News and insights Blog 5 renewable energy trends to follow in 2025

5 renewable energy trends to follow in 2025

What to keep an eye on in the clean energy and corporate sustainability space.

Written by Ecohz
Published on 24 January 2025
Written by Ecohz
Published on 01 January 2025

Like every year, we are looking ahead to identify key trends for the next 12 months. From emerging conversations in the renewables industry to policy changes that will significantly impact clean energy development, here are five topics that corporate buyers of renewable energy should keep an eye on in 2025.

1 Location and time matching vs. cross-border emissionality

How can corporate demand for renewable electricity achieve the greatest greenhouse gas reductions? This question is at the core of clean energy procurement, and in 2025, two competing perspectives may gain traction in discussions within the industry.

On one side, some advocate for stricter geographic boundaries in market-based renewable procurement, coupled with closer alignment between renewable energy production and consumption times. This approach, they argue, could drive investment in regions that need greater renewable energy deployment, particularly in countries that currently import most of their Energy Attribute Certificates (EACs).

On the other side, some believe that EAC procurement should not be constrained by national or market boundaries. Instead, companies should be free to source renewable energy from regions with high-emission grids, thereby maximising emissions reductions per megawatt-hour and directing more investment toward emerging economies.

As a renewable energy buyer, you may wonder: which approach has the most impact? At Ecohz, we do not subscribe to any single viewpoint. We believe that a plurality of approaches — allowing companies to choose the most viable strategy based on their possibilities — generates the greatest impact.

Decarbonisation tools should be inclusive, enabling broad participation. But as more research, media coverage, and industry voices emerge in support of each approach, we will continue to monitor this debate closely.

2 Presidential uncertainty clouds the US renewable energy market

As the United States prepares for a second term under President Donald Trump, predicting the future of the renewable market is for the brave. In 2016, Trump entered office with a similarly disheartening environmental outlook: deep budget cuts to environmental agencies, a hostile stance towards all things climate, weakened ESG policies, and emissions reduction measures either rolled back or put on ice. Trump has already signed an executive order to pull the US out of the Paris Agreement, again.

Despite this, voluntary renewable energy procurement has shown resilience in the past. When the US exited the Paris Agreement in 2016, voluntary buyers filled in the gap. “There was a lot of uncertainty then,” said Ben Gerber, President and CEO of M-RETS, in a recent interview with Ecohz. “But then many corporates stepped up, like saying, well, we are going to do this regardless of what the government says. And that's when we saw rapid — I can't emphasize that enough — deployment of renewables.”

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Yet, what will unfold this year, let alone over the next four, remains uncertain. “The market was in a very different place back then,” says Ross Pierson, Managing Director at Ecohz Inc. “What happens with the Inflation Reduction Act (IRA) will be telling.” The IRA has been a game changer for renewable energy development, providing an unprecedented boost to the industry. Whether that momentum continues depends on the survival or repeal of a long list of tax incentives.

Meanwhile, the Green-e REC market has remained steady over the past six months. “This is the most stable we’ve seen the market in a long time,” Pierson continues. “While there are many unknowns, voluntary demand and corporate clean energy targets have proven they can withstand volatile periods.”

3 European biomethane continues upward

According to the latest report by the European Biogas Association (EBA), biogas and biomethane are on the rise. The number of biomethane plants in Europe has increased sevenfold to 1,510, while biogas and biomethane production reached 234 TWh — the largest single-year increase on record.

If this trajectory continues, most countries could meet the biomethane targets set in their 2030 National Energy and Climate Plans (NECPs). However, the EBA highlighted that even if NECP targets are achieved, the EU would still require an additional 20 billion cubic metres per year to reach the bloc-wide goals outlined in the REPowerEU plan (35 bcm).

This gap is partly due to a shortfall in investment. Although the report states that “€27 billion has already been earmarked for investments in biomethane production between now and 2030,” further funding will be needed to scale biomethane capacity in line with European targets.

“More regulatory stability, less bureaucracy and lower interest rates could benefit biomethane investments,” says Hugo Malfit, Senior Originator at Ecohz. In particular, the European Central Bank is expected to cut interest rates further in 2025, potentially directing more capital towards the green gas/biomethane biomethane sector and renewable energy at large.

France could become the largest biomethane producer in 2025, ahead of Germany, as the transition from biogas to biomethane seems to be taking longer than expected in the latter. Meanwhile, biomethane producers appear to be shifting toward more sustainable feedstocks. Since 2020, no new plants running primarily on crops have been established, and by the end of 2024, waste biomethane certificates were, on average, several euros more expensive than crop-based certificates — which could indicate a growing market preference.

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4 The I-REC system continues to grow despite setbacks

Several I-REC markets will see changes in 2025. Perhaps the most obvious will happen in China, where the I-REC system will stop operating to give way to national Green Electricity Certificates (GECs). The registration of new production devices for I-REC issuance has already stopped, while issuance for previously registered devices will be allowed until 31 March 2025 — but only for power generated before 31 December 2024.

In Mexico, I-RECs will likely face continued supply constraints. At the end of 2024, the market experienced a severe supply squeeze that left many companies unable to procure sufficient volumes. This bottleneck is expected to persist into 2025. “It is very hard to predict where prices will go at this stage,” says Marine Mouilleron, International Senior Originator at Ecohz. “However, we expect supply shortages to continue.”

Despite these challenges, the I-REC system is likely to keep expanding globally. Issuances in Q1 2024 reached 113 million certificates for the 2023 vintage, compared to 74 million during Q1 2023 for the 2022 vintage. Redemptions also grew, from 53 million in Q1 2023 to 79 million in Q1 2024, both for the previous year’s vintage. While data for 2024 is still limited, we expect this growth trend to continue.

Further, the I-TRACK Foundation has introduced I-TRACK(E), a new product code for non-renewable electricity production. Alongside I-REC(E) — commonly known as I-RECs — the new certificates will “allow for the issuance of every single MWh in the country to be tracked and allocated to one specific end-user, regardless of the energy source.”

Additionally, the I-TRACK Foundation recently launched a residual mix dashboard, now available for all I-REC markets, with annual updates. As the system continues to evolve, its role in tracking environmental attributes worldwide is set to expand.

5 Renewable energy generation will grow, but will climate leadership shift?

Renewable energy remains a reason for optimism. According to projections by the International Energy Agency (IEA), renewable electricity will overtake coal-generated electricity for the first time in 2025, accounting for 35% of global electricity supply. Solar PV, which keeps getting cheaper, “is expected to meet roughly half of the growth in global electricity demand over 2024 and 2025.”

This progress comes against an increasingly complicated backdrop. As mentioned earlier, President Trump has vowed to roll back the Inflation Reduction Act — a key driver of investment in new renewable energy capacity — and exited the Paris Agreement. Yet, other regions could take on greater climate leadership.

According to Eurostat, the EU economy reduced its greenhouse gas emissions by 2.6% in the second quarter of 2024 compared to the same quarter the year before, while the gross domestic product grew by 1%. Increasing sustainability obligations in the region and the block’s clean energy targets are set to keep driving emissions reduction.

Meanwhile, China has reiterated its commitment to addressing the challenges of climate change and promoting global cooperation. Peak oil demand in the country is also projected to come in 2025, five years earlier than previously expected.

2024 was the warmest year on record. But as the world grapples with political turmoil, there are also reasons to believe that this year things will move in the right direction. So keep an eye on these trends. We'll make sure to tell you more as we know it.

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