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Things to know before buying IRECs
Learn how to use IRECs or EACs to reduce your electricity consumption (scope 2) footprint. Everything you need to know before buying IRECs.
Learn how to use IRECs or EACs to reduce your electricity consumption (scope 2) footprint. Everything you need to know before buying IRECs.
Within the carbon footprint of corporations there are different scopes, as we deep dived in this article. One of the most relevant direct sources of carbon emissions for companies, especially within the services sector, is generated by the usage of electricity, typified as scope 2.
The usage of electricity is in direct control of corporations, and should be optimized through energy efficient (and cost-saving) measures, reducing their emissions. Another way of reducing carbon emissions derived from electricity usage is by using renewable energy. This is something that is not always easy for companies to do, because it is impossible to install their own renewable energy sources, or because electricity suppliers can’t guarantee power supply is coming entirely from renewable sources. Here’s where Energy Attribute Certificates in any of their variants (RECs, iRECs or Guarantees of Origin) come into play.
When we refer to iRECs, we mean a specific type of an Energy Attribute Certificate (EAC). An EAC is a document that certifies the environmental attributes of energy consumption. Each one certifies that 1 MWh of renewable energy was produced and fed into the electricity grid. A customer buying an EAC can therefore certify that 1 MWh of the electricity consumed was produced by a renewable energy source.
There are different types of EACs, depending on the location of the renewable energy and the standards that are followed. In the European Union they are called Guarantees of Origin, in the US and Canada they are called REC (Renewable Energy Certificates) and in many other countries i-REC (international Renewable Energy Certificate).
Companies can buy iRECs to reduce the footprint of their scope 2 generated emissions. Buying EACs equivalent to the electricity consumption of a company’s facility will ensure that such a facility was powered using renewable energy sources. Full guidance on how to track and report scope 2 emissions can be found here.
Using EACs to reduce scope 2 emissions has several benefits, like for example tackling the source of emissions of the company, the energy generation, being a reduction activity instead of a compensation one, and fostering transition to a more cleaner energy generation. But the companies also have other benefits, being a more specific product they are a cheaper way to reduce carbon emissions than compensating them later on, and allow to tackle reduction activities in scope 2 without entering into self generation of electricity or direct contracts with electricity providers (PPA or Power Purchase Agreements) which are many times not available or only available for big consumers.
There is something that has to be taken into account when purchasing EACs. Because the customer would be buying the environmental attribute of electricity fed into a power grid, the consumption of electricity done by that customer has to happen in the same power grid.
So for example, if there is a company that has an office in Sao Paulo, Brasil, and another office in Madrid, Spain. That company can buy i-RECs generated in Brazil (or connected power grid) to reduce scope 2 emissions of Sao Paulo’s office, and can buy guarantees of origin generated in the European Union (EU power grid is inter-connected) to reduce scope 2 emissions of the office located in Madrid. The company could not buy Brazil iRECs to reduce scope 2 emissions for both offices.
You can easily buy EACs or more specifically iRECs in our marketplace. Simply go to ClimateTrade’s marketplace, find projects of EAC kind or use the filters to display them. Select the project that meets your needs in terms of power grid and sustainability strategy or principles, select the amount of MWh that you want to purchase (usually your yearly energy consumption) and complete the purchase. At the moment of purchase you’ll receive a certificate that you can use on your ESG reporting to certify the renewable source of your energy consumption.
If you need EACs from any specific location that are not listed in our marketplace for online purchases, contact us specifying your needs, we are more than happy to source any specific needs for you.
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