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Location-based vs market-based Scope 2

Scope 2 is emissions from purchased electricity, steam, heat, or cooling. Viable Pathway can show a location-based pathway or a market-based pathway. The choice changes historic data, projections, and whether certificates apply.

Two accounting methods

Location-based

Location-based uses the average carbon intensity of the local grid. Physical consumption does not change when you buy certificates. REC, LGC, and PPA have no effect on this method.

Market-based

Market-based uses contractual electricity attributes. Certificates can reduce reported Scope 2. If you do not buy certificates, you receive the residual mix.

Residual mix

The grid has a renewable share and a fossil share. When other organisations claim the renewable share, the leftover mix is more fossil-intensive. Market-based emissions can then rise even if your kWh stay the same.

Example, not a calculation from your data

This grid starts at 40% renewable and 60% fossil.

Residual renewable
—
Residual fossil
—

What to do

  1. Use location-based to show physical grid intensity.
  2. Use market-based if you report contractual electricity purchases.
  3. If you use market-based accounting, plan certificate repurchase. See REC, LGC, and PPA.