from production to end use. Projects such as the Green Gas Certification Scheme aim to provide a certified means of tracking green gas injected into the grid through to end user consumption claims, similar to renewable electricity tracking schemes such as I-REC (International REC standard) and EECS-GO (European Energy Certificate System – Guarantee of Origin).
Clear guidance on extending market-based reporting approaches to renewable gas is still forthcoming. In their Technical Note: Accounting of Scope 2 emissions, the CDP recommends referring to the GHG Protocol’s Scope 2 Guidance when using green gas certificates. Appendix A of the Scope 2 Guidance states:
Companies may have contracts to receive heat or steam from providers that specify the fuel source and emission rate associated with their received energy. In addition, “green heat” certificates generated from biogenic fuel sources may be issued and traded independently from the energy flows and injection into the distribution grid. Companies shall report emissions from the purchase and use of these energy products the same as for electricity: according to a location-based and market-based method, if the contractual instruments used meet the Scope 2 Quality Criteria as appropriate for gas transactions.
Section 6.12 of the Scope 2 Guidance goes on to say:
While biomass can produce fewer GHG emissions than fossil fuels and may be grown and used on a shorter time horizon, it still produces GHG emissions and should not be treated with a “zero” emission factor. Based on the Corporate Standard, any CH4 (methane) or N2O (nitrous oxide) emissions from biogenic energy sources use shall be reported in Scope 2, while the CO2 portion of the biofuel combustion shall be reported outside the scopes. In practice, this means that any market-based method data that includes biofuels should report the CO2 portion of the biofuel combustion separately from the scopes.
Applying this to the use of biomethane delivered through the gas pipeline, we anticipate the following impacts on a company’s GHG report:
Table 12b illustrates how this would apply to a site in London, using the UK relevant factors published by BEIS (UK Government Department for Business, Energy and Industrial Strategy. Greenhouse Gas Reporting: Conversion Factors 2018, link). For biomethane, these factors combine the CH4 and N2O emissions into a single factor, which is marginally higher than the fugitive CH4 and N2O emissions associated with natural gas combustion.
Additional guidance from the 2020 CDP Technical Note on the use of green gas certificates includes:
Table 12a: Reporting 10,000 MWh of Natural Gas Consumption
Table 12b: Reporting 10,000 MWh of Biomethane Consumption Evidenced by Green Gas Certificates