Many companies advertise that their products reflect “100% renewable electricity”. Companies do this to enhance their brand image and communicate their commitment to sustainability to customers (1). However, the electricity embedded in the product does not consist of 100% transmitted renewable energy.

Once renewable energy generators feed power to the grid, it is mixed with other non-renewable sources of energy generation, such as coal, oil, and natural gas (2). Except for the case of physical Power Purchase Agreements (PPAs), customers thus cannot distinguish the type of energy they consume.

What effectively makes their electricity ‘green’ in the eyes of customers and regulators are Energy Attribute Certificates (EACs). As outlined in the first article of this series, EACs are tradable instruments issued to renewable energy generators and represent the environmental attributes associated with renewable energy generation. Effectively, an EAC proves the production of 1MWh of renewable energy (3).

In general, there are three significant EAC standards (and markets). Figure 1 illustrates these markets. Europe uses the so-called “Guarantees of Origin” (GoO or GO) system, whereas, in the US and Canada, energy attribute certificates are commonly known as “Renewable Energy Certificates” (RECs); in most other countries, “International Renewable Energy Certificates” (I-RECs) is the requisite term for EACs. Going forward, we will refer to EACs when generalizing our statements for the entire voluntary market. When talking about one market specifically (such as Europe or the US), we will refer to GOs and RECs, respectively.

Even though EACs are fairly undebated and thus often outside the public eye, they provide a crucial backbone for the energy transition as a market-based instrument (MBI). On the one hand, EACs channel financing to renewable energy generators, aiming to bring more renewable energy online. Furthermore, they offer companies purchasing them an opportunity to substantiate sustainability claims and meet corporate sustainability standards (5).

Over the following few paragraphs, we will examine the different procurement options customers usually have when looking to buy ‘green’ electricity. Furthermore, we will critically analyze the true potential of EACs to bring more renewable energy online and dive deeper into the issue of corporate greenwashing. Lastly, this article will dive deeper into developments that have the potential to mitigate the current shortcomings of EACs, such as the emergence of time-based EACs (T-EACs) and increasing productization of EACs.

Green electricity procurement: navigating a multitude of options

As outlined in the introduction, EACs present a crucial MBI for proving renewable electricity consumption. However, the variety of procurement channels for EACs makes the market opaque and complex. For customers – companies and private households alike – it can be helpful to develop an enhanced understanding of the different procurement channels of EACs, to make better-informed decisions on electricity procurement.

Figure 2 visualizes the different procurement options for RECs in the United States. By and large, there are two essential dimensions to REC procurement methods (that are also transferable to GOs and I-RECs).

Bundled vs. unbundled RECs: For one, customers can differentiate between unbundled or bundled RECs. Whereas with unbundled RECs, customers purchase solely the claim associated with the renewable energy usage, bundled RECs embed this claim in the customer’s electricity procurement (6). Furthermore, it clusters them into bundled and unbundled options.

Project-specific procurement options vs. retail procurement options: typically, retail procurement options consist of highly standardized products in terms of price, resource mix (i.e., multiple projects), and third-party certification status (7). They are sold directly to customers through utility companies, pure-play electricity suppliers, or REC marketplaces. Customers typically dictate the frequency and volume of this type of procurement; contrastingly, project-specific procurement options require more long-term commitments (7). Furthermore, procurement volumes are usually tied to a predetermined generation capacity of a single project.

When looking at REC sales data – as displayed in figure 3 – it becomes evident that two trends are currently observable in green electricity procurement: Power Purchase Agreements and Unbundled RECs are on the rise, accounting for over 71% of total sales combined.

Retail procurement options: exploring their success and problematic features

The most simple and prevalent way companies claim “green” electricity is through unbundled retail procurement. In 2020, sales of unbundled RECs accounted for 44% of total sales in the US, as seen in figure 3.

Unbundled EACs are intriguing due to their simplicity and flexibility. They are typically sold through designated EAC marketplaces. Companies can simply procure a highly flexible amount of unbundled EACs in addition to their existing electricity contract to reduce their energy-related scope 2 emissions by whatever percentage they choose (9). Thus, it is often viewed as an entry point to the green power market. However, using retail procurement options – particularly unbundled EACs – is inherently problematic in two ways: first, it allows companies to increase their scope 2 emissions reductions easily. Secondly, it often fails the purpose of bringing new renewable energy capacity online.

1. Corporate greenwashing of scope 2 GHG emissions:

A recent study published in the Nature Climate Change journal revealed the extent to which companies distort scope 2 emissions through the use of unbundled EACs. The analysis revolves around a sample of 115 companies that a) have SBTi-aligned emissions reduction targets and b) specifically disclose data that allows for an assessment of EACs’contribution to those targets (10). The results suggest that companies reported a combined 30.7% reduction in scope 2 emissions, including MBIs (i.e., Unbundled EACs, PPAs, etc.). However, without the contribution of unbundled EACs, reported electricity-related emissions drop to 9.9%. First and foremost, this is an issue of accounting standards and reporting. The Science-Based Target initiative is currently working together with the Greenhouse Gas Protocol to align on usage standards of EACs (9). Secondly (and rightfully so), many companies currently relying on EACs would have to re-align their sustainability efforts. Of 75% of companies that are on a 1.5-degree pathway, including EACs, only 37% are still on that pathway without their use (10).

