The requirement of precise and unambiguous environmental reporting has never been more important as companies work towards increased sustainability. Leading worldwide forum for businesses to reveal their environmental effect is the Carbon Disclosure Project (CDP). Energy Attribute Certificates (EACs) and Renewable Energy Certificates (RECs) are quite important under CDP reporting. On these instruments, there are various misunderstandings, though. Here we investigate seven typical misunderstandings concerning EACs and RECs in CDP reporting.
1. EACs and RECs Are the Same
One often held belief is that EACs and RECs are exactly the same. Although both certifications show the advantages for the environment of renewable energy, they differ in nature. While REC refers especially to certificates in the United States, EAC is a general term used to describe many certifications issued elsewhere. Accurate reporting and regional standard compliance depend on a knowledge of the differences between EAC vs REC.
2. RECs Are Only Relevant in the US
Though not quite accurate, many people think RECs are exclusively relevant inside the United States. Though RECs started in the US and are mostly utilised there, under some circumstances they can be transferred abroad. Globally active companies should know how RECs could fit into their more general sustainability plans and CDP reporting systems.
3. Using EACs or RECs Guarantees Reduced Emissions
Another myth is that buying EACs or RECs straight lowers a company’s carbon footprint. Actually, these certificates show that someplace on the system renewable energy has been generated, but they don’t lower the direct emissions of the buyer. They help to promote the generation of renewable energy and assert in CDP reporting the environmental advantages connected with it.
4. EACs and RECs Are the Only Way to Report Renewable Energy Use
Some say that the only ways to document usage of renewable energy in CDP reporting are EACs and RECs. Other instruments, such on-site renewable energy generation and Power Purchase Agreements (PPAs), can also be documented though. Businesses should investigate all possibilities to guarantee accurate and complete documentation of their consumption of renewable energy.
5. All EACs and RECs Are Equal
Not every EAC and REC is formed equal. Depending on their source, certification, and additionality, these certifications might have quite different worth and influence. Certificates from recently built renewable energy projects, for instance, could have more influence on advancing renewable energy growth than those from past projects. Making good CDP reporting and informed buying decisions depend on an awareness of these subtleties.
6. EACs and RECs Are a Substitute for Direct Renewable Energy Investments
EACs and RECs are sometimes thought to be able to substitute direct renewable energy expenditures. Although they are helpful instruments for promoting renewable energy, they should complement rather than replace direct renewable energy projects as on-site solar panels or PPAs. Combining these methods could offer a stronger plan for lowering environmental impact and improving sustainability reporting.
7. EACs and RECs Are Permanent Solutions
Some businesses wrongly believe EACs and RECs will be permanent fix for reaching environmental targets. Though longer-term plans are still under development and execution, they should be seen as transitional instruments that assist the change to renewable energy. For more sustainable and effective CDP reporting, businesses should strive to progressively raise their direct usage of renewable energy and progressively lower reliance on certificates over time.
Effective CDP reporting depends on an awareness of the subtleties and variations between EACs and RECs at least. Companies make better judgements when they understand that EACs and RECs are not synonym, not exclusive to the US, and not direct emissions reducers. Furthermore guarantees a more strategic approach to sustainability recognising that these certificates are not equal, not alternatives for direct investments, and not permanent answers. Clarifying these misunderstandings helps companies to properly use EACs and RECs while pursuing long-term environmental objectives.