Market-Based vs. Location-Based Emissions: Why the Accounting Method Changes the Number by 13,900x

A 2024 Guardian analysis compared two accounting methods for big tech's data center emissions:

Meta, 2022: 273 tons CO2e officially reported (market-based) vs. 3.8M tons under location-based accounting.
Microsoft, 2022: 280,782 tons officially reported vs. 6.1M tons location-based.
The gap isn't fraud — it's a permitted accounting choice. Market-based figures let companies apply Renewable Energy Certificates (RECs) purchased from anywhere in the world against their footprint, regardless of what's actually drawn from the grid powering the facility. Location-based accounting reports what the local grid mix actually emitted.

Both are technically valid under GHG Protocol rules. Only one tells you what's actually happening at the socket.

That's the metric CarbonLayer tracks — location-based, per inference call, no offset applied. If you're building or auditing AI infrastructure, the number you should be asking for isn't "carbon neutral." It's "location-based scope 2, unadjusted."

Source: The Guardian, Sep 2024
https://www.theguardian.com/technology/2024/sep/15/data-center-gas-emissions-tech