Net Zero Initiative - Guidance on Carbon Accounting for Renewable Electricity Purchases

The electricity sector plays a key role in the overall decarbonization of the energy sector and of many sectors that depend on it. Furthermore, companies are expected to demonstrate their ability to reduce the emissions associated with the electricity they use. Companies can purchase, consume, or finance renewable energy through various market mechanisms and contractual tools.

However, given that electricity grids are interconnected at the regional or national level, it is rare for these procurement contracts to reflect a physical connection between the producer and the consumer.

Under what conditions does an electricity procurement contract actually help decarbonize the electricity that an organization relies on?

The new guide from the Net Zero Initiative aims to clarify the NZI’s position on climate accounting rules for these situations, both under Pillar A (induced emissions) and Pillar B (avoided emissions) of the NZI framework. Its goal is to establish a more precise methodology for evaluating the actual climate impact of various procurement contracts. To mark this occasion, we hosted a webinar on September 26.