Guide to Location-Based Scope 2 Methodology: 2026 Emission Factors

Location-based Scope 2 emissions represent the indirect GHG impact from purchased electricity, and are calculated using the average carbon intensity of the regional power grid supplying your operations. This differs from market-based accounting, which relies on contractual instruments.

Instead, you're working to convey the physical grid reality in your reporting. All consumers within a defined grid region are assigned identical emission factors. This is necessary because electricity loses any distinguishing characteristics once it enters shared transmission networks, so the grid becomes the source of truth.

This guide serves as an introduction to location-based Scope 2 reporting. If you're seeking market-based reporting guidance, you should consult our dedicated article here.

Which GHG disclosure regime do I follow?

Multiple regulatory regimes mandate location-based Scope 2 reporting, implementing the GHG Protocol to varying degrees as a foundational standard, though organizations must meet specific jurisdictional requirements. Multi-jurisdictional organizations may operate under several regimes simultaneously.

‍

This overview provides informational content only. Verify all regulatory requirements independently.

How do I find my consumption data?

First, draw your boundaries. Boundary establishment determines which entities, operations, and consumption fall within your calculation and chosen timeframe. The GHG Protocol offers three consolidation approaches: equity share, financial control, or operational control, with financial control most common (consolidating 100% of emissions from all financially controlled entities regardless of the percentage owned of each).

To consolidate consumption data, you'll need to collect metered electricity consumption for every site within your boundaries. That means unearthing utility bills, smart meter data, or any data stored within building management systems.

Once you've got the data to determine the total kWh or MWh per in-boundary facility, here's a quick checklist to follow:

1. Document data sources by noting whether data comes from utility bills, internal meters, landlord allocations, or building-level estimates.
2. Keep your scopes hygienic by separating purchased & generated power. Only purchased enters Scope 2.
3. Exclude sold/exported electricity - if you export surplus generation back to grid, subtract this from consumption data
4. Flag any estimates or data gaps, also documenting how these were filled.
5. Ensure unit consistency (kWh vs. MWh).

How do I find the right emission factors?

The GHG Protocol establishes a strict hierarchy:

1. Direct Line Factors from specific generators
2. Subnational Grid Averages
3. National Grid Averages (UK/EU standard)
4. Continental/Regional Averages (avoid).

Calculation: Location-Based Emissions (tCO₂e) = Electricity Consumption (MWh) × Emission Factor (tCO₂e/MWh). Organize by grid region, applying the emission factor to each site (e.g., 10,000 MWh × 0.450 tCO₂e/MWh = 4,500 tCO₂e), sum all sites.

Need a quick location-based calculation? Access our free calculator here

Lastly, reporting your location-based Scope 2 emissions

Reporting requires four mandatory elements:

1. Gross location-based total expressed in tCO₂e with clear labeling as "Location-Based".
2. Emission factor source documentation citing specific sources.
3. Boundary description summarizing scope, consolidation approach, and time period.
4. Explicitly disclose any exclusions and limitations that you made
5. Methodology explained clearly, offering concise explanation of your calculation approach.
6. Evidence pack assembly including consumption data, factor source documentation, calculation worksheets, boundary documentation, and estimation logs
7. Dual reporting presentation clearly differentiating location-based from market-based figures.

No disclosure is complete without market-based reporting

Location-based calculations are straightforward, but they form only part of the complete compliance picture. Let's face it - they're simpler because the majority of the work is already done. Emissions factors are published, and you're only responsible for finding your own data and following a clearly outlined process.

However, the GHG Protocol and most local disclosure regimes also mandate reporting market-based figures, which reflects emissions reductions achieved through Energy Attribute Certificate (EAC) procurement. The procurement process can be as straightforward as a file upload: Soldera's AI platform automates the entire market-based process, procuring the right EACs directly from thousands of member producers and producing disclosure-ready downloads.

Create an account to match consumption data with valid EACs automatically, ready for assurance in minutes.