Scope 2 Emissions

Scope 2 emissions are indirect greenhouse gas emissions resulting from the generation of purchased electricity, steam, heating, and cooling consumed by a company. While the emissions physically occur at the power generation facility, they are attributed to the company because its energy demand drives the production.

The GHG Protocol defines two accounting methods for Scope 2:

• Location-based method: Uses average grid emission factors for the region where electricity is consumed. This reflects the actual emissions intensity of the local grid.
• Market-based method: Uses emission factors from contractual instruments such as Renewable Energy Certificates (RECs), Power Purchase Agreements (PPAs), or supplier-specific emission rates.

Under the CSRD and ESRS E1, companies must report Scope 2 emissions using both methods, providing stakeholders with a complete picture of their electricity-related carbon footprint.

Common strategies for reducing Scope 2 emissions include:

1. Renewable energy procurement , signing PPAs or purchasing green tariffs
2. Energy efficiency improvements , upgrading lighting, HVAC, and building insulation
3. On-site generation , installing solar panels or other renewable energy systems
4. Electrification , shifting processes from fossil fuels (Scope 1) to electricity, then greening the electricity supply

For many office-based and service companies, Scope 2 is the most significant and actionable emissions category. It offers a clear pathway to reduction through energy procurement decisions.

Dcycle’s platform automatically integrates with energy providers to calculate both location-based and market-based Scope 2 figures.