Location-Based Method
The location-based method is a Scope 2 accounting approach that calculates emissions from purchased electricity using the average grid emission factor for the geographic location where the electricity is consumed. It reflects the physical carbon intensity of the local electricity grid.
What is Location-Based Method?
The location-based method is one of two approaches to calculating Scope 2 emissions, as defined by the GHG Protocol Scope 2 Guidance (2015). It uses average grid emission factors — reflecting the average carbon intensity of all electricity generation feeding into a particular grid — to calculate emissions from purchased electricity.
For UK organisations, the relevant factor is the DEFRA/DESNZ UK grid average electricity emission factor, which represents the average CO₂e intensity of all electricity generated and fed into the UK national grid in a given year. This factor has declined significantly over the past decade as coal has been phased out and renewable capacity (particularly offshore wind) has grown. In recent years, the UK grid factor has been approximately 0.20–0.21 kgCO₂e per kWh, down from over 0.50 kgCO₂e per kWh a decade earlier.
The location-based method makes no distinction between an organisation that buys a standard tariff and one that purchases a 100% renewable energy contract. Both report the same emission figure per kWh, because the method reflects the physical reality of the electricity delivered through the grid — not the contractual arrangements of the buyer. This means an organisation on a green tariff will still show Scope 2 emissions under the location-based approach.
SECR requires UK companies to use the location-based method for their mandatory Scope 2 reporting. The GHG Protocol, CDP, CSRD, and ISSB require dual reporting — both location-based and market-based figures — to give a complete picture. The location-based figure provides physical-reality transparency, while the market-based figure reflects the organisation's energy purchasing choices.
The location-based method is straightforward to apply: multiply total electricity consumed (kWh) by the grid average emission factor for the relevant country and year. For international operations, country-specific grid factors are available from the IEA or from local energy agencies.
Practical Examples
A UK office consuming 500,000 kWh of grid electricity uses the DEFRA location-based factor of 0.207 kgCO₂e/kWh to report Scope 2 emissions of 103.5 tCO₂e — regardless of the tariff or supplier.
A multinational applies the UK grid factor for its London office and the German grid factor (from IEA data) for its Berlin office, reflecting the different carbon intensities of each national grid.
A company on a 100% REGO-backed renewable electricity tariff reports 0 tCO₂e market-based but still reports 103.5 tCO₂e location-based for the same 500,000 kWh — illustrating the difference between the two methods.
How Climatise Helps
Climatise applies the correct location-based grid factors for every country where you consume electricity, using the latest DEFRA (UK) and IEA (international) data. The platform calculates both location-based and market-based Scope 2 automatically for dual reporting compliance.
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