Hourly Matching Survives on Paper: What the GHG Protocol’s Two-Method Scope 2 Plan Means for Brazil

Why it matters: The market-based Scope 2 figure is the one that shows up in net-zero claims, because it lets a company subtract whatever emissions its renewable energy certificates and power purchase agreements cover. Hourly matching and deliverability would have forced those certificates to line up with the hour and the place where the electricity was actually used. Instead, GHG Protocol created a second, looser method and declined to say when it expires. That keeps the current certificate market alive for several more reporting cycles.

Brazil has more riding on this than most countries. Listed companies here are about to report Scope 2 under a standard that points straight back to GHG Protocol. And Brazil is a big issuer of International Renewable Energy Certificates (I-RECs), exactly the instrument the strict rules would squeeze.

What was decided, and what still has no date

ESG Today reported the update. Three things are settled. Method 1 carries the strict rules. Method 2 keeps the 2015 guidance in force. Companies will have to say which one they used. Everything else is open, and the open part is the story. The board’s text says Method 1 becomes mandatory after a “to-be-determined future date,” and only “if data that meets the quality criteria is available.” Nobody has written the date. Nobody has written the quality criteria either.

The next formal step is the Q2 2027 consultation, which will also take in Scope 1, Scope 3 and market instruments as part of the joint GHG Protocol-ISO corporate standard due in Q4 2028. Work backwards from that and the earliest a Brazilian company could face a binding hourly rule is after 2028. Realistically it is later, since a new standard usually comes with a transition period after publication.

The consultation numbers explain the retreat. GHG Protocol’s own summary says 82% of companies reported low or no support for hourly matching, and 71% said the same about deliverability. 87% worried hourly matching would push companies out of voluntary clean energy markets, and the same share, 87%, said narrower market boundaries would steer investment away from the grids where renewables cut the most carbon. Those figures came from the organization’s consultation summary, not from a trade association’s press release, which is why the board could not wave them off.

My read: the board did the only thing it could without losing the companies it needs. But an expiry date left blank is not a transition plan. It is a postponement.

Brazil already has hourly data. It does not have a settled market boundary

The two proposals land very differently here. Take hourly matching first. Brazil’s wholesale market is further along than most. The Câmara de Comercialização de Energia Elétrica (CCEE) settles the free market at an hourly price, and free-market consumers are metered at that resolution. The data burden that European and American companies keep citing is smaller for a factory already buying in the mercado livre. The generation mix helps too. Hydro and the wind farms of the Northeast produce at night, when solar does not, so a buyer who mixes sources can cover far more hours than one leaning on solar certificates alone.

Deliverability is the hard one.

Brazil’s Sistema Interligado Nacional (SIN) is one interconnected grid, but it is priced and operated in regional submarkets: North, Northeast, Southeast/Center-West and South. GHG Protocol’s text speaks of “the same electricity market” and never says what that means for a country built this way. If the boundary is the whole SIN, a São Paulo data center can keep claiming wind certificates from Bahia. If the boundary is the submarket, that claim dies.

The update resolves nothing on this point, and it is the single question Brazilian respondents should carry into the 2027 consultation. Anyone who waits for GHG Protocol to notice Brazil’s submarkets on its own will be waiting a long time.

There is also a domestic layer. The Programa Brasileiro GHG Protocol, run by FGV’s sustainability center, adopts the global methods, so its Public Emissions Registry will follow whatever Scope 2 rule the global body finalizes. For listed companies, CVM Resolution 193 makes IFRS S1 and S2 disclosure mandatory for fiscal years starting in 2026.

IFRS S2 requires the location-based Scope 2 figure, which in Brazil is calculated with the grid emission factor published by the Ministry of Science, Technology and Innovation (MCTI), and asks for information on contractual instruments on top. The location-based number is untouched by this decision. The market-based number, the one in most net-zero pledges, is the one at stake.

A note on what is missing. This article does not give the current volume of I-RECs issued in Brazil or the share of corporate electricity bought in the free market. Those figures are not in the source material, and they should come from CCEE and the local I-REC issuer, not from a guess.

What it means for Brazilian companies and renewable generators

For a Brazilian company reporting Scope 2 today, nothing changes in the next inventory. Method 2 stays valid. Annual I-REC matching with a national boundary stays accepted. The practical change is disclosure. Companies will have to name their method, and the auditors reviewing IFRS S2 reports will ask why Method 2 was chosen when Method 1 is the recommended guidance. A company that can already show hourly matched coverage for part of its load has an easy answer. One that cannot will be explaining itself every year until the rule changes.

Generators split into winners and losers. Hydro operators and Northeast wind producers can sell certificates that match nighttime consumption, and they would gain pricing power under Method 1. Solar-only sellers face a shrinking market for daytime output if buyers migrate to hourly claims. Multinationals that buy certificates centrally for their Brazilian subsidiaries are the group most exposed to a narrow deliverability boundary and, not by coincidence, the group most likely to cling to Method 2 for as long as it exists.

The decision for the next two years is not which certificates to buy. It is whether to invest in hourly metering and contract structures before the Q2 2027 consultation, so the company shows up with its own data instead of an objection. Objections already won this round. Data is what will decide the next one.

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