Renewable energy’s goal has always been decarbonization. But, with renewable energy projects central to the carbon credit industry, the focus has changed.
In the past, companies used renewable energy projects to create carbon credits. These projects differed from their usual operations. Profits made were then put right back into those projects to keep them running.
But now, credits are worth so much more. The voluntary carbon market has reached $1 billion. This is up from just $300 million in 2018. Some experts think it could reach $100 billion.
As such, energy companies consider carbon credits a financial tool. So, they are no longer getting carbon credits for “extra” projects. Instead, companies are obtaining credits for projects that are a part of their original operating plan.
Carbon Certifiers respond with changes.
Some experts feel that the credits issued as a part of regular operations could negatively affect the carbon market. Because of this, many certifiers have said they will only give credits for renewables in countries that aren’t as developed.
Gold Standard said, “any national or a regional grid-connected Renewable Energy project located in an Upper Middle- and High-Income Country (as classified by the World Bank) shall be deemed ineligible for the issuance of GS-VERs or GS-CERs.”
Certified Carbon Standard agreed.
“Where certain project types have moved beyond their need to be supported by carbon financing, it is not appropriate for Verra to continue supporting such project types.”
Because of this shift, many project owners want other options. And the Renewable Energy Certificates market seems to be a good choice.
Renewables are the sole focus of RECs.
The Importance of renewables.
Research has shown that fossil fuels have caused the Earth’s temperature to increase .3 and 1 degree Celcius. In 2018, 89% of carbon emissions were from the fossil fuel industry. In 2019, GHG emissions were at 36.7 metric tons.
Since renewable energy is needed to fight climate change, incentives to switch to and produce renewables are essential.
Gold Standard and Verra have both said that their regulations on renewable energy credits do not apply to REC market certification.