Scope 2 and Energy
When organizations measure their greenhouse gas (GHG) emissions, Scope 2 plays a vital role. These are the indirect emissions from purchased energy—most commonly electricity, heating, cooling, and steam—that a company consumes in its operations. While Scope 1 covers direct, on-site emissions, and Scope 3 covers value chain activities, Scope 2 helps capture the carbon impact of the energy companies rely on to function.
This post explains how to calculate Scope 2 emissions in line with the GHG Protocol Corporate Standard.
Step 1: Understand Scope 2 Boundaries
Scope 2 includes emissions from:
Purchased electricity (grid-supplied power)
Purchased heat, steam, or cooling
It does not include fuel combusted on-site (that’s Scope 1) or employee activities like commuting (Scope 3).
Step 2: Collect Activity Data
You’ll need data on how much electricity, heating, cooling, or steam your organization purchased and consumed. Typical sources include:
Utility bills
Submetering systems in buildings
Energy management software
For electricity, data is usually in kilowatt-hours (kWh); for heating/cooling/steam, it may be in MMBtu, therms, or GJ.
Step 3: Choose the Calculation Method
The GHG Protocol requires organizations to report Scope 2 emissions using two complementary methods:
Location-based method
Uses the average emissions intensity of the grid in the region where energy is consumed.
Example: If your office is in France, emissions reflect France’s relatively low-carbon grid mix (heavily nuclear).
Market-based method
Reflects emissions from electricity that companies have purposefully chosen, such as through renewable energy contracts, green tariffs, or energy attribute certificates (like RECs or Guarantees of Origin).
Example: If your company buys 100% renewable electricity backed by certificates, Scope 2 emissions under this method may be close to zero.
Step 4: Apply Emission Factors
Convert activity data into emissions using appropriate emission factors:
Location-based: Use regional grid emission factors, such as those published by the International Energy Agency (IEA), EPA eGRID (US), or DEFRA (UK).
Market-based: Use supplier-specific emission factors (from your utility or energy contract), or apply residual mix factors where available.
The formula is straightforward:
Emissions (CO₂e) = Activity Data × Emission Factor
For example:
10,000 kWh electricity × 0.4 kg CO₂e/kWh = 4,000 kg CO₂e
Step 5: Report Transparently
The GHG Protocol requires reporting both location-based and market-based Scope 2 emissions side by side. This dual reporting provides transparency and avoids greenwashing by showing both the physical reality of grid energy and the market choices a company makes.
When reporting, include:
Activity data (MWh, GJ, etc.)
Emission factors and sources
Methodological choices and assumptions
Any renewable energy instruments used
Step 6: Use Results to Drive Action
Calculating Scope 2 emissions isn’t just about compliance—it’s a foundation for action. Organizations can reduce Scope 2 impacts by:
Increasing energy efficiency (LED lighting, efficient HVAC, data center optimization)
Purchasing renewable energy (green tariffs, PPAs, on-site solar)
Transitioning operations to regions with lower-carbon grids
Engaging suppliers to provide cleaner energy options
Final Thoughts
Scope 2 is often one of the largest and most actionable parts of a company’s footprint. By following the GHG Protocol’s dual-method approach, businesses can accurately quantify their purchased energy emissions, make informed renewable energy choices, and demonstrate transparency in climate reporting.