Jul 30, 2021
Green certificates certify the environmental value of electricity generated from renewable sources such as solar and wind power. By purchasing these certificates, companies and local governments are recognized as using green electricity, enabling them to contribute to environmental protection and the fight against global warming.
These certificates are issued by third-party certification bodies based on the amount of electricity generated as reported by power producers. Even if organizations cannot install their own renewable energy facilities due to space or other limitations, they can still support environmental efforts by purchasing certificates and reporting their renewable energy use and CO2 reductions.
Green power refers to electricity generated from renewable sources such as solar, wind, hydro, geothermal, and biomass. Unlike fossil fuels, renewable energy generates electricity with minimal environmental impact, producing little to no greenhouse gas emissions.
A green certificate is a tradable instrument that represents the environmental value of green power. By purchasing this certificate—separately from the electricity itself—organizations without renewable energy facilities can claim the equivalent environmental value. In effect, the electricity they use is considered to come from renewable sources in the amount stated on the certificate.
Green certificates represent the environmental value of electricity generated from renewable sources and can be purchased from certified issuing organizations.
After obtaining facility certification from a third-party body, the issuing organization commissions a power producer to generate electricity from renewable energy. The producer reports the amount of electricity generated, and the issuing organization purchases both the electricity value and its associated environmental value.
A third-party body certifies the amount of power generated based on guidelines from the Agency for Natural Resources and Energy. After the environmental value is transferred, the issuing organization provides green certificates based on the amount of certified power requested by environmental value holders, such as companies and local governments.
One benefit of purchasing a green certificate is its contribution to environmental conservation and global warming mitigation. By purchasing certificates, companies and local governments can attribute environmental value to the electricity they consume, as the certified amount is recognized as having been generated from renewable sources. This allows entities that cannot install renewable energy facilities—due to space or other limitations—to still support sustainability efforts.
Additionally, renewable energy use and CO2 reductions can be disclosed through various reporting systems. Power companies can also consider their electricity as renewable by purchasing green certificates. Similar schemes include non-fossil certificates, which enable companies and individuals to offset CO2 emissions.
