Email feedback on importance of a consequential framework

Dear SBTi team,

Thank you for acknowledging the limitations of the consultation survey and for offering an opportunity to provide additional input via email.

We appreciate the openness to continued engagement and would like to submit the following feedback on three specific items that we believe are important to consider as part of the CNZS development process. These points were not fully accommodated by the structure of the survey questions, but we see them as directly relevant to the alignment of the proposed guidance:

1. Criterion C14.2. Target-setting approach - LCE targets - Given that Location-based and Market-based targets are no longer mandatory and a new LCE target is introduced, this is a missed opportunity to place a consequential impact metric on equal footing with  an LCE target. A consequential metric would be more appropriate to evaluate and track the actual emissions impact of zero-carbon electricity procurement. For example, prioritizing projects based on the fossil-fueled generation they displace would offer a more scientifically grounded and climate effective approach than simply matching MWh across time and geography. If the intent is to track progress toward emissions reduction targets, then companies should be measuring emissions, not megawatt-hours. Such a metric would more directly support emissions-reducing actions, including efficiency, where they matter most. 

   
   

2. We ask that SBTi reconsiders advancing specific positions, particularly those related to 24/7 hourly matching, ahead of finalized accounting guidance from the Greenhouse Gas Protocol. Targets are intended to be set against an agreed accounting framework, not used to implicitly define one. By quoting and embedding 24/7 matching concepts directly into target-setting guidance while Scope 2 accounting rules remain unresolved, SBTi risks pre-empting the outcome of the GHGP process and creating misalignment between how emissions are accounted for and how targets are evaluated. This creates uncertainty for companies, undermines consistency and assurance, and may require subsequent revision once accounting guidance is finalized. We urge SBTi to wait for the completion of GHGP Scope 2 revisions before including 24/7 hourly matching expectations into target-setting guidance so that it remains interoperable with the underlying accounting standards.

   
   

3. Section 3.3 Scope 2 targets - Box 2: Ongoing revisions to the Greenhouse Gas Protocol and their impact on scope 2 targets in CNZS V2.0 - This box claims “provisions on physical deliverability, hourly matching, and commissioning / re-powering date limit are informed by research demonstrating their increased impact on grid decarbonization when compared to current practices.” No expert consensus has been established that this is the case. We encourage SBTi to consider the substantial body of research that reaches different conclusions, and to take the following articles, studies, and expert input into account as it evaluates this issue:

   1. An open letter to corporate sustainability practitioners, carbon accounting bodies and policy makers shows that expert opinions on 24x7 hourly matching vary considerably

   2. Scope 2: Physical power usage accounting is fictional, pricing and marginal impact accounting are real This expert note addresses the failure of the current GHP Scope 2 revision proposal to meet its own Scientific Integrity criteria, as the accounting ignores the special problems that arise due to the physics underlying power flows.

   3. Expert Testimony of Dr. Kathleen Spees and Dr. Long Lam In the Matter of an Investigation into Implementing Changes to the Renewable Energy Standard and the Newly Created Carbon Free Standard under Minnesota Statute. 

   4. Caught in the Middle - How hourly matching reduces impact for distributed loads - shows that market boundaries silo load, leaving over 40% of companies caught in the middle between the 10 GWh exemption and the regional load needed to sign a PPA.

   5. Corporate Demand Drives Clean Energy - Highlights the importance that VPPAs and RECs have in creating revenue stability that get renewable energy projects built. Under strict time and location matching requirements, corporate buyers will move towards unbundled RECs that are 60% less effective at building clean energy.

   6. Optics over impact - Hourly matching risks more greenwashing - Highlights how 24/7 hourly matching sends the wrong investment signal for corporate renewable energy buyers as it "rewards" hourly matched load without regard for the impact on emissions that renewable energy procurement can have. It also discusses how a “carbon matching” approach in contrast, incentivises building new renewables in the dirtiest grids, rather than hoarding existing clean energy or building in clean grids.

   7. Evaluating the Impacts, Costs, and Consequences of Proposed Scope 2 GHG Emissions Reporting Standards -  This study finds that below an hourly matching level of 90%, hourly matching does not reduce as many emissions as are caused by demand and that hourly matching above 90% comes at a significant cost premium of 2–4 times more than annual volume matching. It also finds that for a wide range of demand elasticity, hourly matching could lead to a significant decrease in participation, driven by higher costs, leading to a net increase in total emissions relative to existing standards. 

   8. Cost and emissions impact of voluntary clean energy procurement strategies - Finds that hourly matching is the least cost effective strategy at carbon emissions reduction. These results also suggest that targeting clean energy investment in regions where current renewable energy penetration is low and marginal emissions rates are high is the most effective way for individual actors to reduce Scope 2 carbon emissions and reach carbon neutrality.  

   9. Review of Research on the Impact of Voluntary Energy Procurement - Summarizes available research on energy procurement strategies along with their cost implications and impact on emissions. Importantly, it highlights how hourly matching can indeed result in higher emissions reductions, but only at high levels of matching (>90%). It also highlights that at high levels of hourly 24/7 matching, companies will need to procure a higher volume of energy than they consume in order to meet demand at hours when CFE has low availability, sometimes in excess of 200% of their load. This can significantly increase costs and at the high level requirements of hourly matching to be meaningful, it may not be economically viable.

Thank you again for your time and consideration.

Respectfully,

The Emissions First Partnership