GHG Accounting

This EPRI report examines practical challenges companies may face when procuring low-carbon electricity resources under new spatiotemporal matching requirements proposed by the Greenhouse Gas Protocol (GHGP) in its 2025 Scope 2 Public Consultation. The proposed revisions would require companies reporting greenhouse gas (GHG) emissions from purchased electricity using the scope 2 market-based method to move from annual matching of purchased electricity and end-use consumption to hourly matching, while also requiring qualifying electricity to be generated in the same geographic location where it is consumed. This report provides insights into how these proposed scope 2 requirements may affect corporate voluntary procurement of renewable electricity and other low- and non-emitting resources, the future capital that may be deployed to acquire hourly matched and geographically constrained energy resources, and key challenges companies and other stakeholders may encounter when procuring qualifying electricity.

Recent proposed revisions to the Greenhouse Gas Protocol (GHGP) Scope 2 Guidance may significantly increase the geographic and temporal granularity required for location-based method (LBM) of scope 2 greenhouse gas (GHG) emissions accounting. While these changes are intended to improve accuracy, transparency, and comparability of corporate inventories, they may also introduce unintended internal consistency challenges when applied across regions with overlapping electricity grid boundaries. This white paper examines how the proposed emission factor (EF) hierarchy, particularly the prioritization of subnational and hourly EFs, can result in the overlapping attribution of grid emissions within a single corporate scope 2 inventory. The analysis demonstrates how mechanically applying the most granular accessible EFs at the facility level can lead to double counting of the same underlying generation resources and concludes by outlining practical approaches reporting entities can use to mitigate these double counting risks.

Corporate greenhouse gas (GHG) emissions accounting seeks to provide an estimate for the GHG emissions attributable to an entity, such as an electric company or combined utility. GHG emissions accounting relies on voluntary guidance designed to enable the development of high-quality emissions inventories. However, when leading guidance documents lack consensus or sufficient specificity, entities may apply differing methods to complete their GHG emissions inventory, raising concerns for inventory quality. This EPRI report aims to illuminate existing challenges faced by electric companies and combined utilities when developing their corporate GHG emissions inventories. By articulating these challenges, electric companies can better identify issues and engage with entities that develop and maintain GHG emissions accounting guidance and other stakeholders to develop solutions that address these challenges.

Corporate greenhouse gas (GHG) emissions accounting is a complex and inexact undertaking. Electric companies and combined electric and natural gas utilities typically rely on guidance provided in protocols developed by non-profit organizations to account and report their corporate GHG emissions voluntarily and as required by federal and state regulations. This report explores the current landscape of GHG emissions reporting guidance, standards, and requirements, including a discussion of commonly used voluntary standards and key requirements of mandatory reporting frameworks.

As a consequence of significant and growing stakeholder and regulatory interest in “climate disclosure” and transparent accounting of corporate scope 1, 2, and 3 emissions, there is a growing need for electric companies and combined electric and natural gas utilities to conduct technically grounded greenhouse gas (GHG) emissions accounting and reporting.

To address this need, EPRI’s program on Energy, Environmental, and Climate Policy Analysis (P201) in 2021 completed a supplemental project focused on transferring in-depth technical knowledge and expertise related to scope 1 and 2 emission accounting and reporting. In 2023, EPRI launched a follow-up project focused on “Scope 3 Greenhouse Gas Emissions Accounting for Electric Companies and Combined Utilities” to provide technical insight into accounting and reporting for the 15 scope 3 emissions accounting categories. During the course of completing these two projects, EPRI identified a variety of key issues and special topics associated with GHG accounting for electric companies and combined utilities that require deeper understanding and investigation.

To address these topics more directly, EPRI launched a follow-up supplemental project in 2024 on Special Topics in Greenhouse Gas Emissions Accounting for Electric Companies and Combined Utilities. This report is a compendium of briefing papers and Frequently Asked Questions (FAQ) developed to support a series of webcasts EPRI hosted in 2024 and 2025 as part of this supplemental project. This technical transfer project focused specifically on improving participants’ understanding of (i) accounting and reporting for electricity and natural gas transmission and distribution related emissions in scope 1, 2, and/or 3; (ii) location- and market-based approaches to GHG accounting for scope 2 indirect emissions; (iii) GHG inventory base year recalculation methods and approaches; and (iv) scope 3 insetting.

