Scope 2 Emissions

Scope 2 emissions are the indirect greenhouse gas (GHG) emissions associated with the purchased electricity, steam, heat or cooling that an organisation consumes. Although the emissions physically occur at the energy producer's facilities, they result from the organisation's own consumption, which is why they are attributed to it. Unlike Scope 1 emissions, which are direct, Scope 2 covers the energy a company buys rather than generates.

Typical Scope 2 activities include:

• Electricity drawn from the grid.
• Steam, heat or cooling produced at external plants.

Including Scope 2 in the carbon footprint gives a fuller picture of an organisation's impact and helps target reductions through efficiency, renewable energy or other decarbonisation measures.

How Scope 2 emissions are calculated

The Greenhouse Gas Protocol, the most widely used international standard for GHG accounting, defines two methods in its Scope 2 Guidance (2015), and best practice is to report both:

1. Location-based method: uses the average emission factor of the electricity grid where the energy is consumed, multiplied by the energy used.
2. Market-based method: reflects the specific energy the organisation has contracted, using instruments such as renewable energy certificates (RECs) or Guarantees of Origin.

The location-based method is simpler but may not reflect cleaner-than-average procurement; the market-based method is more precise but requires robust tracking and documentation.

Emission factors and data sources

Emission factors express the GHG emitted per unit of energy and vary by source (coal, natural gas, renewables) and technology. Common sources include:

• National and international emission-factor databases.
• Energy supplier disclosures.
• Government agencies and statistical offices.

How to reduce Scope 2 emissions

• Energy efficiency: optimising lighting, heating, cooling and equipment to cut consumption.
• Renewable energy: procuring solar, wind, hydro or biomass electricity, ideally through power purchase agreements.
• Certificates of origin: using RECs or Guarantees of Origin to back renewable consumption under the market-based method.

Scope 2 and regulation

Climate legislation increasingly requires companies to measure and report their emissions, including Scope 2. Frameworks such as the EU Emissions Trading System and reporting under the GHG Protocol set the basis for emissions accounting. At Manglai we help companies measure their carbon footprint and prepare their sustainability reporting. Discover how Manglai can help you.