Proposed updates to the GHG Protocol’s Scope 2 guidance may significantly change how companies report emissions from electricity use. The new rules focus on stricter controls for renewable energy claims. These changes are now under public consultation and are expected to take effect by late 2027.
What Is Changing in Scope 2 Reporting
The draft guidance introduces hourly matching for market-based reporting. Companies would need to match electricity use with renewable energy certificates on an hourly basis instead of annual totals. This requirement creates challenges in markets such as Australia, where hourly data remains limited.
The proposal also restricts renewable certificates to the same grid region where electricity is consumed. For example, businesses must source certificates from the same state or local grid. This reduces flexibility for companies operating across multiple regions. However, contracts signed before the rules come into force may receive legacy treatment and keep existing reporting methods.
Impact on Australian Businesses
Australian companies face added pressure from local frameworks such as the Australian Sustainability Reporting Standards and the National Greenhouse and Energy Reporting scheme. Global commitments like RE100 and the Science Based Targets initiative also raise compliance expectations.
Costs may rise as well. Hourly-matched power purchase agreements are far more expensive than annual contracts. In some cases, prices can reach several times the current cost. Industry experts point to 2026 as a key opportunity to secure renewable energy deals under better market conditions. Companies that delay may struggle to meet 2030 climate goals and face higher exposure to volatile electricity markets.
Why Companies Should Act Now
Early renewable energy procurement can protect businesses under current reporting rules. It also helps stabilize long-term energy costs and supports compliance with evolving standards. Acting early gives companies a strategic advantage as renewable sourcing becomes more complex.
Advisors recommend reviewing electricity strategies now and seeking expert support to build resilient renewable procurement plans.
Sustainability groups such as GSIF note that coordinated public investment plays a critical role in scaling clean technologies and accelerating global climate transitions.
About The Author
