Energy Attribute Certificates

What an EAC Is and Why It Exists

An electricity grid is a single physical pool. Once a wind turbine, a coal plant, and a solar farm all feed power into the same network, no consumer downstream can identify which electrons came from which source. The electricity is fungible. The renewable attribute — the fact that one MWh was generated from a renewable source rather than a fossil one — is not.

That is the two-product problem. Electricity is a fungible commodity; the renewable attribute is a specific, traceable, accountable claim. The Energy Attribute Certificate exists to separate the two so the attribute can be tracked, transferred, and retired without requiring the underlying electrons to follow the same path. One MWh of qualifying generation produces one EAC; one EAC retired against one MWh of consumption is the basis for a renewable-energy claim against that consumption.

EACs are not carbon offsets. They do not represent emissions reductions in the abstract. They represent the renewable attribute of a specific MWh of generation in a specific time period in a specific market, recorded on a registry, transferred from generator to buyer, and retired to extinguish the claim so it cannot be counted twice. The mechanism is closer to a deed of title than to a carbon credit.

The EAC Family — Four Instruments, One Concept

Four major instrument families dominate the global EAC market. They are recognised by the GHG Protocol Scope 2 Guidance as functionally equivalent provided each meets the quality criteria in §3 below. The differences lie in geography, registry operator, and the regulatory frameworks each interacts with — not in the underlying concept.

Sources: GHG Protocol Scope 2 Guidance (2015) Annex A; AIB EECS Rules (current release); Ofgem REGO Scheme; I-REC Standard Code v2.

RECs — the US system

RECs are the oldest and largest EAC market by volume. They are issued by regional tracking systems — M-RETS in the upper Midwest, WREGIS in the western interconnection, NEPOOL-GIS in New England, PJM-GATS in the mid-Atlantic, ERCOT for the Texas grid. Each tracking system maintains its own ledger; certificates do not freely flow between them. Compliance RECs satisfy state Renewable Portfolio Standards (RPS); voluntary RECs feed the corporate market-based reporting market.

GOs — the EU system

Guarantees of Origin operate under the EU Renewable Energy Directive (RED II / RED III) and are administered by the AIB EECS framework. They are issued for renewable generation across EU member states and several EEA participants, and are tradable across borders within the AIB hub. GOs cover both electricity and, increasingly, gas (biomethane GOs).

REGOs — the GB system

REGOs are administered by Ofgem and apply to generation in Great Britain (England, Scotland, Wales). After the UK’s exit from the EU, GB REGOs and EU GOs operate as parallel rather than interchangeable schemes — GB REGOs do not satisfy AIB GO obligations and vice versa. Northern Ireland uses a separate REGO scheme tied to the all-island Single Electricity Market.

I-RECs — international coverage

The I-REC Standard fills the gap outside the EU/EEA and the US. It operates in markets including India, China, Brazil, South Africa, the UAE, Indonesia, Mexico, and many others. I-RECs are widely used by multinationals reporting global Scope 2 inventories where some operations sit outside REC-, GO-, or REGO-eligible jurisdictions. Local schemes exist in some markets (Australia’s LGCs, Japan’s J-Credits) and are accepted under the GHG Protocol on the same equivalence basis.

EACs in the GHG Protocol Scope 2 Market-Based Method

The 2015 GHG Protocol Scope 2 Guidance introduced the dual-reporting requirement that has defined Scope 2 disclosure ever since. Every reporting entity calculates and discloses two Scope 2 figures: the location-based figure (using the grid average emission factor for the country or region of consumption) and the market-based figure (using contractual instruments — primarily EACs — to reflect supplier-specific or attribute-backed supply). Both figures are mandatory. Neither replaces the other.

The arithmetic is straightforward: when an EAC from a renewable generator is retired against a MWh of consumption, that MWh is treated in the market-based figure as having an emission factor equal to the supplier-specific factor of the underlying generator — typically zero for wind, solar, hydro, and other zero-combustion sources. Sum across all consumption, and the market-based figure is the total. Where no EAC is held, the market-based figure falls back to the residual mix factor of the country (or to the supplier-specific factor of the actual contracted supplier, if that supplier provides one). The location-based figure, by contrast, ignores all contractual arrangements and uses the average grid factor — for the UK that is the DEFRA 2025 published value of 0.177 kg CO₂e/kWh, for France the IEA 2026 value of 0.052 kg CO₂e/kWh, and so on.

The eight GHG Protocol quality criteria

For an EAC to be eligible to back a market-based Scope 2 claim, the GHG Protocol Scope 2 Guidance sets out eight quality criteria. The certificate must:

1. Convey the attribute associated with a unit of electricity, exclusively.
2. Be the only instrument carrying that attribute claim (single-claim — no double-counting).
3. Be tracked and redeemed, retired, or cancelled by or on behalf of the reporting entity.
4. Be as close as possible to the period of energy consumption to which it is applied — and within the same reporting year wherever feasible.
5. Be produced within the same market boundaries as the consumption it offsets (geographic match).
6. Carry information about the energy generation source, including the type of generator and the date of operation start (vintage).
7. Not have been previously used or claimed by another entity.
8. Be associated with energy generation that occurred no more than 21 months before or after the reporting period.

