University of Edinburgh Business School

Renewable Energy Purchasing and the Market-based (Scope 2) Method

Electricity generation accounts for roughly 25% of global greenhouse gas (GHG) emissions annually. Ensuring these emissions are measured accurately so that action can be taken to reduce them is essential for tackling climate change.

However, the ‘market-based method’, which is becoming increasingly prevalent, encourages companies to buy green energy certificates and claim zero total emissions from electricity use. There are at least two major problems with this practice:

  1. The market for contractual emission factors/renewable attributes does not increase the amount of renewable generation (and therefore does not help to reduce emissions)
  2. The market-based method results in GHG accounts that do not accurately reflect the emissions caused by organisations’ activities

There is a growing body of research and evidence on the problems caused by this practice. This page is intended as a hub for research and information on this issue.

Research and Further Information

Research Articles

Letters

Renewable Energy Directive

Reports

UK Standard Licence Conditions

Ofgem Press Release

UK Government Statement

I want to make sure that the green tariff market, which has grown rapidly over recent years, is clear for consumers and businesses about the precise benefit their tariff brings. Many energy suppliers offer green tariffs to businesses and domestic customers who want to make a contribution to environmental projects or help tackle climate change, but these differ in what they deliver.

It is increasingly difficult to demonstrate that buying a renewable electricity tariff is offering additional carbon emissions reductions compared with what suppliers are required to source to meet the Renewables Obligation. I have therefore decided that we will change the voluntary corporate reporting guidelines to bring them into line with current best practice and provide coherent carbon accounting. This will mean that for the reporting year 2008-9, best practice is expected to be for businesses to use a grid average rate – average rate of carbon emissions associated with electricity transmitted on the national grid – unless their supplier can prove the carbon benefits are additional.

Secretary of State for the Environment (2008)

Source: Defra Archive

Media Coverage

Videos

Blogs

Get in Touch

For further information or to suggest additional material for this page, please contact Dr Matthew Brander.