The market-based method is a way to account for Scope 2 emissions in the context of greenhouse gas (GHG) accounting. Scope 2 emissions are indirect emissions associated with the generation of purchased or consumed electricity, heat, steam, or cooling. This method allows organizations to calculate their emissions based on the emissions factors associated with the electricity they purchase from the grid, which can vary depending on the energy sources used by their utility provider.

In the market-based method, organizations use emission factors provided by their utility or energy supplier to calculate the carbon intensity of the electricity they consume. This method allows them to account for the environmental impact of the specific electricity they use, taking into consideration the energy mix and emissions associated with that electricity generation. It provides a more accurate representation of a company's carbon footprint compared to the location-based method, which uses average grid emissions factors.

kWh consumed x Contract source emissions factor = Market-based Scope 2 CO2e GHG Emissions