Location-based method
The Location-based method is a Greenhouse Gas Protocol approach for quantifying Scope 2 emissions from purchased energy using average generation emission factors for defined geographic areas. It reflects the emissions intensity of the grids where energy consumption occurs, regardless of the reporter’s specific electricity supplier, contract, or purchased energy attributes.
In simple terms
The Location-based method multiplies purchased energy consumption by an average emission factor representing generation in the relevant grid area and time period. The current Scope 2 Guidance provides a hierarchy for selecting the most appropriate geographic data. The result describes the average emissions context of electricity use; it does not assign emissions according to a company’s chosen tariff, supplier, or energy attribute certificates. Organizations operating where contractual instruments are available generally report this result alongside a Market-based method total, allowing users to see both grid context and procurement-based claims.
Why it matters
A location-based total supports comparison of energy use against the average emissions intensity of the grids serving operations. It can highlight where Energy efficiency, electrification, or grid decarbonization changes inventory results. Accuracy depends on using suitable geographic and temporal factors. The method does not recognize differentiated electricity purchases, so it answers a different question from market-based accounting rather than serving as a fallback label for it.
Example
For example, a fictional retailer totals electricity used by stores in three grid regions. It applies the appropriate average grid factor to consumption in each region, then sums the results. Renewable electricity contracts do not change this location-based calculation, although they may affect the separately reported market-based total.
How it differs
Market-based method
The Location-based method uses average emission factors for the grids where energy is consumed; the Market-based method uses qualifying contractual instruments and supplier information under a separate hierarchy.
References
Current status
- As of
- Issuer
- Greenhouse Gas Protocol
- Instrument or version
- GHG Protocol Scope 2 Guidance (2015)
- Status
- The current published method is in the 2015 Scope 2 Guidance; the guidance is undergoing revision.
Applicability: The method applies to electricity grids and uses the current hierarchy of average geographic emission factors for consumed purchased energy.