What You Asked. What We’re Answering.
Our first session, “Limitations of Hourly Matching Claims for Scope 2 Reporting,” drew over 650 registrants and sparked a flood of thoughtful, technical questions. From market implications to measurement strategy, it was clear that the GHG accounting community is wrestling with some big, unresolved questions.
So we came back with Part II: a live, open Q&A session. And now you can get the answers to all your questions below. Your questions are answered by:
- Michael Gillenwater, Executive Director, Greenhouse Gas Management Institute (GHGMI)
- Michael Leggett, Co-founder, Ever.green
- Miranda Ballentine, Senior Advisor, Green Strategies, Inc.
Why This Matters
The GHG Protocol Scope 2 Guidance is under revision. Companies are making clean energy purchasing decisions today that will affect their:
- Climate strategies
- Budget allocations
- Regulatory risk exposure
These decisions—whether to adopt hourly matching or alternative accounting approaches—could shape your operations for the next decade.
And while consensus is still evolving, the need for clarity is urgent.
Missed the Sessions?
In Part I, Gillenwater and Leggett—moderated by Miranda Ballentine (Green Strategies)—explored whether hourly matching truly drives additional clean energy development, or risks adding complexity without impact. In Part II, the focus was on answering as many questions from the audience as possible. Catch up here:
The papers we referenced during the webinar:
- McKinsey study on 24/7: Rethinking Your Company’s Clean Power Strategy
- Gillenwater and Leggett’s paper: Limitations of Hourly Matching on Scope 2 Reporting
- GHG Protocol Scope 2 proposal
- Notes from other working groups about changes to other guidelines: Standards Development and Governance Repository
Your Questions, Answered
We’ve also published written responses to the most pressing questions from the two webinar sessions. Get the full Q&A below:
Part I
Q: How can we effectively change the conversation/narrative from bean counting to maximizing incentives for buyers to support the highest impact projects?
A: This is a really important question. It may be that trying to make that change inside the market-based method (still inventory or allocational accounting) makes it hard to make progress here. Should we instead be pushing for consideration and rewarding impact (moving from counting to maximizing emissions impact) outside the inventory? And if it did move, what claims would progress in that area make? Would a company take action both under the market-based inventory AND under consequential impact outside the inventory?
Q: The GHG Scope 2 update mentions a “combined framework” of inventory reporting and impact reporting. What does this mean? Is it “either or” or “and”? If SBTi continues to use inventory reporting, how will impact reporting be recognized?
A: It’s still unclear. The consequential impact reporting being considered is outside the inventory framework and may not even be included in the revisions sent out for public comment. If it is added, it is not clear how it intersects with inventory accounting, requirements, or what claims come from using the impact reporting (probably not 100% RE but maybe net-zero scope 2 emissions). Also consider that SBTi is currently considering consequential impact, which raises the possibility of GHG Protocol and SBTi not being aligned. We will continue to push for the inclusion of impact reporting and greater clarity on these and other questions.
Q: Would you recommend keeping Scope 2 location-based (S2 LB) and market-based (S2 MB) methods for inventory accounting along with a third consequential marginal impact method, or switching to location-based plus a separate consequential impact method?
Michael Gillenwater: I recommend improved location-based accounting (with better hourly grid factors) and a separate consequential impact reporting where market-based claims would be accounted for along with other kinds of interventions. This would eliminate market-based inventory. RECs would still exist, but we’d account for them based on their actual impact, not as a way to estimate GHG inventories. Read more about this topic in my essay: What is the GHG Accounting Market-Based Mistake? My next essay will detail what this multi-statement corporate reporting framework could look like. Subscribe to the GHGMI newsletter to stay informed.
Q: How would the accounting for hourly matching work? Would this require hourly granularity electric data? If so, how could companies compel suppliers to provide hourly consumption totals?
A: Yes, you’ll need hourly electricity usage data from utilities for each site. If that’s not available, GHG Protocol should provide methods to estimate hourly consumption from annual or monthly data. We’re concerned about the cost and complexity of this work, though proponents believe this will get easier as demand for granular data increases.
