News from GGCS

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SBTi FAQ on market based reporting

Posted: 25 March, 2024. Written by Jesse Scharf

The SBTi have updated their FAQs related to market based reporting. 

In 2022 the FAQ's stated; 

The GHG Protocol does not allow for market-based approaches to scope 1, so the SBTi likewise does not recognize the use of "green gas" or biogas certificates to reduce scope 1 emissions. Companies must directly source biogas or biofuels to reduce emissions and even then will need to report on bioenergy accounting, certificates, and assumptions that justify emissions reductions from their use. In the future, with the publication of the GHG Protocol Land Sector and Removals Guidance, the SBTi will review the bioenergy criteria and make updates and modifications as needed. 

We believe that they were updated in Feb 2024 and now state the following; 

FAQs - Science Based Targets
What role do market based accounting approaches play in target setting with the SBTi? 

"When it comes to GHG emissions accounting, companies should follow guidance from the experts at the Greenhouse Gas Protocol (GHGP). Market-based accounting approaches include the use of certificates conveying emissions attributes that differ from the physical emissions attributes of a company’s activities.

The GHGP allows for market-based accounting for purchased steam, heat, electricity and cooling via the scope 2 market-based accounting approach. The GHGP does not provide guidance for market-based accounting for scope 1 or scope 3 emissions (with the exception of supplier- or customer-provided market-based emissions factors). Therefore, as part of the checks carried out during the target validation process, it is not currently possible for the SBTi to assess whether inventories that include market-based approaches to scope 1 and scope 3 emissions are aligned with the GHGP.

Other uses of market-based instruments, such as book-and-claim, are topics that require further research and clarification.

The SBTi is working with the GHGP to ensure we coordinate on requirements for corporate greenhouse gas inventories. As accounting standards evolve and further research is conducted by the SBTi, SBTi resources will be updated to reflect best practice."
 

See the GHGP interim position here for more details - https://www.greengas.org.uk/news/ghg-protocol-publishes-note-on-the-use-of-biomethane-certificates-and-emissions-reporting 

We await their response to the SBTi call for evidence in 2023 - no date or expected timeline has been given.