Corporate renewable energy procurement has surged, with over 400 GW of power purchase agreements (PPAs) signed globally. But not all procurement instruments deliver the same climate impact, and the accounting rules matter enormously for GHG reporting credibility.
Physical PPAs (where the company directly purchases electricity from a renewable generator) deliver the strongest claim. Virtual PPAs (financial contracts that support new renewable capacity) are widely accepted but involve no physical electricity delivery. Renewable Energy Certificates (RECs) represent the environmental attributes of generation and can be purchased separately.
The GHG Protocol Scope 2 guidance allows both location-based (average grid intensity) and market-based (contractual instruments) accounting. Under market-based accounting, RECs, guarantees of origin, and PPAs can all reduce reported Scope 2 emissions. But quality varies: RECs from existing large hydro projects do nothing to add new renewable capacity.
RSustain helps clients design renewable energy procurement strategies that maximise both climate impact and reporting credibility. We evaluate available instruments, model financial implications, and ensure that claims are defensible under GHG Protocol rules.
The gold standard remains additionality: does your procurement directly cause new renewable capacity to be built? Companies that can demonstrate additionality will have the strongest defence against greenwashing accusations.