This Quick Insight report describes locational marginal emissions rates (LMERs) and how they are calculated, how they are used, who is interested in using them and what entities currently are providing LMERs for large power systems in the United States. It explores different approaches that may be used to calculate LMERs and the strengths and weaknesses of these approaches. This reports also summarizes EPRI’s analysis of a PJM dataset that calculates marginal emission rates at a five-minute granularity.

How can electricity market operators accommodate state and federal greenhouse gas reduction policies in their market design and operation?

This Quick Insight summarizes a new EPRI technical report published in August 2024 that describes how accounting for and valuing carbon dioxide (CO2) emissions — and more broadly greenhouse gas emissions (GHGs) — has been implemented in wholesale power markets in the United States and the European Union (EU). The power markets discussed include the CAISO, CAISO’s WEIM, NYISO, SPP’s Markets+ in the U.S. and the wholesale power market in the EU. It explores how these markets have tried to address the technical challenges associated with implementing carbon pricing, particularly when the footprint of a wholesale power market overlaps with different carbon polices across the footprint. This report also describes the challenges associated with accounting for GHG emissions in the context of wholesale power markets in which electricity is centrally dispatched to end-use customers.

This EPRI report describes how accounting for and valuing carbon dioxide (CO2) emissions — and more broadly greenhouse gases (GHGs) emissions — has been implemented in wholesale power markets in the United States and the European Union. This includes programs such as the GHG emissions "cap-and-trade" regulatory programs operating today in California, Washington, and the 11 states in the northeast United States that comprise the Regional Greenhouse Gas Initiative. It also includes the EU Emissions Trading Scheme. This report explores how these carbon markets and the related wholesale electricity markets have tried to address the technical challenges associated with implementing carbon pricing, particularly in situations in which the footprint of a wholesale power market overlaps with different carbon polices across the footprint. This report also describes the challenges associated with accounting for GHG emissions in the context of wholesale power markets in which electricity is centrally dispatched to end-use customers.

Electric companies emit greenhouse gases (GHG) from a wide range of activities. These emissions often are characterized for accounting and reporting purposes as direct or indirect emissions. Direct emissions, referred to as “scope 1,” result from company activities that physically release (or remove) GHGs to (or from) the atmosphere, such as burning natural gas to generate electric power. Indirect emissions can be either scope 2 or scope 3, and result from other indirect activities that are essential to a company’s operations, such as fuel transport to a power generation facility. The World Resources Institute (WRI) Corporate Value Chain (Scope 3) Accounting and Reporting Standard defines 15 categories of reporting scope 3 emissions, separated into upstream and downstream designations. In the standard, upstream refers to the GHG emissions from purchased or acquired goods and services and downstream refers to the GHG emissions from the sale of goods and services by reporting entity.

This report is a compendium of briefing papers and Frequently Asked Questions (FAQ) developed to support a series of webcasts EPRI hosted in 2023 and 2024 as part of an EPRI supplemental project on Scope 3 Greenhouse Gas Emissions Accounting for Electric Companies and Combined Utilities. This technical information transfer project was designed to improve participants’ understanding of how to account and report scope 3 indirect GHG emissions; determine relevant scope 3 categories and methods to calculate them; familiarize participants with existing GHG accounting protocols and scopes; and help company staff and managers learn to communicate more clearly and effectively about their company’s GHG emissions.

Electric companies and combined electric and natural gas utilities emit greenhouse gases (GHG) from a wide range of activities. A myriad of voluntary and mandatory GHG accounting frameworks exist in the United States and internationally that a company may use to account for and report their GHG emissions. These frameworks use different GHG accounting methods, estimation techniques, and reporting guidelines and are often ambiguous. The major existing GHG accounting frameworks and guidance are intentionally generic and non-sector-specific, resulting in technical gaps for specific economic sectors. One of the areas lacking technical guidance in the energy sector relates to accounting for GHG emissions associated with “common carrier” energy infrastructure, such as natural gas pipeline and electric system transmission and distribution infrastructure.

This EPRI technical update report summarizes existing GHG accounting guidance from the perspective of entities that own common carrier energy infrastructure, both for voluntary and mandatory GHG accounting and reporting purposes. The report provides an overview of GHG accounting, emission sources associated with common carrier energy infrastructure, the setting of emissions reporting boundaries, and explores the different interpretations of existing voluntary GHG emissions accounting guidance relevant to reporting GHG emissions from common carrier natural gas and electricity infrastructure.