Renewable Energy Certification Markets: A Global Surge in Growth and Challenges

The global markets for Renewable Energy Certificates (RECs) is experiencing robust growth. Valued at USD 13.65 billion in 2021, it is projected to grow to approximately US $111 billion by 2030, with a CAGR of approximately 27.22% between 2022 and 2030.

Renewable Energy Certification Markets: A Global Surge in Growth and Challenges

In the United States, voluntary RECs are gaining momentum over compliance RECs, driven by corporate sustainability objectives and tax incentives like the Inflation Reduction Act of 2022. This trend is particularly evident in the data centre sector, where companies are aggressively pursuing green Power Purchase Agreements (PPAs).

Mexico's REC market remains stable, with regulators working to attract smaller generators through standard updates and fee reductions. This initiative is expected to boost International Renewable Energy Certificates (I-RECs) generation, especially in sectors like retail and manufacturing, keen on certifying their renewable energy consumption.

The Asia-Pacific region, especially India, is witnessing a surge in REC trading volumes. With record-breaking transactions of 1.52 million RECs in January 2024 on the Indian Energy Exchange (IEX), India's commitment to renewable energy is clear, aligning with its growing energy needs

South America is seeing a notable increase in renewable energy projects, with significant investments aimed at supporting sustainable development. For example, Equinor's inauguration of a solar plant in Brazil represents a step towards achieving the country's renewable energy goals.

The Middle East is transitioning towards renewables, with the UAE leading efforts to decarbonise and enhance energy resilience. Collaborations and investments in solar power are also setting benchmarks for sustainability in the region.

However, fluctuations in oil prices, particularly in the Middle East, could cause difficulties in the transition to clean energy. Despite this, the persistence in renewable energy investments, especially in mature technologies like solar PV and onshore wind, demonstrates a commitment to overcoming these challenges.

China's renewable energy sector, especially in PV technology, is making significant strides. China is firmly on the path to achieving its carbon neutrality goals by 2060. However, challenges such as curtailment, land use policy coordination, and infrastructure upgrades remain.

The global renewable energy certificate market is in a state of rapid expansion, driven by both regulatory mandates and voluntary corporate commitments.


Annual Review 2022