Q: What happens to existing VPPAs and RECs when the GHG Protocol update is released? Do you think there will be a grandfathering rule that allows those RECs to count toward Scope 2 goals? How can we future-proof current contracts?
A: Grandfathering clauses are essential, and we’re advocating for their inclusion. The GHG Protocol draft includes such a clause, but SBTi’s draft changes do not (yet). We expect PPAs and VPPAs to broadly qualify for their original contract term, but specific requirements aren’t yet finalized.
Q: What role will utilities play going forward? There seems to be a decreasing level of useful disclosure (compliant with S2 Quality Criteria). Will their disclosure be important for understanding grid intensity at a given time, and do we need a strategy to incentivize utility transparency?
A: Utilities will play an increasingly important role in numerous ways. Data around the grid mix and emissions (both average and marginal) exists. More work is to be done on the availability of more granular data for electricity usage. Some utilities also see a shift to hourly matching as an opportunity to offer new green tariffs backed by existing nuclear and hydro generation, which could be a step backwards. Updated Scope 2 guidelines will need to set the standards for what counts, likely excluding “Standard Supply Service.”
Q: Will the GHG Protocol require more time-specific grid emission factors, like hourly or peak vs. off-peak? Current guidelines allow the use of annual emissions factors, which do not consider shifting consumption patterns in decarbonization planning.
Yes. More granular emissions factors are proposed for both location-based and market-based methods, not just annual averages.
Q: Buyer representation (corporates) in the GHGP scope 2 working group seems low at around 16%, while data service providers who profit from hourly matching are well-represented. Of those, many are among the largest energy buyers in the nation (Microsoft, Google, PepsiCo, etc.). How do we reconcile the idealistic and scientific approach of the standard with the corporate, bandwidth-strapped reality of the 99% of companies that don’t have dedicated RE teams?
A: This is exactly why we (Ever․green and Greenhouse Gas Management Institute) wrote our paper. We need to better describe implementation challenges from requiring local+hourly matching, demonstrate how long-term contracts (like PPAs) are put at risk, and encourage more companies to understand these changes and speak up during public comment periods.
Q: What are the best practices for Scope 2 baseline comparisons with hourly matching? Do you compare to the prior year, the prior week, or the same region without renewables?
A: Inventory accounting is not compared to a baseline. For impact assessment, research, and modeling, the same hour is typically compared under different conditions. For example, REC avoided emissions calculations estimate what generation source (and its emissions factor) would have operated if the renewable generation weren’t there.
Q: Could measuring inventory and impact side by side discourage companies from reducing actual physical emissions?
A: There are tradeoffs, but cost savings remain the biggest incentive for physical emissions reductions. Location-based emissions incentives also persist. While hourly + location matching may produce more accurate usage claims, it doesn’t necessarily mean a business has “reduced actual physical emissions” since market boundaries balance improved claims with feasibility.
Q: Are electricitymaps.com’s areas reliable for hourly emissions data instead of eGRID subregions?
A: eGRID subregions have strong traction for U.S. market boundaries and are more granular than electricitymaps.com, which the GHG Protocol prefers. Also, eGRID is more stable than commercial platforms.
Q: How do customer-site batteries complicate data reporting and auditing?
A: Batteries add significant complexity. Less so if batteries are only ever charged by on-site solar. The Greenhouse Gas Management Institute published a detailed report on battery GHG accounting that explores these challenges, though it’s more focused on utility perspectives.
Q: Is it technically feasible to generate RECs with hourly matching characteristics? Will it be easy for registries and others to generate RECs with 24/7 and matching characteristics?
A: Adding timestamps and metadata to RECs is technically straightforward. Validating the time stamps may be more difficult. The commercial challenge (finding and buying RECs that match your hourly load) is much harder. There will be instances where a high percentage of hourly matching is relatively easy to do. Einstein Bros achieved > 90% from an existing VPPA with a wind farm and solar RECs from ENGIE. But that does not mean it will be easy for many or most companies. Even Google has gone from 67% hourly matching down to 64%. Some of the proponents of hourly matching say that it being harder is part of the point—for the difficulty in the voluntary market to match the difficulty of decarbonizing the grid in the real world.
