GHG Protocol Plans Market-Based Accounting Guidance Across Multiple Sectors

The Greenhouse Gas Protocol confirmed plans to develop guidance on market-based and project accounting approaches as part of its corporate standards update process, after receiving nearly 350 survey responses and over two dozen proposals. Sectors requesting guidance include natural gas, aviation fuels, agricultural commodities, maritime shipping, steel and aluminium.

GHG Protocol's standards update process is examining how organisations account for and report efforts to mitigate climate impacts, including the appropriate roles of market-based instruments and project-level avoided emissions quantification. In October 2023, the initiative hosted a webinar presenting topline findings from the market-based accounting survey, with a written summary forthcoming to inform workplan development beginning in early 2024. The proposals typically arise in sectors where companies purchase products from common pools or distribution networks and direct source attribution is impractical.

The guidance will address procurement of biomethane, sustainable aviation fuel, green steel, low-carbon aluminium and agricultural commodities — all categories where market-based certificate systems are emerging or already operating. For India, which is developing green hydrogen, green ammonia and bio-based fuel programmes, the GHG Protocol's stance on market-based accounting will determine whether companies investing in these commodities can claim emissions reductions in their scope 1 or scope 3 inventories.

The GHG Protocol launched its new governance structure in November 2023, with applications for the Steering Committee, Independent Standards Board and Technical Working Groups due by 31 January 2024. Experts with knowledge of market-based accounting approaches are specifically invited to apply. The guidance on market-based accounting is expected to establish principles that programmes and policymakers can draw on to define eligibility rules for specific market instruments in target-setting and disclosure contexts.

Key figure — 350 responses and 24+ sector-specific proposals received on market-based accounting