“While the compliance markets have their own oversight mechanisms, there are virtually none in the voluntary space,” Michelle McGinty, Senior Outreach Manager at CRS, explains. “Green-e® ensures voluntary consumers of renewable energy get what they are promised and helps them meet certain quality criteria.”
With the help of an independent governance board, Green-e® establishes sustainability standards for renewables. These include restrictions on hydropower to make sure it comes from low-impact facilities and rules for the feedstocks of bioenergy. “You can’t just burn a tree and call it sustainable,” McGinty says.
The programme also sets a 15-year date limit on eligible power plants, meaning certified facilities must be under 15 years old to incentivize the construction of new devices. “The idea is to create a demand signal and encourage a growing renewable energy market by funnelling voluntary funds towards newer installations.”
Voluntary action should also stimulate growth by becoming a regulatory surplus. In the US, state-wide renewable portfolio standards (RPS) dictate the share of renewables that utilities must offer their customers – a minimum threshold for clean energy in the grid. For example, California aims to have 52% renewable energy by 2027, a legally binding target. All purchases of Green-e® must be additional to that percentage.
"We are trying to move the needle above and beyond business as usual."
“This is becoming a key aspect of Green-e® products,” McGinty assures. “We keep track of all the different state regulations and, as they change, we make sure there is no overlap and buyers are not just subsidizing some state to get to a goal required by law. Voluntary action must be incremental. We are trying to move the needle above and beyond business as usual.”
Renewable Energy Certificates (RECs) are used to track clean energy purchases in the US and Canada. However, consumers may not always get the full view and know exactly where their energy comes from. There is still a lack of transparency in the voluntary market, and transparency is essential to sustainability claims.
“When buying non-Green-e® RECs, you could be buying anything really,” McGinty continues. “Energy could come from large hydro that causes environmental harm or an old facility. You could still claim to consume renewable energy, but you are not using your purchasing power to drive the industry forward.”
CRS carries out an annual audit that adds transparency to voluntary purchases. First, it pre-approves power plants that meet the sustainability criteria for Green-e® Energy issuance. Then, it verifies that all RECs sold by Green-e® Energy providers, such as Ecohz, come from the plants they are supposed to.
Traceability creates confidence. This is why an increasing number of standards and leadership initiatives – including CDP, RE100, the GHG-P and B-Corp – require or reference Green-e® certified RECs. The label adds credibility to customer-facing claims, too.
“There is simply no other program that offers universal credibility like Green-e®,” Jacob Ranta, Managing Director of Ecohz Inc., says. “It guarantees that clean energy is generated under the highest standards and that associated product ownership is completely verified. Our customers – leaders in the renewable energy industry – greatly value the reliability the CRS program provides.”
“There is simply no other program that offers universal credibility like Green-e®.”
At the same time, Green-e® could soon help businesses comply with new regulations. The state of California has already approved the Climate Corporate Data Accountability Act, which demands energy reporting from large companies. “The Securities and Exchange Commission will probably also require disclosure soon,” McGinty adds. “Green-e® will play a more and more crucial role as regulators put a magnifying glass on corporate procurement.”
Renewable energy goals are dissimilar across states. While Illinois and Maine aim for 100% renewables by 2050, Ohio currently requires a meagre 2%. In 2021, Montana repealed its renewable portfolio standard altogether.
These differences, however, create space for voluntary actors to amplify the impact of their clean energy strategies. “Some Green-e® buyers choose to source as local as possible, affecting the grid they are in,” McGinty explains. “Others attempt to maximise avoided emissions by supporting renewables in dirty grids.”
That idea extends to Power Purchase Agreements (PPAs). Through the Green-e® Direct program, companies can certify PPAs to make them eligible for leadership initiatives. Further, by constantly monitoring policy, Green-e® Direct assures PPA holders that their actions remain voluntary and additional to evolving legal mandates.
There is no right or wrong strategy. Rather than dictating guidelines for voluntary action, Green-e® makes room for consumers to use their procurement plans as they see fit while assuring them that they are filling the gaps left by regulators. “We see the mandatory and voluntary markets working in tandem. The voluntary space gives another lever for people to contribute and push the renewable energy market forward.”
Ecohz is a provider of Green-e® Energy in the United States and Canada. Our team can source RECs according to any specification, including technology, location, and age of the production device.
Our experts are here to help you maximise the environmental benefits of your energy purchases. If you need assistance developing a decarbonisation strategy or getting started with your emissions reduction efforts, Ecohz can guide you every step of the way.