2. Missing additionality of legacy renewable energy projects:

Furthermore, the issue of ‘additionality’, which we previously discussed in the context of carbon credits, also applies to EACs. Companies can purchase cheap EACs from unbundled or other retail procurement options at a mere 1-2% premium to their electricity tariff to satisfy their clean energy claims (11).

This is – in large part – a consequence of the market design of EACs. Similar to how a protected rainforest can generate carbon credits for years, many legacy hydro-power projects continuously produce EACs. For example, Norway, Europe’s single-largest exporter of Guarantees of Origin, generates 98% of its provided supply through hydro-power (12). Considering that most hydro-power plants in Europe and North America are – on average – between 45 and 50 years old, the continuous supply of EACs (RECs and GOs) has kept prices low (13, 14).

The degree to which this is problematic depends on the intended purpose of EACs. If the goal is to simply signal to customers that products embed a certain amount of renewable electricity, missing additionality is a minor problem. If, on the other hand, the intended purpose of EACs is to provide a significant financial incentive for project developers to bring more renewables online, the issue of additionality fails the purpose. This is where project-specific procurement options (i.e., PPAs & community solar) come into play. In contrast to retail procurement options, they often-times satisfy additionality, as the renewable energy project would not have happened in the absence of the PPA or community solar initiative (10).

Increasing pursuit of project-specific procurement options brings new capacity online

Coming back to figure 3, US REC sales through project-specific procurement options (i.e., different types of PPAs) have skyrocketed over the past decade, next to unbundled RECs. As introduced in the previous section, procuring PPAs can be a valid way to ensure the additionality of the RECs used in GHG accounting. Whereas in 2010, 4% of total REC sales originated from PPAs, that share increased to 26% in 2020. By and large, this development is driven by record-high corporate PPA volumes. Crucially, this trend is only to accelerate further: in 2021, the renewable energy industry saw repeated record numbers of PPA volumes. In the US, 17 GW of corporate PPAs were announced in 2021, compared to 8.7 GW in Europe (16).

Large technology firms looking to procure green electricity, particularly Amazon, Microsoft, and Meta, drive this substantial growth. At the end of 2021, they had amassed a combined global renewable energy portfolio of 30.8 GW (16). To put this number into context, let’s look at it this way: Amazon’s renewable energy portfolio (13.9 GW) is the 12th largest portfolio globally, ahead of the French utility EDF (16). For 2022, the industry is poised to set yet another record, with the first publications indicating 20 GW of new corporate PPAs in the calendar year (15).

Again, it is important to understand that in the context of PPAs, the transfer of EACs is the crucial element behind the claim of going ‘green’. Despite being a viable method to ensure additionality, procuring PPAs isn’t a “one-size-fits-all” solution. Small and mid-sized enterprises (SMEs) typically do not have the financial or operational resources as well as consumption patterns for PPAs to be a feasible procurement option for green electricity (18). Promisingly, early-stage companies such as the Danish start-up Reel are starting to enable PPA procurement for SMEs through reduced complexity-reducing technology.

Time-based certification as the key to unlocking increased efficiency

For now, the PPA market remains predominantly inaccessible for small- and mid-sized businesses. Thus, companies thinking about renewable energy procurement should also consider or pursue different options. Google exemplifies that. Once the leading off-taker of corporate PPAs globally, Google has since shifted away from entering additional PPA offtake agreements and implemented different innovative procurement strategies (16, 17). In particular, Google is piloting a concept known as time-based energy attribute certificates (T-EACs) (17).

Usually, EACs are produced on a monthly and procured on a yearly basis (17,19). In contrast, T-EACs also certify when the electricity was produced (down to the hour) and thus offer the possibility to verify and match the generation and consumption of clean electricity 24/7. As a consequence, hourly certificates better reflect the time value of generation and consumption of renewable energy in specific periods (19). This is important from an economic and environmental perspective:

Firstly, trading of T-EACs improves the economic efficiency of 24/7 green electricity, especially for small firms that lack access to other procurement options such as PPAs. That is because a 24/7 T-EAC market would effectively allow larger companies also to sell surplus certificates received in combination with PPA contracts to smaller companies (20). Think of it as a flexible cap-and-trade system where the cap is constituted by the overall generating capacity of renewables.

Secondly, T-EACs better reflect the ‘carbon impact’ of renewable energy generation and consumption. Essentially, if a company buys EACs at the end of a year, the claim it makes does not accurately reflect its relative impact in replacing fossil fuels (17). Consider this thought experiment: Solar energy typically makes for a higher share of the total electricity mix in summer. If a generator thus feeds 1MWh of electricity to the grid in August, its total contribution to replacing fossil fuels remains the same as if it did so in April (i.e., 1MWh). However, in April, there might be less green electricity in the total electricity mix, which leads to a higher relative impact of feeding green electricity to the grid. T-EACs thus reward generators to feed in green electricity at times when its relative impact is higher from a carbon perspective. Consequently, the price of a T-EAC that companies have to pay more accurately reflects the certificate’s environmental value. Looking forward, the rollout of T-EACs will be particularly vital to facilitate the tracking of electricity embedded in products such as hydrogen, where the embedded electricity content is highly important (19).

