Market-Based Method
Calculating Scope 2 emissions based on contractual energy purchasing arrangements
What is Market-Based Method?
The market-based method calculates Scope 2 emissions using emission factors derived from the contractual instruments associated with electricity purchases, such as Renewable Energy Guarantee of Origin (REGO) certificates or Power Purchase Agreements (PPAs).
Why It Matters for SECR
While optional for SECR, this method allows companies to demonstrate the impact of their renewable energy procurement decisions. Purchased green electricity can be reported as zero emissions under this method.
Examples
- 1
Green tariff with REGO certificates: 0 kg CO2e/kWh
- 2
Direct PPA with wind farm: 0 kg CO2e/kWh
- 3
Unbundled REGOs: may be questioned
SECR Reporting Requirements
Optional for SECR. If used, must disclose methodology and ensure renewable claims are credible.
Related Terms
How Market-Based Method Fits Into Your SECR Report
Understanding Market-Based Method is essential for accurate SECR reporting. This concept appears throughout the reporting process—from data collection to final disclosure. Make sure your finance and sustainability teams have a shared understanding of this term.
For practical guidance on applying this concept, see our calculation guides or use the compliance checker to assess your specific situation.
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