Why the GHG Protocol Scope 2 Revisions Matter Now
The ongoing Greenhouse Gas (GHG) Protocol Scope 2 public consultation is shaping up to be the most consequential rewrite of corporate electricity-emissions accounting since the market-based method was introduced a decade ago. The draft revisions signal a major tightening of what qualifies as credible renewable electricity procurement. The release of the updated guidance is scheduled for late 2027. For Australian corporates already juggling The Australian Sustainability Reporting Standards (ASRS) reporting, The National Greenhouse and Energy Reporting (NGER) obligations, voluntary targets, and global commitments like RE100 initiative and the Science Based Targets initiative (SBTi), the message is clear: waiting to act could put 2030 goals at risk.
What Is Expected to Change?
Across both the GHG Protocol and the SBTi, three shifts stand out:
1. Mandatory hourly matching (for market-based reporting)
Companies would need to match electricity consumption with renewable certificates on an hour-by-hour basis. A standard that is nearly impossible today within Australia’s energy market. Until the national Renewable Electricity Guarantee of Origin (REGO) scheme is fully operational, hourly certificates simply won’t exist at scale.
2. Deliverability requirements-
Renewable energy certificates would need to come from generation within the same grid boundary, likely interpreted in Australia as the same state or pricing zone. For organisations with dispersed facilities across New South Wales, Queensland, Victoria, South Australia, Tasmania and Western Australia, this is a significant constraint. Retailers today cannot reliably deliver state-specific Large-scale Generation Certificate (LGC) portfolios, and in some regions (e.g., Northern Territory) supply is extremely limited.
3. Grandfathering—but only for early movers
The GHG Protocol has proposed legacy treatment for contracts signed before the new rules take effect, but the details remain uncertain. What is clear: contracts executed in 2026–2027 are the safest path to maintaining renewable claims through 2030 and beyond. Delaying could mean being forced into a future framework that raises costs and reduces flexibility.
Why Should Australian Corporates Care?
Because the consequences extend beyond carbon accounting:
- ASRS reporting will reference GHG Protocol alignment, meaning non-compliance creates both regulatory and reputational risk.
- SBTi-validated pathways may require stricter matching standards than today, raising the bar for demonstrating progress.
- Stricter Scope 2 rules are expected to significantly raise procurement complexity, with hourly-matched local Power Purchase Agreements (PPA) projected to be up to six times more expensive than annual matching where technically feasible.
- Retail PPA opportunities are peaking, soft LGC prices, improved forward curves, and strong retailer competition means 2026 is shaping up as a favourable contracting window.
- Companies without long-term renewable supply locked in risk missing their 2030 targets, facing higher costs, or being forced to procure riskier spot certificates.
Why Act Now?
Timing directly affects eligibility. The consultation materials clearly indicate that contracts signed before the new framework takes effect are likely to be grandfathered and therefore recognised for their full term under today’s rules. Corporates that delay contracting into 2027 or later may lose:
- Protection through grandfathering under the current rules
- Cost certainty in a transitioning and increasingly volatile market
- A credible pathway to meeting ASRS, NGERS, RE100, and SBTi expectations
- Strategic advantage while competitors wait for clarity
As the world’s largest advisor on renewable electricity contracts, we are ready to support you with expertise and speed. Get in touch with Robbert Slooten and Ben Spencer to explore which solutions best fit your company.