What’s ahead for voluntary market-based instruments?

Despite certain shortcomings, EACs currently are the only viable and properly functioning instrument to validify green electricity production and usage. The issues outlined throughout this text – from corporate greenwashing to additionality – might ring a bell since they are the same problematic features we previously discussed in the context of voluntary carbon markets. From our perspective, two overarching trends have the potential to alleviate these issues lastingly:

  • Improving demand-side integrity to tackle the issue of greenwashing: To reflect better the true impact of the certificate in question, a crucial lever is to develop and implement accounting and reporting standards and tools. First and foremost, this will be a question of whether or not private-sector initiatives such as SBTi, CDP, and the GHG Protocol will continuously set comprehensive overarching guidelines that prevent companies from overstating their environmental impact. In addition, companies need to be equipped with accounting and reporting software to deal with the increasing complexity of different certificate options.
  • Accelerating the rollout of high-quality MBIs to provide sufficient supply: To cope with the rising demand for higher-quality instruments, project developers have to be enabled to provide sufficient supply. Throughout this series of articles, we have outlined multiple solutions that have the potential to do so. Firstly, this can be achieved by leveraging aggregated demand to create new supply consequently. In the CDR space, that’s the case for upfront financing for nature-based and technological CDR projects. In the EAC market, aggregation of electricity demand to build new solar parks is an equally promising development.  Secondly, increasing investment into scalable nature-based and technological CDR methods is imperative to reduce overall costs and ensure CDR becomes competitive with lower-quality credits. Thirdly, coping with the underlying challenges of T-EACs (such as data storage limitations and complementarity with EACs) enables a more cost-efficient solution for green electricity procurement.

In our opinion, the future success of market-based instruments – both EACs and carbon credits – will largely depend on the capability to tackle these issues. Recent developments, such as the widely-discussed article on REDD+ carbon offsets published in the Guardian and Die Zeit, have underlined the extent to which their credibility is vulnerable. Eventually, there’s an imperative need to do so because, bottom line, enhancing the credibility of both instruments will be key to one thing: driving decarbonization to limit global warming to the best extent possible.

Read our latest to articles about Carbon Capture:

1. Carbon Credits and Energy Attribute Certificates: Essential Tools for a Net Zero Future
2. Advancing the Integrity of Voluntary Carbon Markets and the Use of High-Quality Carbon Credits
3. Scaling Carbon Dioxide Removal: An Imperative to Ensure Sufficient Supply of Carbon Credits


  1. National Renewable Energy Laboratory (2012). Made with Renewable Energy: How and Why Companies are Labeling Consumer Products. Link to source.
  2. RWE (2023). Power Purchase Agreements. Link to source.
  3. Cyril Bricaud (2023). What is an Energy Attribute Certificate? Ecohz. Link to source.
  4. RECS (2023). EAC World MapLink to source.
  5. Jacob Rante (2023). Renewable Energy Certificates. Ecohz. Link to source.
  6. US Environmental Protection Agency (2022). Green Power Product Options. Guide to Purchasing Green Power. Link to source.
  7. US Environmental Protection Agency (2022). Green Power Supply OptionsLink to source.
  8. NREL (2021). Voluntary Green Power ProcurementLink to source.
  9. Eric Roston & Ben Elgin. Flawed Renewable Energy Credits Are Derailing Climate Efforts. Bloomberg Green. Link to source.
  10. Anders Bjørn, Shannon M. Lloyd, Matthew Brander & H. Damon Matthews (2022). Renewable energy certificates threaten the integrity of corporate science-based targets. Nature Climate Change. Link to source.
  11. Gautam Naik (2021). Problematic corporate purchases of clean energy credits threaten net zero goals. S&P Global. Link to source.
  12. Oslo Economics (2017). Analysis of the trade in Guarantees of OriginLink to source.
  13. Nicholas Baldwin & Vittoria Morini (2022). European renewable certificates at all-time high amid hydropower shortageLink to source.
  14. IEA (2022). Hydropower Special Market Report. Executive SummaryLink to source.
  15. Richard Kessler (2023): Corporate US clean energy procurement surges to record in 2022 as solar outpaces wind. Recharge News. Link to source.
  16. Bloomberg NEF (2022). Corporate Clean Energy Buying Tops 30GW Mark in Record YearLink to source.
  17. Maud Texier (2021). A timely new approach to certifying clean energy. Google Cloud. Link to source.
  18. Schneider Electric (2023). How Aggregated PPAs Create Clean Energy Options for SMEsLink to source.
  19. IEA (2022). Advancing Decarbonisation Through Clean Energy ProcurementLink to source.
  20. Qingyu Xu & Jesse Jenkins (2022). Electricity System and Market Impacts of Time-based Attribute Trading and 24/7 Carbon-free Electricity Procurement. Princeton ZERO Lab. Link to source.