Scope 2 Market-Based Accounting and EAC Advisory
Scope 2 market-based accounting lets a company report electricity-related emissions using qualifying contractual instruments, including energy attribute certificates such as I-REC(E). Financely advises generators and corporate offtakers on how those instruments are documented and contracted. It is not an issuer, a registry, or the party that signs the company's greenhouse gas inventory.
What is Scope 2 market-based accounting?
Scope 2 market-based accounting is the GHG Protocol method that reflects the electricity a company has chosen through qualifying contractual instruments. Those instruments can include energy attribute certificates, direct contracts, and supplier-specific rates. Where a company has no qualifying instrument, it uses other factors in the Protocol hierarchy, including a residual mix when one is published.
The GHG Protocol Scope 2 Guidance also requires a location-based inventory, which uses grid-average emission factors for the grids on which energy is consumed. Companies in markets that provide product or supplier-specific contractual data are expected to report both methods and label each result. That dual reporting is a Protocol requirement. It is not a Financely reporting product, and Financely does not sign or assure inventories.
Energy attribute certificates, including I-REC(E), renewable energy certificates in some national systems, and guarantees of origin in others, are one class of contractual instrument. For a market-based claim they must meet the Scope 2 Quality Criteria in the Guidance. Those criteria are about exclusive ownership, residual-mix treatment, vintage and market relationship, among other tests. The Guidance is the controlling text. This page does not restate every criterion as if it were a substitute for the Protocol.
The GHG Protocol has also been consulting on updates to the market-based method, including possible hourly matching and deliverability tests. Those proposals are not treated here as adopted rules. Clients should follow the version of the Guidance that applies to the reporting year they are preparing, and should watch the official GHG Protocol Scope 2 pages for any later decision.
How do I-REC(E) certificates fit a market-based claim?
I-REC(E) certificates are energy attribute certificates issued under an accredited product code, for electricity from a registered device and later redeemed by or for an end user. They can support a market-based Scope 2 claim when the instrument and the redemption meet the Quality Criteria and the buyer's reporting policy. They do not, by themselves, change the location-based inventory.
A generator that wants its certificates to be usable in that way needs a clean device registration, exclusive attribute rights, issuance against verified production, and a redemption path the buyer can evidence. That is why this service sits next to the India solar I-REC page and the group guide on how to generate I-RECs. This page covers the claim-grade contracting and documentation angle, not a second device-registration hub and not a second India page.
I-REC(E) certificates are not carbon credits. A company that also buys voluntary carbon credits is making a different claim, under different rules. Carbon credit placement remains on the live page for carbon credit OTC placement services. Mixing a redeemed I-REC(E) and a retired carbon credit into one undifferentiated "green claim" is a reporting error this engagement is designed to avoid.
What do RE100 technical criteria add for corporate buyers?
RE100 technical criteria are the rules RE100 member companies observe when procuring renewable electricity and defining progress toward an RE100 target. Other corporate buyers also use them as a guide. In markets where energy attribute certificates are in common use, RE100 generally requires cancellation of those certificates to support a grid-sourced renewable electricity claim, with limited stated exceptions.
The March 2025 technical criteria also stress that certificates must be issued to generation located in the same market as the electricity supply being claimed. A purchase of renewable electricity generated in one market cannot be equated to consumption in a different market. Unbundled certificate purchases are allowed, but they sit on top of a separate electricity purchase and are not the same as a bundled project contract or a physical power purchase agreement.
Financely can help a generator or offtaker map whether a proposed I-REC(E) delivery is likely to be accepted under those criteria, and can help document market boundary, vintage, technology and cancellation evidence. It does not decide RE100 compliance and it does not submit a company's RE100 reporting.
| Claim or report | What the buyer is usually evidencing | What this advisory can support |
|---|---|---|
| Location-based Scope 2 | Grid-average emissions where electricity is consumed | Alignment of site lists and consumption data with the certificate story, not a replacement inventory |
| Market-based Scope 2 | Qualifying contractual instruments, or residual mix or other hierarchy factors if no instrument meets the criteria | Contract, issuance and redemption evidence for I-REC(E) or other EACs |
| RE100 progress | Renewable electricity procurement that meets the current RE100 technical criteria, including cancellation in markets where EACs are in common use | A file that a buyer can take to its own RE100 and assurance process |
| 24/7 or hourly matching | A tighter time and location match, often using granular certificates | A scoping discussion only. Annual I-REC(E) matching is not automatically 24/7 CFE |
What does Financely do on a Scope 2 EAC mandate?
Financely is an advisor and arranger. It helps generators prepare claim-grade issuance and offtake files, and it helps corporate buyers or offtakers specify what evidence they need in a contract. It does not issue or redeem certificates as a registry function, it does not write the company's official greenhouse gas inventory, and it does not provide assurance.
Where the same client needs the underlying plant financed, that work stays on the existing pages for solar and renewable energy project finance and raising equity for a renewable energy project. Where the client also has a carbon project, start from the carbon project consulting hub and keep the EAC file separate.
Retained work typically sits in the USD 50,000 to 200,000 band, with a USD 500 intake first. Productized reviews, where they fit, start from USD 2,000 and can run to USD 100,000 or more by quote. Terms are confirmed in an engagement letter. This page does not invent certificate prices or state a success fee.
Frequently asked questions
Does an I-REC(E) certificate automatically satisfy Scope 2 market-based reporting?
No. I-REC(E) can support a market-based claim when the instrument and the redemption meet the GHG Protocol Scope 2 Quality Criteria and the buyer's reporting policy. The buyer still reports a location-based inventory as well. Financely can help document the file. It does not sign the inventory or decide Protocol compliance.
What is a residual mix in Scope 2 accounting?
A residual mix is a default emission factor for untracked or unclaimed electricity in a market. The GHG Protocol Scope 2 Guidance uses it in the market-based method when a company does not have other contractual instruments that meet the Quality Criteria. Companies should use a published residual mix where one exists, rather than inventing their own factor.
Are I-REC(E) certificates the same as carbon credits?
No. I-REC(E) certificates are energy attribute certificates for electricity. Carbon credits represent verified emission reductions or removals under a carbon crediting program. They support different claims and should be contracted and evidenced separately. Financely will not treat a redeemed certificate as a substitute for a retired carbon credit.
Do RE100 rules always require I-REC cancellation?
RE100 technical criteria generally require energy attribute certificate cancellation for grid-sourced renewable electricity in markets where those certificates are in common use. The criteria list limited exceptions, including some self-generation and certain direct-line supplies. The current RE100 technical criteria are the controlling text. Financely does not certify RE100 progress.
Has the GHG Protocol already required hourly matching?
The current Scope 2 Guidance, which companies still use for reporting, is the 2015 market-based method with annual matching conventions. The GHG Protocol has consulted on possible updates, including hourly matching and deliverability. Those proposals should not be treated as adopted rules until the Protocol says they are in force for a given reporting year.
Can Financely issue I-RECs or assure a Scope 2 inventory?
No. Local issuers issue I-REC(E) certificates on the Evident registry after checking production data. The company, and any assurer it appoints, owns the inventory. Financely is an advisor and arranger. It helps prepare contracts and evidence. It is not an issuer, a registry, an assurer, or a reporting authority.
If you want advisory support on Scope 2 market-based evidence or I-REC(E) offtake documentation, submit the file through the deal submission form. Financely is an advisor and arranger only. It is not an issuer, a registry, or a greenhouse gas assurer.