In an era where sustainability is paramount & stakeholders demand increasing accountability towards ESG goals, International Renewable Energy Certificates (I-RECs) have emerged as a powerful tool in helping companies around the world switch to renewable energy.

These certificates enable individuals and businesses to invest in renewable energy, reduce their Scope 2 emissions, and contribute to a greener future. In this blog post, we will explore the basics of buying and selling I-RECs to help you navigate the maze of often confusing & similar appearing options available to meet environmental and sustainability goals within your organization.

Buying I-RECs: The Steps

1. Identify Your Goals and Target Region

Determine your renewable energy goals. Are you looking to offset your Scope 1, Scope 2, and Scope 3 carbon emissions, meet sustainability targets, or simply supporting clean energy initiatives such as transitioning to wind, hydro, or solar power and many others? Clarifying your objectives will guide your purchasing decisions. Most companies look for I-RECs in the regions they operate to offset their Scope 2 emissions. As of 2023, I-RECs issuers are represented in 59 countries and this number keeps growing. Moreover, controlling greenhouse gas emissions and embracing Corporate Social Responsibility (CSR) continue to be the primary motivators for companies to join RE100 and transition to renewable electricity. 

2. Find a Supplier

Locate a reputable I-REC supplier or a broker. These entities facilitate the purchase of I-RECs by connecting buyers with certified renewable energy projects around the world. Brokers serve as intermediaries who connect buyers and sellers in the I-REC market, providing market expertise and facilitating transactions for a fee. Suppliers, on the other hand, are either the renewable energy project owners or their representatives like Coral Future who bring I-RECs to the market by working closely with the project owners and the I-REC registration and issuing bodies.  The choice between using a broker or dealing directly with a supplier depends on factors such as the buyer’s familiarity with the market, the complexity of the transaction, and cost considerations.  In our experience, most of the buyers prefer to deal via a broker or a supplier like us. 

Once the buyer has shortlisted a few suppliers, they should be provided with renewable energy goals which are in the form of an amount of renewable energy in MWh, the year for which I-RECs are sourced, preference of technology such as Solar, Wind, Hydro, etc. and country or region of origin.  At this stage, it is important to share as much information as possible to get comprehensive options to choose from.

Companies that are members of the RE100 also must adhere to the Market boundary criteria when making I-REC purchase decisions. This criterion states that renewable electricity shall be purchased from the same market where the company’s operations are based. RE100 defines the market boundary for most of the countries as their geographical boundary, except the following:

• North America: USA + Canada to be a single market for renewable electricity sourcing and reporting. 
• Europe: European Single Market as the countries of the European Union (EU-28) and European Economic Area (EAA), except Iceland. 

So for example, if a company has a factory in Vietnam and is looking to buy I-RECs then it must buy I-RECs from renewable energy projects which are located in Vietnam.  There are some exceptions to this when there may not be enough supply available in a country such as Singapore.  In such cases, companies can buy from neighboring countries that are grid-connected.

Another crucial aspect to consider is adhering to the 15-year commissioning date criterion outlined by RE100. The new update to technical criteria now requires the purchasing of renewable electricity to observe a 15-year commissioning or re-powering date limit. RE100 has made this change to directly increase its members’ demand for new renewable electricity capacity, and to signal to any company using the RE100 technical criteria that supporting new projects is central to the energy transition. 

3. Purchase I-RECs

Once you’ve selected a supplier, proceed to purchase the desired quantity of I-RECs. This typically involves entering into a sales agreement with the seller which may be for a single purchase or for multiple purchases over a number of years.  The standard agreement template is provided by the I-REC standard which can be used to keep the transaction efficient.

4. Retirement of I-RECs

Depending on your goals, you can choose to retire the certificates, effectively canceling out the associated carbon emissions, or use them to meet renewable energy targets and report your green energy usage. When you buy and “retire” I-RECs, you acquire their environmental characteristics and effectively utilize the I-REC, removing it from circulation, which renders it ineligible for further sale. Purchasing and retiring is a necessary step to assert that you have harnessed the related Megawatt-hours (MWh) of renewable energy.

5. Support with certification

In the pursuit of sustainability targets, an additional crucial step involves the project owner identifying a service provider, such as Coral Future, to assist in the certification process of a renewable energy station. This step is instrumental in ensuring that the project aligns with established standards. By partnering with a knowledgeable service provider, the project owner can navigate the complexities of certification processes more effectively, ensuring compliance with environmental standards and enhancing the overall credibility of the renewable energy initiative. 

Selling I-RECs: The Steps

1. Certify Your Energy Source

If you’re a renewable energy generator, ensure that your facility meets the necessary sustainability standards such as GRI, SBTi, ISSB, and others. Certification is essential for selling I-RECs.

2. Register with the I-REC standard

Join an I-REC registry that facilitates the creation, tracking, and trading of I-RECs, ensuring transparency and accountability. I-REC standard has provided the fee structure for registering projects:

• One-time trade account opening fee: EUR 500.00
• Annual trade account fee EUR 2,000.00
• Redemption fee (per MWh) EUR 0.06

3. Generate I-RECs

As your renewable energy facility generates electricity, I-RECs are created in proportion to the amount of renewable energy produced. These certificates represent the green attributes of your energy. It is important to keep track of Residual Mix Deadlines, which are twice a year for the previous vintage. In the context of I-RECs (International Renewable Energy Certificates), “vintage” refers to the specific time period or year in which renewable energy is generated and certified. Each I-REC certificate is associated with a particular vintage, indicating when the corresponding renewable energy was produced.

At the moment, the I-RECs standard has introduced a 15-year commissioning or re-powering date limit. This is introduced to enable new projects to enter the market arena. The initial Residual Mix Deadline (RMD) signifies the final day within code regulations for issuing certificates for the preceding year. The dates for the Residual Mix Deadline have been officially approved by the I-REC Foundation Board. The forthcoming deadline for eligible production between July 1 and December 31, is set for September 30. 

4. Sell I-RECs

Once you have I-RECs available, you can sell them directly to buyers, brokers, or trading platforms. Buyers looking to offset their carbon emissions or meet sustainability goals will be interested in purchasing your I-RECs.

Conclusion

Buying and selling I-RECs is a tangible way for individuals and businesses to engage with renewable energy and contribute to a more sustainable future. Whether you’re an environmentally conscious consumer or a renewable energy producer, I-RECs offer a versatile platform to participate in the global transition towards cleaner, greener energy sources. By understanding the steps involved, you can harness the power of I-RECs to make a positive impact on our planet.