> For the complete documentation index, see [llms.txt](https://kb.bravegen.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://kb.bravegen.com/carbon/configuration/reporting-frameworks/ghg-protocol/market-and-location-based-reporting.md).

# Market & Location Based Reporting

The **Reporting Inclusion** setting on an Inventory Item Template controls which total(s) that item's calculated emissions count toward: **All**, **Market Based**, or **Location Based**.

### What it is

Under the GHG Protocol Scope 2 Guidance, organisations with purchased electricity, steam, heating, or cooling must report Scope 2 emissions two ways in parallel, not pick one:

* **Location-based** — uses the average emission intensity of the grid(s) the consumption physically occurs on (the most specific grid factor available — sub-national, then national, then regional).
* **Market-based** — uses emission factors derived from contractual instruments (RECs, Guarantees of Origin, PPAs, supplier-specific tariffs) that convey the specific attributes of the energy purchased. Any consumption not covered by an instrument falls back to the market's residual mix factor.

Both totals are required outputs whenever an organisation holds any relevant contractual instruments — this is mandatory dual reporting, not optional.

The same split isn't limited to Scope 2. It also applies to **Scope 3 items that derive from the same purchased energy data** — most notably Category 3 (fuel- and energy-related activities not included in Scope 1 or 2), which covers things like transmission and distribution losses and well-to-tank emissions on purchased electricity and fuel. Because these figures are calculated from the same underlying purchase, they carry the same location-based/market-based distinction and need the same dual-reporting treatment.

### What each option means in BraveGen Carbon

| Setting            | Use for                                                                                                                                                                                                                                     |
| ------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **All**            | The item's calculated emissions count toward the total with no market/location split. Use this for items where no location/market distinction applies — most Scope 1 items and most Scope 3 categories.                                     |
| **Location Based** | The item counts only toward the location-based total. Use on the Inventory Item calculating purchased energy (or a related Scope 3 item, e.g. Category 3 T\&D losses) against a grid-average emission factor.                               |
| **Market Based**   | The item counts only toward the market-based total. Use on the Inventory Item calculating the same purchased energy (or related Scope 3 item) against an instrument-specific factor (or the residual mix factor for uncovered consumption). |

### How to set it up

For a source that needs dual reporting — whether it's the Scope 2 purchased energy itself, or a related Scope 3 item such as Category 3 T\&D losses — create **two** [**inventory templates**](/carbon/core-concepts/inventory-items/inventory-templates.md), one for each side of the split:

1. A template using a grid-average emission factor, with Reporting Inclusion set to **Location Based**.
2. A template using an instrument-specific or residual-mix emission factor, with Reporting Inclusion set to **Market Based**.

Then build a single **Rule** that references both templates, and assign that Rule to the Activity Source at the Entity through the task review process. The Rule fans out into two linked Inventory Items on that one source — one governed by each template — so both totals are produced from the same underlying activity data without either one double-counting into the other.

### Caution

Only use **All** where there's no location/market split to make. Setting **All** on an item (Scope 2 or Scope 3) that also has a Location- or Market-based counterpart will pull that item's emissions into both totals, inflating one of them.