What Scope 2 means for Australian organisations, how location-based and market-based methods differ and why time-matched calculations matter under ASRS.
Scope 2 emissions are the greenhouse gases attributed to the electricity, heat or steam you purchase. For most Australian commercial organisations, Scope 2 is dominated by grid electricity. It sits between Scope 1 (direct emissions from your own operations) and Scope 3 (indirect emissions across your value chain).
The location-based method multiplies your electricity consumption by the average emission factor for your grid region. In Australia, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) publishes these factors annually. A site in NSW uses the NSW grid average; a site in Victoria uses the Victorian grid average.
This method is simple but treats all kilowatt-hours the same regardless of when they were consumed. A factory running at 2am (high coal share) and one running at 2pm (high solar share) get the same emission factor.
The market-based method uses contractual instruments (PPAs, GreenPower, LGCs) and residual mix factors to calculate emissions. If you hold a renewable PPA that delivers LGCs for your consumption, your market-based Scope 2 can be significantly lower than your location-based figure. Without instruments, you fall back to the residual mix.
Time-matched (or hourly) location-based Scope 2 goes further than an annual average. Instead of one grid-average factor for the year, it matches your half-hourly or hourly consumption against the actual carbon intensity of the grid at each interval. Consumption during a solar-dominated afternoon carries a lower emission factor than consumption during a coal-dominated evening.
This granularity is increasingly expected as assurance teams scrutinise ASRS-mandated disclosures, and it underpins 24/7 carbon-free reporting. It requires interval-level meter data (typically from your NEM12 retailer file) and a continuous feed of grid carbon intensity. It refines the location-based figure: on its own it does not make your reporting market-based.
The market-based figure only counts as low-emission if you can substantiate it. Under the GHG Protocol that means contractual instruments: retired energy attribute certificates (large-scale generation certificates, GreenPower or REGO), or the published intensity of a generator you hold a PPA with. gridIQ applies the instruments you have actually retired, then falls back to the residual mix for any consumption they do not cover.
If you hold no instruments and no PPA, the market-based figure is unsubstantiated, and gridIQ reports it as equal to your location-based figure rather than implying a reduction you cannot evidence. gridIQ reports both methods, with the location-based figure time-matched, so you can see the difference for your own load and an auditor can see what substantiates each number.
DCCEEW publishes updated emission factors each year and occasionally revises historical factors. For audit-defensible Scope 2, your calculations should reference the specific DCCEEW factor version used. If factors are revised, you need to know which version underpins your disclosure. Annual average factors are published for each NEM region and a separate factor applies to the WEM (Western Australia).
Australian Sustainability Reporting Standards (ASRS), based on ISSB S2, will require large organisations to disclose Scope 1 and Scope 2 emissions. ASRS mandates both location-based and market-based figures. Organisations reporting under ASRS will need defensible methodology, factor version traceability and an audit trail that an assurance provider can verify.
gridIQ runs dual-method Scope 2 against live AEMO carbon intensity with DCCEEW factor versioning. Drop your NEM12 retailer file and get interval-level Scope 2 in about thirty seconds. Pro includes the ASRS disclosure workflow and audit worksheet.
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