Practitioners frequently reduce these to three working tests: vintage (criterion 8 — same reporting year), geography (criterion 5 — same market boundary), and exclusivity (criteria 1, 2, 7 — single-claim, no resale, properly retired). Most EAC eligibility disputes resolve to one of those three.

Bundled vs. Unbundled EACs — the Distinction That Matters

EACs split into two categories by how they reach the buyer. Bundled EACs travel with the underlying electricity contract — a power purchase agreement (PPA) where both the commodity power and the attribute certificates are purchased from the same generator over the contract term. Unbundled EACs are purchased independently of any electricity contract, typically on the spot market through a broker, with no contractual link to the buyer’s actual electricity supply.

Both are valid under the GHG Protocol Scope 2 Guidance. Both pass the eight quality criteria provided each individual certificate meets them. The distinction has no effect on the per-MWh arithmetic. But the two are not treated equally by the disclosure frameworks layered on top of GHG Protocol — and over the past three reporting cycles the gap has widened.

The reason the gap exists is the question of additionality — whether the EAC purchase actually causes additional renewable generation to be built that would not otherwise exist. A long-term PPA at a contracted price provides a generator with the revenue certainty needed to finance new construction. A spot-market unbundled REGO purchase at sub-£1/MWh, against generation that has been operating since 2010, provides essentially no such signal. Both are compliant under GHG Protocol; only one credibly supports the energy transition the disclosure is meant to demonstrate.

This is why CSRD/ESRS E1 and SBTi have layered additional quality criteria on top of GHG Protocol — neither rejects unbundled EACs outright, but both require greater disclosure and place them lower in the quality hierarchy than PPAs and bundled EACs.

The Grid Factor Baseline and What an EAC Actually Changes

To understand what an EAC does and does not change, work through the same MWh of consumption in the three possible reporting states. Each state produces a different market-based figure. None of them changes the location-based figure.

Consider a UK office consuming 1,000 MWh of grid electricity in 2025. The location-based figure uses the DEFRA 2025 UK grid factor of 0.177 kg CO₂e/kWh (a -15% step down from the 2024 release of 0.20705 kg CO₂e/kWh, driven by lower natural gas in the UK generation mix and increased net imports through interconnectors). 1,000 MWh × 0.177 kg CO₂e/kWh = 177,000 kg CO₂e = 177 tCO₂e location-based. That figure is fixed by grid composition, not by procurement choices, and it appears in every disclosure regardless of EAC retirement.

UK location-based: DEFRA 2025 (-15% vs 2024). GB residual mix ≈ 0.243 kg CO₂e/kWh: AIB European Residual Mixes for 2024 (published Q3 2025) — hardcoded; no MasterBrain key for residual-mix data yet. US-REC-against-UK-consumption row fails GHG Protocol Scope 2 Guidance criterion 5 (market boundary).

The first row is the no-EAC default. With no contractual instrument retired, the market-based figure falls back to the residual mix — the emission intensity of grid generation after the renewable attributes already claimed by EAC buyers have been removed from the pool. The residual mix is always higher than the average grid factor because it concentrates the fossil generation among the buyers who have not separately claimed renewable attributes. Buyers who do nothing on the market-based side end up with a higher market-based figure than location-based — which is the intended signal of the dual-reporting architecture.

The second row is the matched-and-retired case. 1,000 MWh of in-year GB-vintage REGOs retired against 1,000 MWh of UK consumption brings the market-based figure to zero. Both quality criteria 5 (geography) and 8 (vintage) are satisfied. The location-based figure stays at 177 tCO₂e regardless.

The third row illustrates a geographic mismatch: US RECs retired against UK consumption fail criterion 5 (the certificates are not from the same market boundary as the consumption). Under GHG Protocol Scope 2 Guidance, those RECs cannot back the market-based claim and the residual mix applies as if no EAC had been retired. This is the most common cross-border error in multinational Scope 2 inventories — purchasing the cheapest available EACs globally and retiring them against consumption in geographies where they are not eligible.

Five Compliance Traps Practitioners Walk Into

The GHG Protocol Scope 2 arithmetic is unambiguous on paper. The traps below are the recurring places where compliant arithmetic produces a non-compliant disclosure — usually because a quality criterion was missed, a parallel disclosure framework imposes a stricter test, or the wording around the figure misrepresents what was calculated.

