For companies aiming to reduce their electricity-related emissions, Renewable Energy Certificates (RECs) offer a simple, credible way to account for renewable energy consumption. However, not all RECs are created equal. Making the right procurement choices ensures that your purchase is both credible and strategically aligned with your sustainability goals.
This article outlines the key factors every organization should evaluate before buying RECs.
Geographic Relevance
Under the Greenhouse Gas Protocol’s market-based method, RECs must originate from the same market boundary where electricity is consumed.
For RE100 and SBTi alignment, this requirement becomes even clearer:
- Certificates must be sourced from renewable energy projects operating in the same country as the electricity consumption.
- Cross-border purchases are generally not acceptable unless grids are formally interconnected and recognized as a single market.
Why this matters:
- It ensures renewable claims reflect actual grid decarbonization.
- It aligns climate claims with local energy transition efforts.
For multinational organizations, this often requires a multi-country REC portfolio strategy rather than centralized global procurement.
Vintage
Timing is a critical but often overlooked factor.
The period when the renewable energy was generated (“vintage” of the RECs) must be ‘reasonably close’ to the period when the user consumed the electricity (“consumption period”):Leading frameworks require temporal alignment between:
- The electricity consumption period
- The renewable generation period
For example:
- If reporting electricity use for 2025, RECs must typically come from a generation period reasonably close to that year (often within 12–18 months).
Technology Type
RECs can represent solar, wind, hydro, or biomass generation.
While all qualify technically, stakeholder perception differs:
- Solar and wind are often seen as high-growth, future-oriented technologies.
- Small and large hydro projects are often more budget-efficient in most markets.
Companies could align technology selection with:
- ESG narrative
- Industry positioning
- Clients’ requirements
No Double Counting
To be valid, a REC must represent all environmental attributes of one MWh of renewable electricity.
This means:
- The certificate must be uniquely issued and serialized.
- It must be retired after purchase.
- The environmental attributes cannot be separately sold as carbon credits.
If a project sells carbon offsets from the same MWh in addition to issuing RECs, this creates double claiming risks.
Robust tracking systems — such as regional registries or international frameworks like the I-TRACK Standard — are essential to ensure transparency and exclusivity.
Without proper retirement documentation, companies cannot credibly claim renewable electricity usage.
Plant Age Requirements: 15-Year Commissioning Rule
Under RE100 technical criteria, there is an additional structural requirement tied to market transformation.
Only a limited portion of renewable electricity consumption (typically up to 15%) may be matched using RECs from power plants older than 15 years.
The remaining majority must come from renewable facilities commissioned within the last 15 years.
Why this exists:
- It encourages support for newer renewable infrastructure.
- It ensures corporate demand contributes to market growth rather than relying on legacy hydropower assets.
- It enhances the transformational impact of corporate procurement.
For companies aiming to demonstrate climate leadership, plant commissioning date should be part of procurement due diligence.
Budget, Volume, and Contract Terms
- Understand the price per MWh, contract duration, and volume flexibility.
- Voluntary RECs often fluctuate in price depending on region, technology, and market liquidity.
- Align procurement strategy with your sustainability reporting deadlines and operational needs.
Key Takeaways
To be eligible for recognition under RE100 or SBTi-aligned targets, RECs must:
- Be sourced from the same country as electricity consumption
- Be temporally aligned with the reporting period
- Avoid any double counting of environmental attributes
- Largely originate from projects commissioned within the past 15 years
Beyond eligibility, companies can also evaluate technology type and market pricing and contract structure.
How Monsoon Carbon Can Help
Navigating the REC market can be complex, especially for global companies with multiple sites and diverse supply chains. Monsoon Carbon brings our expertise supporting you to successfully procure RECs across your operations and supply chain, enabling you to reduce emissions and achieve sustainability targets.
Contact us today to design a REC procurement strategy that aligns with your sustainability goals and strengthens your climate credibility.
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