Q: How can the company that buys REC power from a utility company get visibility into dispatchable renewable power, and whether that power will reflect battery storage on the grid company side?
A: This requires much greater transparency from utilities about what you’re purchasing. While some providers like Ever․green include hourly metadata in REC contracts, it’s not standard with utilities or most brokers. Proponents of 24/7 believe it will become more standard to get time stamps on each REC to support hourly matching. For storage, you need proof that the battery was charged with clean energy for clean discharge—very difficult unless the battery is behind-the-meter or co-located with the renewable project.
Q: If the inventory is indeed the place for the most accurate, science/evidence-based record of the emissions that a company is responsible for, then I’m not following why moving to greater granularity/accuracy would be incompatible with the inventory? In particular, given that it seems you are in support of the impact/emissionality metric being developed alongside.
A: First, it isn’t incompatible. Location-based accounting should indeed move to more granular data for a more accurate record of the emissions a company is responsible for. But the market-based method was designed to incentivize impactful market action, not just accurate accounting. Keeping market action within inventory accounting clouds the decision: Do you optimize for accurate usage claims OR maximize incentives for bold, impactful climate action? These goals sometimes conflict.
Part II
What’s actually being proposed?
Q: Are the GHG Protocol updates forcing buyers to do 100% hourly matching, i.e., 24/7 carbon-free energy (CFE)?
A: Formally, no. Functionally, yes. The update changes how Market-Based Method claims are counted, so you may only use RECs that match the hour and location of usage. While GHG Protocol is not a target-setting body, it underpins frameworks like the Science Based Targets initiative (SBTi), which are currently proposing to require 100% hourly/location matching. The pressure to maintain “zero” Scope 2 goals means companies will be compelled to reach for 24/7 CFE.
Q: Can I still count RECs from my existing PPA?
A: GHG Protocol has recommended, and the ISB has voted in favor of honoring existing long-term contracts, but rules and conditions are not final. Furthermore, SBTi v2.0 draft does not currently honor existing contracts, creating a double bind for buyers. Hopefully, this oversight can be corrected as we need rules that are consistent across stacking standards so buyers have greater certainty when considering signing 10-20 year forward contracts.
The theory behind hourly matching
Q: What is the theory of change for 24/7 CFE? Why has it become the sole option for updating the Market-Based Method?
A: The theory of change for 24/7 CFE (carbon-free energy) is that if buyers focus procurement on the hours and locations where clean supply is scarce, their demand could drive new projects and technologies to fill those gaps, helping the grid fully decarbonize. But impact still depends on whether the procurement actually enables new clean generation. 24/7 CFE risks reshuffling existing nuclear and hydro supply and reducing meaningful support for adding needed solar and wind capacity that accelerates the transition to renewable energy.
Q: Does hourly matching fix credibility problems with current claims (e.g., using California solar power at night in Maine)?
A: By limiting more extreme mismatches, hourly matching can improve the perception of credibility. But because grid physics makes tracing impossible, the inventory is no more verifiable than under annual matching. Claiming accuracy perpetuates a misunderstanding about how electricity is delivered based on a false concept of flowing electrons (rather than the maintenance of charge on a connected wire). The deeper reputational risk is not credible usage claims but whether claims are tied to real decarbonization. The main credibility gap identified by the press and research for years is that cheap, unbundled RECs often do little to enable new projects. Instead, they divide credit for the generation that would have happened anyway. Hourly matching does not fix that problem, and can even shift demand away from PPAs that finance new builds toward existing nuclear or hydro to meet 24/7 targets. The key question is whether purchases materially accelerate clean energy deployment. If not, the accounting method, whether hourly or annual, will not restore credibility.
Q: Doesn’t research show hourly matching is most impactful?
A: No. Capacity-expansion models that appear to favor hourly matching usually assume away market realities. Under assumptions like frictionless contracting, constant demand, ambitious CFE targets, no additional soft costs, and no PPA crowd-out, hourly matching can look more impactful. But that’s perception, not reality.
