GHG Emissions Reporting

This is because the GHG Protocol Standard Scope 2 Guidance requires that if you are operating in a region where product or supplier-specific data is accessible, then you must report both location-based and market-based Scope 2 emissions. 

From a review of published FY23 climate reports, 8 reports stated GHG emissions were prepared in accordance with the GHG Protocol Corporate Standard, and only 1 out of the 8 reports disclosed Scope 2 emissions under the market-based method.

Dual reporting is required even if you have not entered into any energy-related contractual instruments. This means that even if your entity has not purchased energy attribute certificates, or specific renewable energy, you should still be reporting Scope 2 emissions under the market-based method. In our view, this also aligns with the objective of reporting the impact of an entity’s purchasing decisions.

Not necessarily. The guidance requires you to use a residual mix factor in the first instance if there is one available. Only if a residual mix factor is not available would you use the location-based method emissions factor, which can be sourced from the Measuring Emissions Guide published by the Ministry of Environment. 

The residual mix factor is typically higher than the location-based grid-average emission factor because it excludes renewably generated electricity sold under contractual instruments like RECs and represents the mix of electricity that remains. Hence, this typically leads to higher Scope 2 emissions reported under the market-based method. But this is expected as the market-based method reflects an entity’s purchasing decisions. In New Zealand, there is a residual mix factor publicly available for use.

Since residual mix factors are available for use in New Zealand, we believe that entities should be using these to report market-based Scope 2 emissions even if they have not purchased renewable energy certificates or similar.