What is the difference between location-based and market-based Scope 2?

Location-based answers "what did the grid emit while I was drawing from it". Market-based answers "what did I choose to buy". They can differ enormously for the same building: a company on a fully renewable contract may report a location-based figure of hundreds of tonnes and a market-based figure near zero.

Both are legitimate, which is why the 2015 Scope 2 Guidance requires dual reporting rather than picking a winner. Reporting only the market-based number hides your actual physical draw on the grid; reporting only the location-based number hides that you paid for cleaner power.

If you have no renewable contract, no green tariff and no certificates — which is the case for most SMEs — your market-based figure uses a residual mix or, absent that, the same grid factor, and the two numbers are effectively the same. The requirement only bites once you buy something.