1. Treating the market-based figure as the only Scope 2 number that matters. The GHG Protocol Scope 2 Guidance requires both location-based and market-based figures to be reported, every year. A disclosure that quotes only the market-based figure (zero, or near zero, because EACs are retired) without alongside-it presentation of the location-based figure is technically non-compliant. Verifiers under ISO 14064-3 flag this. The fix is procedural — both figures, side by side, in the inventory table and in the narrative summary.
2. Vintage mismatch: retiring a 2023 EAC against 2024 consumption. Quality criterion 8 requires the EAC’s generation date to be no more than 21 months from the reporting period — and the working norm is same-reporting-year. A reporter who buys cheap legacy-vintage REGOs at year-end and retires them against current-year consumption fails the criterion in practice if the generation date is outside the same calendar year. Always verify the vintage date on the registry record before retirement.
3. Geographic mismatch: US RECs retired against EU consumption. Quality criterion 5 requires the certificate to be issued within the same market boundary as the consumption. The GHG Protocol’s working interpretation is that REC, GO, REGO, and I-REC markets are separate boundaries — RECs cannot back European consumption claims, GOs cannot back US claims, REGOs cannot back continental EU claims (and vice versa post-Brexit), and an I-REC issued in country X cannot generally back consumption in country Y outside an explicit cross-border AIB-style equivalence. The most common cross-border error in multinational inventories is procurement-cost-led: buying the cheapest available EACs globally and retiring them against operations on a different continent.
4. Assuming EACs cover Scope 3 Category 3 (upstream T&D losses). EAC retirement zeroes the market-based view of Scope 2 — direct purchased electricity. Transmission and distribution losses from grid imports flow through Scope 3 Category 3 under the Scope 3 Standard, and are calculated on a separate basis (T&D loss factor × consumption × residual or grid factor). Retiring EACs against consumption does not automatically zero out the Cat 3 T&D contribution; that requires a separate accounting decision, typically applying the same market-based factor to the loss MWh — which the GHG Protocol Scope 3 Standard permits but does not mandate.
5. Letting a “100% renewable” marketing claim front-run the underlying disclosure. A market-based figure of zero is not the same as 100% renewable supply. An unbundled REGO retirement against a fossil-heavy electricity contract produces a zero market-based figure but the consumed power was the GB grid mix in real time — about 60% non-renewable in many half-hour settlement periods. The marketing claim that follows (“we run on 100% renewables”) is the part that draws regulator and consumer-protection attention, even when the underlying arithmetic is GHG-Protocol-compliant. The accurate phrasing is “our market-based Scope 2 emissions are zero” — not “we are 100% renewable.”

EACs in CSRD/ESRS E1, SBTi, and CDP Disclosures

GHG Protocol provides the arithmetic. CSRD/ESRS E1, SBTi, and CDP each layer additional disclosure requirements on top — and each treats EACs slightly differently.

CSRD / ESRS E1 — energy and Scope 2 disclosure

ESRS E1-5 (energy consumption) and ESRS E1-6 (gross emissions, dual-reported by scope) require the dual-reporting structure end-to-end: both location-based and market-based Scope 2, both broken down by category, both with the methodology disclosed. ESRS E1-7 (financial materiality of climate-related transition plans) increasingly requires disclosure of the type of contractual instrument used (PPA, bundled EAC, unbundled EAC) and the geographic source. A CSRD-reporting entity that retires unbundled EACs without disclosing bundling status is now exposed to ESRS E1-7 findings even where the E1-6 arithmetic is compliant.

SBTi — Corporate Net-Zero Standard quality hierarchy

The SBTi Corporate Net-Zero Standard v1.1 applies a quality hierarchy when assessing renewable-electricity progress against a 100% RE target:

1. On-site / direct generation — own renewable assets, no grid intermediary.
2. PPAs (bundled) — long-term contractual purchase of both electricity and attribute from the same generator.
3. Bundled EACs from the same supplier — green tariffs where the supplier sources and retires EACs against the buyer’s consumption.
4. Unbundled EACs — accepted, but with greater scrutiny on additionality and vintage; SBTi has signalled continued review through its 2023 Scope 2 position paper and subsequent technical notes.

SBTi does not currently reject any of these as ineligible, but submissions where the renewable-electricity claim leans heavily on unbundled EACs from low-vintage, oversupplied markets (the GB REGO market through 2023–2025 being the canonical example) face greater scrutiny on the additionality test during technical validation.

CDP — Climate Change questionnaire C8 (Scope 2)

CDP’s Climate Change questionnaire collects EAC data through Module C8 (Energy). Reporters disclose the volume of EACs retired by instrument type, source country, and vintage, alongside a separate question on whether contractual instruments meet GHG Protocol Scope 2 Guidance quality criteria. CDP scoring rewards disclosure quality — fully populated EAC data with vintage and geography typically scores higher than aggregated “100% renewable” claims unsupported by underlying instrument detail. From CDP’s 2023 questionnaire onwards, AR6 GWP-100 is the required basis for all underlying CO₂e arithmetic flowing into the C8 totals.

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