• Global renewable energy certificates market revenue is expected to increase by USD 186.5 billion by 2032, with a 28% CAGR from 2024 to 2032
• North America region led with more than 42% of renewable energy certificates market share in 2023
• The International Renewable Energy Agency (IRENA) reports that the global capacity of renewable energy sources reached 2,799 GW in 2020, accounting for 72% of net additions to global power capacity that year
• In Europe, the European Commission reports that the total installed capacity of renewable energy sources in the EU reached 388 GW in 2020, accounting for 38% of the EU's electricity generation
• By energy type, the solar energy segment captured the largest market share in 2023
• Increasing adoption of renewable energy sources, drives the renewable energy certificates market value

Renewable energy certificates (RECs) are market-based, tradable instruments that signify the environmental benefits of generating one megawatt-hour of electricity from a renewable source. By selling RECs, producers of renewable energy receive financial incentives, promoting further development in the sector. These certificates allow individuals and organizations to support renewable energy initiatives without directly purchasing or consuming the energy. RECs are utilized in both voluntary and compliance markets, with the voluntary market representing a larger portion of the total market.

The renewable energy certificates (RECs) market has seen significant expansion recently, fueled by rising demand for renewable energy, the implementation of renewable energy goals and requirements, and the surge in voluntary carbon offset initiatives. Moreover, the enforcement of renewable energy objectives and regulations in different nations and regions, such as the Renewable Portfolio Standards (RPS) in the U.S. and the European Union's Renewable Energy Directive, is projected to propel REC market growth further. Additionally, the escalating emphasis on corporate sustainability and the increasing desire for carbon neutrality are anticipated to boost demand for RECs in the voluntary sector.

Global Renewable Energy Certificates Market Trends

Market Drivers

• Increasing adoption of renewable energy sources
• Rising demand for carbon neutrality and corporate sustainability
• Government mandates and policies promoting renewable energy
• Growing awareness about the environmental benefits of renewable energy

Market Restraints

• Lack of standardization and transparency in REC certification and trading
• High transaction costs associated with REC trading

Market Opportunities

• Growing interest in renewable energy investment and financing
• Increasing demand for green and sustainable products and services

Renewable Energy Certificates Market Report Coverage

Renewable energy certificates (RECs) represent the environmental characteristics of electricity generated from renewable energy projects. Marketed distinctively from conventional electricity, they go by various names such as renewable energy credits, green tags, tradable renewable certificates, or green certificates. These certificates serve purposes like disclosure, marketing, and compliance monitoring. Customers purchase them regardless of whether they access green power from their competitive electricity provider or local utility, enabling them to buy RECs without switching electricity suppliers.

Renewable Energy Certificates (RECs) categorize renewable energy production into various types such as biomass, solar, hydroelectric, geothermal, and wind energy. They are traded globally by certificate marketers. Many incentives, including rebates and tax benefits, support renewable energy generation. RECs stimulate the renewable energy market by ensuring that an equivalent number of certificates are generated for each unit of renewable electricity produced. These certificates can be traded internationally, offsetting the use of conventional energy. Despite this, environmental organizations argue that the current certification process lacks ecological benefits, potentially hindering market growth in the future.

Renewable energy produces electricity transmitted through an extensive grid network. This grid is divided into regional power pools, often lacking proper interconnection. To facilitate the sale of renewable electricity, a governing body was established to differentiate between the electricity generated by renewables and the renewable attributes of that generation. These attributes are marketed internationally as Renewable Energy Certificates (RECs). However, no certificates are issued for the electricity itself, as it's not classified as renewable or green energy.

The collaborations by key player’s offers opportunity for large businesses to achieve net zero emissions. For instance, KBank and INNPOWER joined together in March 2024 to launch Thailand's first renewable energy certification platform. This effort attempts to promote the use of renewable energy in Thailand. KBank has also launched a variety of products and services. Moreover, the escalating global warming triggered by fossil fuel combustion is poised to amplify the necessity for renewable energy certificates. These certificates play a pivotal role in international trade, facilitating the advancement of the renewable energy sector. Given the substantial production costs associated with renewable energy, these certificates will provide an additional revenue stream for energy providers, consequently boosting their demand. With burgeoning populations and escalating industrialization, nations across Africa and Asia are witnessing a surge in electricity demand. Moreover, the doubling of power demand is propelled by intensified infrastructure development, particularly in Asia. China leads the pack in renewable energy investments in Asia, while the United Kingdom and Denmark take the helm in Europe. With a mounting emphasis on reducing carbon footprints and promoting green energy, markets such as Ireland and Scotland are poised for significant growth in renewable energy certificate demand.

Renewable Energy Certificates Market Segmentation

The global renewable energy certificates market segmentation is based on energy type, end use, and geography.

Renewable Energy Certificates Market By Energy type

The renewable energy certificates market has witnessed substantial growth in the solar energy segment in recent years. Solar power has emerged as a pivotal renewable energy source, buoyed by decreasing costs of solar panels, enhanced efficiency, and supportive governmental initiatives. Consequently, solar energy has become a prevalent commodity in REC trading, spurred by escalating demand, especially in burgeoning economies like China and India, and the rising integration of solar energy in commercial and industrial spheres. Additionally, the report underscores that the escalating emphasis on sustainability and the implementation of eco-friendly procurement policies by corporations are anticipated to bolster the demand for solar RECs in the voluntary market.

Renewable Energy Certificates Market By End Use

The forecast for the renewable energy certificates market suggests a notable surge in the voluntary segment in the upcoming years. This sector encompasses organizations procuring RECs voluntarily to counterbalance their carbon footprint and bolster renewable energy initiatives. It's becoming a prominent player in the REC market, anticipated to expand at a faster pace than the compliance market. Moreover, the voluntary segment stands to gain from the growing adoption of ambitious renewable energy goals by companies, like aiming for 100% renewable energy, which is projected to fuel demand for RECs in this sector.

Renewable Energy Certificates Market Regional Outlook

North America

Renewable Energy Certificates Market Regional Analysis