by David Antonioli (former CEO of Verra) and Mark Goldman (Head of Science at Residual)
For years, Renewable Energy Certificates (RECs) have been the default market-based instrument to support overall decarbonization. If a company used electricity, it bought RECs. The box was ticked, the claim was made, and everyone moved on.
That model is starting to break.
This is not because renewable power no longer matters. It is because RECs increasingly fail to answer the question that matters most. Are emissions actually being reduced?
RECs were designed for an earlier phase of the energy transition. When wind and solar were expensive and uncertain, selling their environmental attributes helped projects get built. There was a reasonable assumption that buying RECs supported additional clean generation, even though RECs never had to demonstrate additionality the way carbon credits need to prove.
In many markets, that assumption no longer holds. Renewables are often the cheapest form of new power. Most RECs now come from projects that are already built, already financed, and readily profitable. Buying the certificate rarely changes investment decisions or grid outcomes. It changes the accounting.
At the same time, electricity demand is rising fast. Data centres are a visible driver, but not the only one. Electrified transport, heating, and industry are all increasing the load on grids that still rely on fossil generation at the margin. In that context, annual and unbundled RECs sit uncomfortably alongside rising real-world emissions.
This tension is becoming impossible to ignore.
As scrutiny increases, companies are starting to ask a more direct question. If RECs are no longer enough, what actually works?
That question is pulling high-integrity carbon credits back into focus, althouth tackling the rapid growth in electricity demand will require projects than can deliver immediate and scalable emission reductions.
Of course, clean electricity procurement remains essential for long-term grid decarbonisation. However, the hierarchy for market-based solutions is shifting, especially given the substantial growth in demand for electricity and the need for solutions today.
RECs are increasingly a compliance and signalling tool. They say something about intent and procurement choices. They say less about real-world emissions.
High-integrity carbon credits are filling the gap. Not as a substitute for clean power, but as a way to address emissions that cannot yet be eliminated and are growing by the day, doing so honestly and immediately. There is an imperative to drive scale now.
Standards bodies already allow this, even if cautiously. The GHG Protocol permits carbon credits to address residual emissions.
What is emerging is not a clean swap, but a rebalancing. The centre of gravity is moving away from convenient accounting and toward physical outcomes.
In a world of accelerating energy demand and narrowing climate timelines, this shift is rational. When the problem is immediate, the response has to be immediate too.
The real question is no longer whether RECs or carbon credits are theoretically preferable. It is whether climate strategies are designed to look good on paper, or to stop emissions from entering the atmosphere right now.
Read more: GHG Protocol Rolls Out First Global Standard For Land-Sector Emissions And Carbon Removal
