The market-based method uses specific contractual arrangements for power procurement to calculate emissions. Here are the types of market-based emission factors, listed by preference for precision:

1. Energy Attribute Certificates

These certificates, like Renewable Energy Certificates (RECs) or Guarantees of Origin (GOs), come with emission factors that can be used to measure emissions. Ensure the certificate meets the quality criteria. Certificates usually represent renewable energy and may have an emission factor of zero but can have a nonzero factor if they involve fossil fuels or biomass.

2. Contracts

Power purchase agreements (PPAs) or similar contracts can be used if no certificates are available. The emission factor is tied to the generating facility named in the contract. If certificates are issued for the facility, their emission factor applies. If the certificates are sold separately, the purchaser cannot claim the emission factor and should use the residual mix factor instead.

3. Supplier-Specific Emission Factor

Electricity suppliers may provide emission factors for their products, which should include all electricity supplied, both generated and purchased. Ensure it represents the full delivery, not just the supplier's own generation.

4. Residual Mix Factor

This factor accounts for emissions after certificates, contracts, and supplier-specific factors are excluded. It's preferred when other specific factors can't be applied to avoid double-counting emissions. Residual mix factors are not always available, but organisations should check annually and disclose any lack of these factors in their scope 2 reporting.

5. Regional Emission Factor

If no residual mix factors are available, use the regional grid average emission factor as a default.

6. National Emission Factor

If neither residual mix nor regional factors are available, use the national grid average emission factor as a default.

See GHG Protocol Scope 2 Guidance (table 6.3) for more information.