In 2015, the World Resources Institute (WRI) unveiled new guidance for Scope 2 emissions accounting within the Greenhouse Gas Protocol Corporate Standard. This update introduced a market-based accounting mechanism that gives companies the opportunity to reduce their Scope 2 emissions through the purchase of renewable energy certificates, PPAs, and other contractual instruments. This provision has driven a new focus on global energy purchasing, with more organizations looking for options across the globe.
The I-REC, an international renewable energy certificate, represents transferrable proof that one MWh of electricity was produced from renewable energy sources and added to an electrical grid. Purchasing an I-REC allows the buyer to claim consumption of one MWh of renewable energy. I-RECs can originate from wind, solar, ocean energy, biomass, hydropower, landfill gas, aerothermal, geothermal, and landfill gas projects. 3Degrees only transacts I-RECs issued in countries authorized by the International REC Standard and traded on the I-REC Registry. This standard establishes rules and regulations for a transparent system that simplifies claims and eliminates double counting issues, making products compliant with Scope 2 reporting guidelines. Valid renewable energy claims also depend on additional factors, such as whether production and consumption occur within an appropriate market boundary.
In some cases, the I-REC Secretariat implements country-specific restrictions on certificate issuance to ensure environmental integrity and prevent double counting. For example, issuance would be prohibited for generation that is counted toward a state-mandated renewable energy delivery quota. Every country’s regulatory environment is unique, and even though a policy may not lead to double counting, it may nonetheless change the scope of claims an I-REC purchaser can make. 3Degrees’ Regulatory Affairs team reviews each country in which I-REC issuance is authorized to comprehensively understand and communicate the integrity and impact of our clients’ I-REC purchases.
Interested in learning more about global renewable energy options? Read our blog on Navigating the Opportunities and Pitfalls of International Renewable Energy Markets or this case study on how Verisk is successfully addressing emissions from its global energy load.