- Accuracy vs. credibility: Hourly matching may reduce implausible mismatches, but it does not make inventories more accurate. Electricity cannot be traced to specific loads—so hourly rules improve optics, not truth. The real credibility gap, documented in research and the press, is that cheap unbundled RECs do little to add capacity. Over 800 U.S. companies are now using PPAs to close that gap. Hourly rules don’t fix this and can even weaken PPAs by shifting demand to existing nuclear or hydro.
- Granularity vs. decarbonization: More granular accounting doesn’t guarantee more impact. In the real world, rigid hourly requirements raise costs, shrink participation, and divert demand away from long-term contracts into short-term supply. What maximizes real decarbonization is the trifecta of long-term contracts standing up more new projects in locations where they will do the most to turn off power generated by fossil fuels.
Analysis by McKinsey, E3, Baringa, and others highlights these unintended consequences. We should preserve a path that incentivizes and rewards companies for taking on the work, cost, and risk of high-impact long-term contracts to enable more capacity rather than make it harder and more costly.
Q: Could hourly matching actually increase emissions?
A: Yes, hourly matching can backfire if it drives companies to prioritize matching their own load over reducing system-wide emissions. Time-shifting load or discharging storage during high-marginal-emissions hours can help, but if those actions are guided solely by a matching requirement rather than marginal-emissions data, they can increase total emissions. Similarly, focusing on matching may steer procurement toward existing nuclear or hydro resources that address all hours but do nothing to add new clean generation.
Commercial and practical impacts
Q: Do you see an hourly matching requirement pushing more companies towards unbundled RECs rather than towards PPAs?
A: Absolutely. We expect it will push more companies toward unbundled RECs rather than grow the use of PPAs. Here’s why:
- PPAs aren’t available in all regions, and virtual PPAs become unavailable when you can only use locally generated RECs.
- Costs rise sharply when one PPA must be replaced by many smaller regional deals.
- Companies risk signing PPAs but not being able to use all the RECs when they don’t match hourly load patterns.
- These issues are especially problematic for companies with distributed operations, shifting locations, or mobile assets.
The easiest way to avoid these added risks is to skip long-term contracts altogether and buy what you need in spot markets.
Q: Is the data infrastructure ready for hourly matching?
A: Not everywhere. While some regions have hourly metering and hourly REC registries, many don’t. The proposed rules allow for estimates when hourly data isn’t available, but estimates aren’t sufficient for demand-side flexibility, without which, hourly matching becomes even more expensive. And by accepting estimates without penalties or time limits, the draft may actually discourage utilities and registries from ever upgrading their systems.
Q: One can construct examples that support annual matching and that support hourly/regional matching. What are the underlying assumptions that flip the conclusion, and how robust are those assumptions in practice?
A: Exactly—the outcome depends on the assumptions. Hourly/regional matching often looks best in models that assume frictionless contracting, constant demand, ambitious CFE targets, no additional soft costs, no impact on PPA uptake, etc. Annual matching looks bad when you focus on spot-market transactions from existing projects at low prices and much better when you focus on companies using long-term PPAs that enable new project financing (how the majority of RECs are purchased in the U.S. since 2023). Neither is perfect, and the current standards need to be improved. The key is testing how sensitive the conclusions are to these assumptions, because if they do not hold in practice, the modeled “optimal” approach may not deliver in the real world.
Additionality and impact
Q: Is the primary purpose of impact metrics (A) to support voluntary corporate impact claims or (B) to evaluate the impact of decisions around technology, siting, and operation?
A: When evaluating the impact of indirect corporate actions, such as buying credits from another project, we should consider both: (A) the impact of the credits on enabling additional projects, and (B) the impact of the project itself on the planet and global emissions. When a utility is building projects, they are required to build, (A) is generally assumed, and it makes sense to focus on (B). But for companies seeking to have an impact through external projects, it is wise to consider both.
Q: Can’t companies use impact reporting alongside hourly matching in market-based reporting? Is there really a problem?
