Carbon accounting
Location-based Scope 2 uses the average emissions of the grid you are physically plugged into. Market-based uses what you contractually bought — a green tariff, a power purchase agreement, or renewable energy certificates. A company with any operations in a market where such contracts are sold must report both figures and label each one. The GHG Protocol calls this dual reporting.
Location-based answers "what did the grid emit while I was drawing from it". Market-based answers "what did I choose to buy". They can differ enormously for the same building: a company on a fully renewable contract may report a location-based figure of hundreds of tonnes and a market-based figure near zero.
Both are legitimate, which is why the 2015 Scope 2 Guidance requires dual reporting rather than picking a winner. Reporting only the market-based number hides your actual physical draw on the grid; reporting only the location-based number hides that you paid for cleaner power.
If you have no renewable contract, no green tariff and no certificates — which is the case for most SMEs — your market-based figure uses a residual mix or, absent that, the same grid factor, and the two numbers are effectively the same. Note what triggers the duty: it is having operations in a market where such contracts are sold, not having bought one. The Guidance says in terms that not having contractual data for every site does not put you out of compliance.
Sources checked 30 September 2026