Market-Based Scope 2 Reframed: Will the Actions and Market Instruments Working Group Impact the Positioning of Scope 2? Soldera’s Stance Explained

The GHG Protocol’s Actions and Market Instruments workstream is trying to solve a real problem at the core of greenhouse gas accounting: how companies should report the effects of contractual instruments (and any other climate-positive actions) that aren’t able to slot perfectly into the physical GHG inventory. In their most recent white paper , they’ve landed on an approach called “Multi-Statement Reporting” , aiming to make this separation more distinct.

Soldera broadly supports this direction of market evolution, because market-based contractual instruments are only at their most effective when there is a clear separation between physical emissions accounting and market-based methods - after all, physical greenhouse gas emissions are the reality that market-based systems are trying to combat in a systemic manner, done by capturing the commercial reality of energy procurement. This is the responsible economic logic at the heart of dual reporting, after all: You should have to pay for your clean attributes to match your consumption , but also make it clear that you are not ignoring the local emissions factor of the grid at your consumption points - a figure that, as market participants, we are each hoping to make cleaner over time, one purchase at a time.

Traceability instruments are therefore key to aligning market incentives with those who are powering the energy transition - the producers. Complementary to this, the physical GHG inventory serves as the measurable baseline - how much our collective efforts and usage of tracking systems actually move the clean-energy needle in real life. But messaging around how we report our energy consumption has to be done carefully, which is why we’re somewhat concerned about the wording in the Actions and Market Instruments workstream’s latest release. Market-based Scope 2 shouldn’t be worded as something that can be downgraded or deprioritised - and failing to combat this undermines the work that participants take towards lowering the real-life emissions factors used in location-based reporting.

Why does the AMI framing matter for Scope 2 market-based reporting?

The AMI TWG materials repeatedly describe the physical GHG inventory as the “foundation” of corporate GHG accounting, rather than one half of it. It does this while presenting the new “market-based” statement whose required or mandatory status has not yet been settled, despite including market-based Scope 2 which is already mandatory. This overlap made it into the draft despite the AMI TWG admitting that Scope 2 requirements remain within the remit of the Scope 2 TWG. So why is this being inadvertently dragged into question, especially during a sensitive Scope 2 revision process ? And why was an explicit carve-out reaffirming the mandatory nature of market-based Scope 2 not made obvious?

We accept that it might be harmless, best-intentions drafting, but in Scope 2, optics, clarity and instrument desirability matter considerably, especially when it comes to supporting projects with greater additionality. Fostering corporate additionality is also secondary to the main point: Under the current GHG Protocol Scope 2 Guidance , companies operating in markets where contractual instruments exist must already report both location-based and market-based figures - dual reporting is already mandatory. It’s mandatory for good reason - these reporting methods are wholly complementary, and form a clean-cut operational mandate that acts as a core navigational framework for corporates traversing what is otherwise a highly complex market and policy sphere.

Could AMI accidentally weaken the Scope 2 revision process?

As mentioned, Scope 2 is also being revised right now. The Scope 2 Technical Working Group is currently considering changes to strengthen market-based accounting, including hourly matching and geographic deliverability - and these are fundamental ecosystem changes that will trickle through the entire market, as various standards such as SBTi as well as legal regimes such as CSRD, SECR and SRS that each incorporate definitions and accounting practices from the GHG Protocol. SBTi is coincidentally a great example of what using wording carefully looks like - their latest Corporate Standard for Net Zero (CNZS v2) taxonomised market-based claims within a new category: system contribution claims. This method moves away from recognising EACs as core emissions reductions tools - but rather than reducing EACs to something that feel peripheral, SBTi adopts a new category of claim that recognises the utility of EACs as an instrument of the energy transition. When used to advance low-carbon electricity targets under SBTi, EAC cancellations now reflect a “system-contribution”.

The AMI TWG should therefore assess the potential downstream effects of their most recent paper and exercise caution before making market-based Scope 2 look secondary, non-”foundational”, discretionary, or merely “complementary” to location-based reporting. The cleaner answer is to explicitly reiterate that:

• Scope 2 location-based and market-based reporting remain within the Scope 2 workstream
• Any AMI terminology must preserve the mandatory status of market-based Scope 2

EAC revenues contribute to viable business models for thousands of renewable producers, including the 4,000+ production facilities using Soldera’s platform. As we mentioned in our response to the AMI’s May consultation, “We have first-hand insight into how EACs form part of the commercial model for many renewable energy producers. We consider any material or narrative risk to the desirability or utility of EACs, especially when inadvertently seeded by a working group of the most widely respected and adopted GHG reporting protocol, a risk that extends to the commercial viability of energy production and the energy transition itself.” Soldera’s response will eventually be made public, and it was very clear: wording matters, and we must reiterate that mandatory market-based Scope 2 reporting is integral to any fair and robust corporate sustainability protocol.