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Companies pursuing net zero targets need accessible and scalable pathways to achieve enduring emissions reductions. SBTi, the leading emissions reduction standard, mandates emissions cuts on the order of 90%+ for their signatories — a tall order for companies with nascent climate programs.

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While operational decarbonization requires a multi-pronged, context-specific approach, spanning an array of energy efficiency, fleet electrification, sustainable procurement, and waste diversion initiatives, among others, a great place for organizations to start is sourcing renewable electricity. Managing electricity emissions represents a simple, vetted, and effective way to address Scope 2 emissions as organizations continue to deepen their sustainability maturity.

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There are multiple mechanisms for procuring renewable electricity (more on that below!), and companies should develop plans that fit their business needs and respond to local market constraints.

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Across procurement methods — but in particular where electricity is purchased from a third-party generator or supplier — companies can collect Energy Attribute Certificates, or EACs, market-based financial instruments to prove their renewable electricity consumption.

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In this guide, we’ll dive into the basics of EACs and beyond, equipping you to feel confident implementing this lever and reducing your company’s Scope 2 emissions.

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What are the different ways of procuring renewable electricity?

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The gold standard for corporate renewable electricity targets, RE100, recognizes several approaches to actively procure renewable electricity:

1. Self-generation from facilities owned by the company (think: rooftop solar)
2. Direct procurement from producers (think: local power plant feeding a data center; example here)
3. Contracts with suppliers (think: utility green tariff)
4. Unbundled procurement of EACs

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Some of these procurement types have subtypes as well, but these are the broad strokes.

EACs are the instruments issued to producers, then sold to consumers under these procurement contracts. EACs can be sold in tandem with physical energy (“bundled”, methods 2 and 3 above), or separately (method 4).

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With these procurement types in mind, companies can explore different ways of supporting the transition to net zero. They can generate renewable electricity themselves, or send positive demand signals by participating in clean energy markets.

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What are EACs?

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EACs are the universal mechanism for tracking, trading, and proving renewable energy consumption. Each EAC is a transactable instrument representing 1 megawatt-hour (MWh) of electricity produced via renewable resources like solar, wind, and hydropower.

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Each EAC carries details (or attributes) about the electricity produced, and by owning an EAC, a company owns these attributes. These attributes include electricity origin and emissions rates, which are zero for power produced from renewable resources. Companies can then apply EACs and their constituent attributes when calculating their scope 2 emissions*, effectively claiming zero emissions by specifically retiring EACs against an equivalent quantity of electricity consumed.    

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*Market-based method per GHGP Scope 2 Standard.

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Why do EACs matter?

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Your organization can reduce its purchased energy (scope 2) emissions by transitioning from fossil fuel to renewable resources. For many companies, the grid is their only viable source of physical power. However, once power enters the grid, it is impossible to distinguish how it was generated. There’s no way for a company to know if the grid power consumed came from a solar array or a coal plant.

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EACs can be used to demonstrate that an organization is sourcing renewable electricity even as it physically consumes grid power. EACs allow for traceability and verification that electricity is in fact renewable and can be used to claim 100% renewable energy consumption under initiatives like RE100, if certain criteria are satisfied.

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EACs help you lower your scope 2 emissions, hit SBTi targets, or achieve regulatory compliance with climate legislation, with recognition by all major sustainability disclosure frameworks, including CDP and CSRD.

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How do EACs work? 

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EACs can be generated using a wide variety of different technologies, including:

• Hydro-electric
• Solar
• Wind
• Geothermal
• Biomass/biogas

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Renewable energy producers can generate EACs by validating their energy production procedures and outputs against geographically-relevant standards. After passing due diligence, one EAC can be issued per MWh to the producer via a digital registry, assigning unique ownership.

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How do I use EACs?

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After EACs are generated and issued to a producer, a company can purchase them in a quantity equivalent to their electricity usage in the same market. Now the sole owner of those EACs, a company can claim that usage as renewable after retiring (or canceling) that EAC on the corresponding registry.

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Let’s break it down: If you are looking to purchase EACs to reduce your scope 2 emissions, you must first understand your electricity consumption by market and decide how many EACs you need to buy to suit your purposes.

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You will then want to buy a quantity of EACs in each market equivalent to the desired energy consumption you want to offset in that same market.

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After you’ve purchased an EAC, your organization can “cancel” or “retire” the EAC on the registry and claim the corresponding volume represented in MWh as renewable electricity usage. Green Project, an ACT company, handles cancellation on your behalf and provides the cancellation statement as evidence so you can disclose and communicate its use as needed.

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It is imperative to ensure you are purchasing your EACs from trusted providers. Working with a company like Green Project and relying on a digital, data-driven and instantly auditable solution like our Decarbonization Platform can ensure you’re procuring EACs properly.  

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What are the different types of EACs?

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Depending on where you are in the world, you might not use the term EAC in your day-to-day. EACs go by different names regionally, depending on their geography and the certification scheme they fall under.

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Here are a few different types of electricity EACs to keep in mind, broken down by geographic coverage:

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• Renewable Energy Certificates (RECs) – US & Canada
• Guarantees of Origin (GoOs) – Europe
• Other national systems – Many other countries and regions have their own standards and systems for tracking renewable energy. For example, the UK has Renewable Energy Guarantees of Origin (REGOs), China has Green Electricity Certificates (GECs), and Australia has Large-Scale Generation Certificates (LGCs).
• International RECs (I-RECs) – Rest of World: The International Attribute Tracking Standard is used in countries and regions without a nationally-standardized energy monitoring system, such as South America and parts of Africa.

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How do I make sure an EAC is credible?

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It’s critical to make sure that the EACs sourced for your organization both: (i) meet robust quality, authenticity, and transparency standards, and, (ii) are properly used in your company’s environmental claims.

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Working with Green Project can help ensure that all your energy claims are unique, valid, and accurately reflected in your corporate GHG inventory. Green Project brings the full backing of its parent company, ACT Commodities, which has over fifteen years’ experience in EAC markets and a strong track record of providing clients with portfolios of EACs (including eco-labeled high-impact EACs certified under OKPower and EcoPower) that meet their corporate goals.

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Have more questions about EACs?

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Our team of sustainability experts is here to answer any questions you may have. Get in touch to learn more about our Decarbonization Platform for simplified one-click, self-service EAC purchasing.

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