Understanding EACs in North America: The role of Renewable Energy Certificates (RECs)

In the United States and Canada, the conversation around renewable energy is evolving fast. From corporate climate pledges to new state-level disclosure laws, organizations are under pressure to demonstrate credible action on decarbonization. One of the most effective—and widely used—tools for doing so is the Renewable Energy Certificate, or REC.

RECs are a version of Energy Attribute Certificates (EACs), and they play a central role in helping companies reduce their Scope 2 emissions, meet sustainability targets, and align with global reporting frameworks. But the North American REC market is unique: it’s fragmented, dynamic, and shaped by a mix of voluntary and compliance-driven forces.

In this blog, we’ll explore how RECs work, what distinguishes the North American market, and how to approach REC procurement strategically.

Or, if you’re looking for a comprehensive overview of EACs, our EAC buyer’s guide provides a deep dive into how they work, their benefits, and their challenges.

What Are Renewable Energy Certificates (RECs)?

A Renewable Energy Certificate (REC) represents the environmental attributes of one megawatt-hour (MWh) of electricity generated from a renewable source, such as wind, solar, or hydro. When a renewable energy facility generates electricity and feeds it into the grid, it produces a REC. These certificates can be sold separately from the electricity itself, allowing organizations to claim the environmental benefits of renewable energy, regardless of where their physical power comes from.

RECs are the only recognized way to track and verify renewable electricity use in North America. They’re accepted by major sustainability frameworks like RE100, the Science-Based Targets initiative (SBTi), CDP, and the Greenhouse Gas Protocol.

A fragmented but functional market

Unlike Europe’s harmonized Guarantee of Origin (GO) system, North America’s REC market is highly decentralized. There are more than 10 registries across the U.S. and Canada, each with its own rules, tracking systems, and regional dynamics.

There are two main types of REC markets:

• Compliance markets: Driven by state-level Renewable Portfolio Standards (RPS), utilities must source a certain percentage of their electricity from renewables. These markets often have specific technology or location requirements and can be highly competitive.
   
• Voluntary Markets: These are where companies and individuals purchase RECs to meet internal sustainability goals or align with global reporting standards. These markets offer more flexibility in terms of geography and technology.

Despite the complexity, the North American REC market is one of the most active in the world. In 2024, the North America REC market was valued at $5.9 billion, with forecasts predicting that the US voluntary REC market will advance at a 15.9% compound annual growth rate from 2024 through 2033.

What’s driving demand for Renewable Energy Certificates?

Several key trends are fueling the growth of REC demand in North America:

1. Corporate climate commitments

   Many companies have set ambitious net-zero or 100% renewable energy targets, often with 2030 or 2040 deadlines. RECs offer a scalable, flexible way to meet these goals, especially for organizations with distributed operations across multiple states or provinces.

2. Supply chain pressure

   As more companies adopt Scope 3 emissions targets, they’re asking suppliers to reduce their own emissions. For many suppliers, purchasing RECs is the most accessible way to demonstrate progress.

3. Regulatory developments

   States like California, New York, and Colorado are introducing laws that require large companies to disclose their emissions and climate-related risks. These regulations are increasing the need for accurate Scope 2 reporting, and RECs are the most precise tool for the job.

    

Renewable Energy Certificate market challenges: What to watch out for

While the REC market in North America is well-established and supported by a robust infrastructure of registries and trading platforms, it’s far from simple. The region’s patchwork of state-level regulations, voluntary initiatives, and compliance programs creates a complex environment for buyers to navigate. In addition to the growing demand for corporate sustainability commitments and evolving disclosure laws, it becomes clear that even experienced buyers can face unexpected hurdles.

Understanding these challenges is key to building a resilient and effective REC strategy. Here are a few of the most common issues to keep in mind:

• Price volatility: REC prices can vary widely depending on region, technology, and whether the market is compliance-driven or voluntary. For example, solar RECs in New Jersey may trade at a premium compared to wind RECs in Texas.
   
• Supply and demand imbalances: Some regions are oversupplied, while others face tight markets due to high demand or limited renewable generation.
   
• Geographic constraints: While RE100 allows RECs to be sourced from anywhere within the North American grid, some buyers prefer to source locally for reputational or stakeholder reasons.
   
• Administrative complexity: Managing REC purchases across multiple registries and compliance periods can be time-consuming without the proper support.

Best practices for Renewable Energy Certificate buyers

RECs are a cornerstone of renewable energy procurement in North America. Whether you’re just starting your sustainability journey or scaling a global strategy, understanding how RECs work—and how to buy them effectively—can make a big difference.

To make the most of your REC strategy, consider the following:

• Start with data: Understand your electricity consumption in megawatt-hours and align your REC purchases accordingly.
   
• Know your goals: Are you aiming for RE100 compliance? Looking to support local projects? Your objectives will shape your sourcing strategy.
   
• Plan ahead: Forward purchasing can help lock in prices and secure supply, especially in tight markets.
   
• Diversify: Consider a mix of technologies, geographies, and contract lengths to balance cost and impact.
   
• Work with experts: An expert can help you navigate market dynamics, ensure compliance, and streamline procurement.

At World Kinect, we’ve been active in global EAC markets for over 12 years, sourcing from more than 60 countries and trading over 20 terawatt-hours of certificates annually. Our North America-based team works closely with clients across industries to design credible, cost-effective REC strategies that are aligned with leading sustainability frameworks.