New rules to align with
The “Actions and Market Instruments (AMI) Phase 1 White Paper,” published in March 2026 by the GHG Protocol, is the most significant reform proposal to date for corporate greenhouse gas accounting with direct implications for corporate operations. The standard has been released for public consultation and is expected to be applicable in corporate practice from 2027. From the perspective of our topic, its key message is that the concept of insetting finally appears in it, meaning the set of market interventions aimed at decarbonization along the corporate value chain.
Prepared in cooperation between ISO and GHG Protocol, the document aims to resolve the tension between physical inventory-based accounting and market-based decarbonization tools (e.g., certificates, carbon credits). The proposal outlines a hybrid model that preserves the physical integrity of inventory accounting while allowing space for market innovation and flexible decarbonization accross supply chains. At the same time, it imposes stronger transparency requirements on companies: they must separate actual engineering results from emission reductions based on financial transactions.
Insetting is also integrated into reporting
The new standard introduces a multi-statement framework. Its most important innovation is that it breaks with the practice of reporting a single, aggregated carbon footprint figure and instead proposes a structured, three-level reporting model.
In the direct inventory (Statement 1), direct physical emission reductions related to the company’s activities are included (including supply chain interventions affecting direct material inputs). In the market-based inventory (Statement 2), contractual instruments (e.g., guarantees of origin, green steel certificates) related to the company’s procurement can be reported. Finally, carbon credits and out-of-inventory projects are included under value chain–external and other impacts (Statement 3).
This separation prevents the “blending” of data, making it clear whether the company has actually reduced its physical emissions or relied on other instruments for compensation.
From this, it is evident that the standard treats insetting as an integral part of the system. The document places the concept of insetting on a scientific basis within the GHG Protocol. It states that insetting is not a separate “category,” but an accepted decarbonization technique within the standard. The results of such projects may appear in the direct inventory (if they constitute direct operations), in the market-based inventory (if they do not relate to direct material inputs), or even among other impacts (in the case of out-of-inventory projects).
The standard clarifies fundamental concepts
Another major innovation of the standard is that it defines the concept of intervention-based accounting. The draft introduces and defines intervention-based accounting, which is particularly important for value chain (Scope 3) emissions and thus also establishes the basis for accounting insetting projects. The document recognizes that companies often cannot obtain precise, direct data from every supplier. Therefore, it allows companies to account for the quantified results of specific insetting projects implemented in the supply chain in their direct inventory, provided that the intervention directly affects the category of materials used by the company.
Furthermore, the proposal finally clearly defines the validation criteria for market instruments. The document sets out a strict system of criteria for the acceptability of market-based certifications. For an external certificate (e.g., biomethane certificate, carbon credit) to be recognized, the following conditions must be met simultaneously. First, additionality must be demonstrated. Second, double counting must be excluded, ensuring that the same reduction cannot be reported in the same way by both the producer and the buyer. Finally, geographical and temporal correlation must be established, meaning that the market instrument must be linked in space and time to the actual material flow process.
The foundations of data quality are also defined
Finally, the draft standard ensures the quality of the data used and addresses uncertainty. To ensure credibility, the draft proposes the introduction of Data Quality Tiers. Companies must report what proportion of the total emissions and emission reductions presented in their reports is based on primary (measured) data and what proportion is based on secondary (estimated/averaged) data.
Furthermore, it introduces the “principle of conservatism”: if there is high uncertainty in measuring Scope 3 emissions, the company must report the worst-case scenario (i.e., the highest level of emissions) in order to avoid underestimating environmental impacts.
