Proposed guidelines for U.S. Scope 2 GHG reduction claims with renewable energy certificates

In the United States and Canada, individual states and provinces control their consumer energy markets. Under the International Organization for Standardization (ISO) definitions the “market” for market-based GHG reporting is typically defined as the state or province that maintains regulatory control or the interconnected grid where consumption occurs. Under current guidance, many systems suggest the U.S. may be considered a single grid since it is a single country. However, consumers in different regions are physically unable to consume energy generated in some other regions. This paper argues that in the U.S. and Canada, the interconnected grid where consumption occurs could initially be considered the FERC grid, and optimally the localized eGRID defined by the U.S. EPA in the U.S. These definitions are important given the requirement in the Securities and Exchange Commission’s (SEC) proposed climate rule to disclose Renewable Energy Certificates (RECs) impact on carbon reporting. This paper outlines the justification for the proposed interpretation and serves as a public reference for market-based GHG market boundary definitions.