Renewable energy certificates are often misunderstood for lacking real impact. Some say they are complicated, others call them unverifiable. But what’s the truth?
With an abundance of information at our fingertips, it is not difficult for misconceptions to spread, and RECs are no exception. In this blog, we discuss five myths and facts about renewable energy certificates and their role in green energy procurement strategies. 

Myth 1: "RECs are not real" 

Fact: RECs are market-based instruments that help accelerate renewable energy generation.
‍Every single REC stands as proof that 1 megawatt-hour (MWh) of electricity was generated from renewable energy sources. Owning REC is equivalent to owning 1 MWh of clean energy, however, selling or buying RECs does not literally mean trading the electricity. RECs are crucial instruments in a company's decarbonisation strategy. Buying RECs not only benefits companies in their energy goals but also finances newer RE projects, supporting RE generation.

Myth 2: "RECs cause greenwashing”

Fact: Greenwashing is when companies misleadingly promote themselves as environmentally friendly or sustainable, while their actual claims may not have a genuine environmental impact. In recent times, companies have been setting ambitious net-zero goals, but the real impact is still questionable. The data suggests over 900 companies out of Forbes 2000 have set their net zero targets, but only 13% of corporate net zero targets specify quality conditions, with only 4% of company net zero commitments meeting the revised ‘Starting Line criteria’. 

RECs are crucial instruments to accelerate RE generation, making them powerful tools for businesses to meet their green energy procurement goals. With proper verification and transparent audits, RECs can be credible instruments. When used correctly, they contribute to the transition to cleaner energy, helping reduce dependence on fossil fuels.

Myth 3: "RECs trading is complex, expensive and only meant for large businesses."

Fact: Buying and selling RECs on over-the-counter (OTC) markets presents several challenges, such as limited transparency and resource-intensive processes. The complexity of REC trading is often exacerbated by the absence of standardized verification methods to ensure their authenticity.

However, new digital marketplaces like TraceX are transforming the way RECs are traded and tracked, making the process easier than ever. TraceX ensures REC exclusivity and integrity by implementing a robust system that secures RECs in the registry account before transferring them to the marketplace and removes barriers to entry, allowing even small businesses to trade RECs seamlessly. This promotes inclusion, efficiency, and fairness in the REC market.

Unlike traditional methods, these modern marketplaces leverage the power of automation for risk mitigation and streamlining of payments, standardizing contract terms to achieve significant cost savings. With a user-friendly interface, TraceX simplifies REC trading, eliminating complexity and making the process more accessible for everyone.

‍Myth 4: "RECs don’t make a real impact."

Fact: RECs drive demand for renewable energy. Trading RECs on TraceX marketplace drive the growth of renewables through additionality to prioritize investments in new renewable projects, ensuring their investment directly drives the growth of additional renewable energy capacity, rather than simply shifting funds between existing initiatives.

Myth 5: “RECs lack transparency.”

Fact: Choosing RECs based on specific attributes ensures transparency and traceability, allowing users to invest in projects that adhere to high standards of environmental integrity and ethical practices. For example, TraceX integration with CRS ensures that RECs are legitimate and perfectly aligned with facility expiration dates, giving companies confidence that their transactions are timely and accurate. The use of immutable blockchain technology provides verifiable audit trails, fighting the issue of double counting of RECs. 

Discover how renewable energy certificates (RECs) can make a real difference in your ESG strategies. Book a demo to learn more about our REC trading marketplace.

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