What is the difference between the two methods?

The location-based method uses the average grid emission factor for the region, regardless of any contracts. The market-based method reflects the emissions of the specific electricity you chose to purchase, using energy attribute certificates and supplier-specific or residual-mix factors.

Why does the GHG Protocol require both numbers?

The Scope 2 Guidance mandates dual reporting so that stakeholders see both the physical grid reality of where you consume power and the contractual choices you made. Reporting only the lower market-based figure without the location-based one is not compliant.

What is a residual mix factor?

It is the emission factor of the electricity left on the grid after all certificates have been claimed by others. You apply it to the portion of your consumption not covered by your own certificates, so you do not double-count renewables already claimed elsewhere.

What counts as an energy attribute certificate?

REGOs in the UK, Guarantees of Origin (GOs) in the EU, and RECs in North America are the main instruments. Each certificate represents the attributes of one MWh of generation and lets you claim that electricity under the market-based method.

What does the coverage gap tell me?

The gap is the consumption not yet matched by certificates, valued at the residual mix factor. It shows the emissions you could still eliminate from your market-based figure by procuring certificates or a power purchase agreement for the remaining volume.

Scope 2 Market-Based vs Location-Based Emissions Comparator

The GHG Protocol Scope 2 Guidance requires companies to report electricity emissions two ways: a location-based figure using the average grid factor, and a market-based figure reflecting the specific power you contracted for. This tool computes both from your own data and shows exactly how much of your consumption your certificates cover.

How it works

Both methods start from the same consumption but apply different emission factors:

location-based = consumption (kWh) × grid factor (kgCO2e/kWh)

covered kWh    = min(certificate kWh, consumption)
uncovered kWh  = consumption − covered kWh
market-based   = covered kWh × certificate factor
               + uncovered kWh × residual-mix factor

coverage %     = covered kWh / consumption × 100
gap emissions  = uncovered kWh × residual-mix factor

If you hold certificates for every kWh at a zero emission factor, your market-based total falls to zero while the location-based total is unchanged — which is exactly why both numbers must be reported.

Example and notes

Take 1,000,000 kWh on a grid factor of 0.20 kgCO2e/kWh. The location-based total is 200 tCO2e. If you hold zero-emission certificates for 600,000 kWh and the residual mix is 0.45 kgCO2e/kWh, the market-based total is 0 + 400,000 × 0.45 = 180 tCO2e — higher per uncovered kWh than the grid average, because the residual mix excludes the renewables others have already claimed. Closing the 40 percent coverage gap with certificates would remove the remaining 180 tCO2e from your market-based figure.