Making Environmental Claims
Organizations that voluntarily buy green power generally do so in order to make a claim (express or implied) about what they are doing differently. Organizations should consider the following when making environmental claims:
- Ensure your contractual right to make claims. You should ensure that your green power purchase contractually conveys the full rights to the environmental benefits of the generation source. In the United States, this is generally substantiated through the conveyance and ownership of renewable energy certificates (RECs). Your organization must retain these rights in order to make an environmental claim. This includes power purchase agreement (PPA) and leased system contracts where the system is owned and operated by a third party.
- Ensure your purchase does not count towards a mandate. Buyers of unbundled RECs or bundled green power products should ensure that their supplier is not also applying the underlying attributes and environmental benefits to a mandate (e.g., a state renewable energy portfolio standard [RPS]). Such a situation would constitute a double claim between you and your supplier.
- Make claims that match the scope of your purchase. If you are buying green power for a subset of your organization (i.e., facility-level), you should communicate the scope of your purchase when making your claims.
- Organizations should avoid making claims where green power purchases originate from projects in markets outside of where the green power will be applied. Corporate scope 2 greenhouse gas guidance recommends that green power come from the same market in which your operational use of electricity occurs. The United States is considered a single electricity market; thus, green power applied to U.S. operations should be sourced from U.S. interconnected projects.
- Retain ownership of RECs for on-site green power. If you own an on-site renewable electricity generation source, you should avoid selling the associated RECs of the on-site source if you wish to make an environmental claim. Selling the RECs transfers your claim on the renewable attributes of the system to the buyer of the RECs. If the system is developed through a third-party ownership structure (e.g., PPA or lease), you should ensure that the contract conveys the ownership of the associated RECs to your organization.
- Retire the RECs associated with your green power purchase. Your organization should retire the RECs associated with its green power purchase. Organizations should not transfer or sell RECs after a claim has been made. Making a claim constitutes a retirement of the REC; any sale or claim by a different owner would constitute a double claim. In taking these steps, you help avoid two different parties claiming the same green power benefits. Formal REC retirement mechanisms exist for RECs issued by tracking systems. Ask your supplier about REC retirement options on your behalf.
- Support your claims by buying certified or verified green power products. Your organization should consider buying green power products that are independently certified and verified by a third party. Certification can provide credibility and confirmation of the product's environmental value. Verification is based on an audit—independent of the provider—that confirms that you get what was promised, both in quality and in quantity. Audits ensure that no one else is making a claim on the same environmental benefits.
- Limit claims to indirect emissions. Be careful when making claims about emissions reductions. If you are buying renewable electricity or RECs, you are reducing your indirect emissions. Indirect emissions are those resulting from electricity generation that an organization buys from an electricity service provider. EPA advises organizations buying green power to limit their claims to reducing their carbon footprint, and not to claim to be reducing their total emissions to the atmosphere.
- Avoid claiming emissions reductions not included in your purchase. In emissions markets regulated by cap and trade programs, such as with nitrogen oxides (NOx) and sulfur oxides (SOx), your organization can claim an emission reduction only if it buys and retires emission allowances. These allowances may be a part of, or separate from, buying RECs.
- Use the terms "REC" and "offset" correctly in your claims. RECs are not offsets. The term "offsets" has various definitions among greenhouse gas registries and programs. In voluntary markets, offsets are emissions reductions that are achieved through projects that cause verifiable emissions reductions outside the scope of an organization's direct or indirect emissions. In regulated cap and trade programs, offsets can have a specific legal meaning as a noun.
- RECs substantiate the claim that you are using a specific number of megawatt-hours of renewable electricity from a zero-emissions renewable resource. REC-based green power products do not convey a direct emissions reduction. Claims related to avoided or direct emissions reductions should be avoided and are not conveyed through REC-based green power purchases.
- Follow Federal Trade Commission (PDF) (36 pp, 195K) and National Association of Attorneys General green marketing guidance (PDF) (21 pp, 206K). These guides apply to environmental claims included in labeling, advertising, promotional materials, and all other forms of marketing, whether asserted directly or implied through words, symbols, emblems, logos, depictions, product brand names, or any other means, including marketing through digital or electronic means, such as the Internet or electronic mail. The guides apply to any claim about the environmental attributes of a product, package, or service in connection with the sale, offering for sale, or marketing of such product, package, or service for personal, family, or household use, or for commercial, institutional, or industrial use.
Partner organizations are encouraged to contact their Green Power Partnership account manager for assistance when making voluntary green power claims.