Greenhouse Gas Protocol: Market-based and Project Accounting Approaches: Where We Are Now



This update first appeared on 14 December 2023 on the website of the Greenhouse Gas Protocol, led by WBCSD and WRI, under the following link.

Status Update

GHG Protocol is planning updates and additional guidance for its Corporate StandardScope 2 GuidanceScope 3 Standard, and supporting documents. The aim of the current corporate standards update process is to align with best practice approaches to ensure GHG Protocol standards for scope 1, scope 2 and scope 3 are effective in providing a rigorous and credible accounting foundation for businesses to measure, plan and track progress toward science-based and net-zero targets in line with the Paris Agreement and to keep the 1.5°C goal in reach. Any future updates will seek harmonization and alignment with accounting rules under development through major disclosure initiatives and coordination with other key programs and initiatives. 

As part of the standards update process, GHG Protocol will examine how organizations account for and report efforts to mitigate their climate impacts, including the roles of market-based accounting approaches and/or project accounting methods (i.e., quantification of reduced or avoided emissions compared to a baseline scenario, building on existing standards and guidance). GHG Protocol plans to provide guidance addressing the role of such methods in GHG emissions reporting and/or target setting. Guidance is expected to highlight the role of programs and policymakers in defining target setting and programmatic rules, for example, related to eligibility of market instruments. 

In a dedicated survey and proposals process, GHG Protocol received nearly 350 responses and over two dozen proposals for market-based and/or project accounting approaches. Feedback was provided across a variety of different sectors, including natural gas/biomethane, aviation fuels (SAF), agricultural commodities, freight transport, maritime shipping, steel, aluminum, and others. Such proposals have typically arisen in cases where companies purchase products or commodities from common pools or distribution systems and when direct contracting with suppliers or identifying individual points of origin are difficult or infeasible. 

In October, GHG Protocol hosted a webinar highlighting topline findings from the stakeholder feedback on the market-based accounting approaches survey, which can be viewed here. A written summary of the findings is forthcoming and will be input into the workplan beginning in early 2024. 

Get Involved

GHG Protocol follows a multistakeholder standards development process. In November 2023, Greenhouse Gas Protocol launched a new governance structure, which includes a Steering Committee, Independent Standards Board and Technical Working Groups. We are currently accepting applications for membership in these bodies, including from experts that can address key topics in market-based accounting approaches and project accounting, as explained further in the webinarApplications are due January 15, 2024. More details about the different bodies and information on how to apply can be found here.

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