Green Power Partnership

Carbon Footprint Reduction Instruments

Many organizations undertake greenhouse gas (GHG) inventories using standardized approaches and principles to account for their GHG emissions and carbon footprint. From these inventories, organizations develop strategies to effectively manage and reduce GHG emissions and mitigate climate risk involved with their business operations. Through this framework, organizations utilize a variety of instruments to track and substantiate emissions reductions. In the U.S. market, the common instruments used are:

Renewable energy certificates (RECs)—used to manage indirect emissions
Project offsets—used to reduce direct global emissions

Organizations should familiarize themselves with the differences between these two instruments, how organizations use RECs and project offsets within a GHG accounting framework, and what types of claims each instrument allows the organization to make. EPA's Green Power Partnership focuses on the usage of REC-based renewable electricity. Use of project offsets is beyond the scope of the Green Power Partnership. The following table outlines the key differences between the two instruments:

	Renewable Energy Certificates	Project Offsets
*Units of measurement*	Megawatt-hours (MWhs)	Metric tons of carbon dioxide equivalent reduced (MMTCO2e reduced)
*Purpose*	Expand consumer choice, convey environmental attributes and renewable electricity use claims, support renewable energy development	Reduce total greenhouse gas emissions and lower costs of climate mitigation
*Limits to representation*	Does not represent a reduction to total global greenhouse gas emissions	Does not constitute a claim to be using renewable electricity
*Scope of market*	United States, parts of Canada and Mexico REC-like instruments are common in many countries and vary on their definitions and conveyed attributes	Global
*Definition*	A REC is a tradable, contractual instrument that represents the environmental attributes of 1 megawatt-hour of zero-emissions renewable energy generation delivered to the electric grid	A carbon offset is a tradable, environmental commodity that represents the reduction of a specific amount of GHG emissions to the atmosphere and is measured in tons
*Carbon footprint reduction*	RECs are used to address your purchased electricity use (indirect emissions) by allowing you to switch from fossil fuel-based resources to cleaner renewable resources	Offsets are used to address both direct and indirect emissions associated with your organization's operations. These reductions are verified to be permanent and real
*Created by*	Renewable energy projects	Various project types
*Eligible claims*	I use renewable electricity from a zero-emissions resource I reduced my carbon footprint	I reduced global carbon emissions I reduced my greenhouse gas emissions I reduced my carbon footprint
*Quality assurances*	Resource quality and eligibility; discrete ownership; no double counting; other sustainability criteria	Offsets are verified to result in permanent and real emissions reductions; projects are verified to be additional; ownership is enforceable and exclusive
*Additionality required?*	No	Yes
*Resources*	Corporate Greenhouse Gas Protocol Scope 2 Guidance (WRI) Exit	The Greenhouse Gas Protocol for Project Accounting (WRI) (PDF) (148 pp, 8.5MB) Exit