A: The proposal to allow separate reporting on consequential impact and emissions impact was supported by the TWG (GHGP Technical Working Group) but voted down by the ISB (GHGP Independent Standards Board) and will not be included in the public comments. So for now, it is hourly+local matching or bust. A separate working group (AMI) is being asked to consider consequential impact outside of the Scope 2 revisions, but it was dissolved earlier this year. If resurrected, the Scope 2 working group is so far ahead of all the working groups that it seems unlikely anything will be ready when the Scope 2 rules change.
Q: Will the new rules require companies to prove their projects are “additional”?
A: Not likely. The track that would have considered additionality was voted down by the ISB. What remains is a proposal that only tests for hourly and locational matching for better optics around usage claims, not tests of whether procurement enables new clean energy. Without an explicit pathway for consequential impact, corporations could meet the new rules with existing resources that do nothing to expand clean generation. If the goal is real emissions impact, additionality should be built into the framework. Otherwise, the credibility gap that prompted this update will remain.
Q: Why didn’t the GHGP ISB back the Technical Working Group’s recommendations to advance consequential impact?
A: We cannot speak for the ISB’s internal reasoning, but the vote suggests concerns about complexity, timing, and/or alignment with the current Scope 2 revision process. Advancing impact accounting alongside hourly matching would have opened a parallel path focused on actual emissions impact and additionality, which many in the TWG saw as essential. By not moving it forward, the ISB has effectively put all emphasis on hourly matching, which increases the risk that we improve the precision of claims without improving real-world decarbonization. It is possible this work will continue under a separate working group, but there is great risk and uncertainty in the timeline of that work being completed on the same timeline as the scope 2 revisions.
Q: Are all new projects guaranteed to be additional from an emissions perspective? If not, how much added cost will there be to corporate customers to have their projects verified?
A: No, not all new projects are additional. Some are required by policy, sufficiently supported by other subsidies, or would be built anyway due to market conditions. Verifying additionality adds cost, but can be scaled depending on the test. Legal attestations are low-cost and can be effective. Financial tests require more data but are still modest relative to overall PPA transaction costs. The key is designing a test that is credible, consistent, and affordable, so buyers can have confidence that their procurement is driving real emissions reductions without pricing them out of the market.
Q: How can we operationalize additionality? We’ve heard GHG Protocol sees a long-term corporate PPA as insufficient without further evidence.
A: From a project finance perspective, a 10+ year offtake that is signed pre-funding, covers a meaningful share of revenue, and is priced to support debt sizing is exactly what enables many projects to get built. It is one of the clearest causal links between a corporate action and a new clean generation. Rather than endless debates about what would have happened otherwise, we could define clear criteria for high-impact contracts and verify deals meet them.
Q: Is the marginal impact method considered offsetting?
A: No, the marginal impact method measures how much a procurement changes total system emissions compared to what would have happened otherwise. It focuses on causation and grid-wide impact, not on one-for-one balancing of emissions. It’s an attribution of influence on the system, not a trade in emission reductions.
The path forward
Q: How can companies influence this process?
A: GHG Protocol plans to publish draft revisions in October with a public comment period following. This will be the best opportunity for companies to understand how proposed changes could affect their operations and the broader clean energy market—and to make their voices heard.
Q: What do you see as the right solution?
The goal should be improving both accuracy and impact with broad enough participation that there is a large impact. We need accounting methods that reward procurement demonstrably adding new, clean energy to the grid, AND ways to incentivize the projects and technologies that make clean energy available every hour. The better path allows hourly matching as an option to improve accuracy while preserving accessible pathways for high-impact long-term contracts backed by clear impact criteria. Accuracy without impact risks reshaping markets around accounting exercises that leave actual emissions largely unchanged.
GHG Management Institute is coming out with several new papers soon proposing a new multi-statement reporting framework that addresses these issues with market based approaches. Stay tuned to the GHG Management Institute newsletter. Ever.green drafted their own proposal for scope 2, but fundamentally, they care most about having options that allow and incentivize long-term contracts like PPAs rather than make them harder.
Comments