Carbon Matching | Emissions First

What is Carbon Matching?

To drive investments to the right places, clean energy buyers need to measure what matters most: emissions. That means we need to modernize the accounting system to focus on the emissions impact of energy procurement.

Today, organizations report greenhouse gas emissions using the Greenhouse Gas Protocol (GHGP). For Scope 2 emissions - those from purchased electricity - the GHGP allows companies to use the market-based method (MBM) to report emissions by matching 1 megawatt-hour (MWh) of electricity load (Load) with 1 MWh of clean energy (RE) purchased within the same market. Any unmatched load is multiplied by the appropriate emission factor.

This approach is based on a fundamental assumption that all electricity in a given market over a given year has a uniform carbon intensity. However, advances in data availability reveal that this approach fails to reflect real-world variations in grid emissions throughout the day and across different regions.

“Carbon matching” (also called “emissions matching”) is an innovative new accounting methodology that measures the heart of what matters — the emissions. By using location-specific emissions factors, location-specific emissions factors, carbon matching more accurately reflects and measures real-world variations in grid emissions.

The proposed carbon matching approach calculates emissions by netting induced emissions from load and avoided emissions from clean energy investments:

Induced Emissions from Load: Multiply corporate load by the relevant Marginal Emission Rate (MER) for the specific time and location of consumption.

Avoided Emissions from Clean Energy Investments: Subtract the generator's emission rate from the relevant MER to the time and location, then multiply by generated energy

By capturing fluctuations in grid emissions based on time and location, carbon matching provides a more accurate measurement and deeper insights into the actual emissions induced by operations and displaced by clean energy purchases.

How Carbon Matching Drives Impact

The urgency of climate change demands that we prioritize clean energy investments that deliver the greatest possible decarbonization benefits to the grid.

Because the current GHGP accounting framework relies on market boundaries, companies are disincentivized to support clean energy procurement outside of the markets where they operate. This limits investment in regions where decarbonization may be most needed.Consequently, nearly $3 trillion USD in clean energy investments flow primarily to already developed markets, with 85% of those investments going to the US and Europe.

Carbon matching addresses this issue by directly measuring the real-world emissions impact of load and clean energy generation. This ensures that no matter where companies choose to procure, they are accurately measuring and reporting the impact of their actions. Moreover, by shining a light on the emissions impact, carbon matching enables organizations to evaluate and prioritize procurements that will drive the greatest possible decarbonization benefits to the grid.

Over the next 15 years, an emissions first approach could:

Avoid 1.7 billion tonnes of CO2 and;

Funnel $85 billion USD of investment into emerging economies

Adopting carbon matching and establishing flexibility in market boundary requirements would drive catalytic investments to economies that have not historically benefited from corporate investment in clean energy, while delivering the greatest possible decarbonization benefits to the grid.

In 2023, Salesforce committed to purchasing 280,000 MWh over the next eight years from small, distributed clean energy projects across Sub-Saharan Africa, Latin America and Southeast Asia. They prioritized sourcing projects in non-traditional markets, aiming to deliver both social and environmental benefits to local communities. These projects are expected to generate a significant emissions impact. Under the current system, there is no accountable emissions benefit for Salesforce’s action.

It’s important to note that carbon matching is an accounting approach, not a procurement strategy. It offers a uniform way to appropriately measure and value a range of procurement actions — whether a company chooses to prioritize investments in clean energy close to home or in the world's dirtiest grids. To drive energy investments where they have the greatest impact globally, our accounting system must appropriately measure and enable a broad suite of meaningful procurement actions.