Renewable Energy Certificates and Carbon Offsets

Renewable Energy Certificates are sometimes treated as carbon offsets, but the concepts are distinct. Carbon offsets represent a reduction in greenhouse gas emissions while Renewable Energy Certificates represents a clean energy produced from renewable sources. To convert Renewable Energy Certificates into an offset, the clean energy must be translated into carbon reductions by assuming the displacement of an equivalent amount of conventionally produced electricity. Renewable Energy Certificates, then, can be best defined as indirect offsets.

Renewable Energy Certificates and carbon offsets are two distinct commodities.

Carbon offsets represent the reduction of greenhouse gas emissions in one place "offsetting" an emission taking place somewhere else. They represent direct emission reductions so they should be used to 'offset' direct emissions of your company's footprint.

On the other hand, Renewable Energy Certificates, represent energy generated from a clean, renewable source which generate little to no carbon as they produce energy. They represent an indirect emission reduction, whereby clean energy 'offsets' the demand for more conventional dirty fossil-fueled energy.

To be clear, neither carbon offsets nor Renewable Energy Certificates are better than one another. They are different players in a similar game, both of which help mitigate climate change and reduce our reliance on fossil fuels.