There are two ways to calculate Scope 2 emissions from electricity: the market-based method and the location-based method.

The location-based method calculates emissions based on the average output from your local power grid. Essentially, this method assesses the emissions by considering the types of fuel used and the production methods at the typical electricity plant in your area.

The market-based method calculates emissions based on the contractual instruments underlying your purchased electricity. In other words, emissions are calculated based on the specific energy provider and energy tariff the company has chosen.

The GHG Protocol requires companies to report emissions using both methods, known as 'dual reporting.' However, for calculating the total corporate carbon footprint or setting targets, companies need to choose one method. This means that while electricity emissions are calculated according to both methods, only the emissions from the chosen method are actually counted.

In places where there aren't specific contracts meeting quality standards, only the location-based method is used.

To learn more, have a look at the GHG protocol scope 2 guidance.