Market-Based Accounting for Clean Fuels

Fuel producers and their customers concerned with managing the greenhouse gas (GHG) emissions from using fuels are pursuing ways to replace conventional fossil fuels with biologically derived and lower-emitting alternative fuels. To help spur investment in the production of these nascent fuels, these stakeholders are using markets for contractual instruments like certificates representing the environmental attributes of clean fuels. Current GHG accounting frameworks, however, do not include clear rules addressing how companies should use these instruments when calculating and reporting their emissions inventories.

This report presents consensus recommendations to help companies who purchase contractual instruments for clean fuels attribute GHG emissions within their reported emissions inventories. Recommendations adhere to principles of the GHG Protocol Corporate Standard, including those published in the Protocol’s Scope 2 Guidance. The report establishes a series of quality criteria for contractual instruments for any fuel type, no matter where or how the fuel is used. Applying the criteria in real conditions may entail future sector-specific or fuel-specific guidance.

Any organization that buys or sells contractual instruments for clean fuels and wants to account for their emissions under the GHG Protocol or a program based on the GHG Protocol’s Corporate Standard will value this report as interim guidance until the GHG Protocol and other official standard setters provide more definitive direction.