What are I-REC and Carbon Credits? How Are They Produced and Purchased?

As demand for renewable energy rises, businesses and individuals seek ways to reduce their environmental impact. Two prominent mechanisms promoting renewable energy use are I-REC certificates and carbon credits.

What is I-REC and How Does it Work?

The International Renewable Energy Certificate (I-REC) is an international certification system verifying electricity generated from renewable sources. Founded in 2014 by the Netherlands-based International REC Standard Foundation, it operates in more than 45 countries.

In Turkey, one I-REC certificate represents 1 Megawatt-hour (MWh) of renewable electricity production, including details such as production date, location, technology, installation date, and plant capacity. I-REC certificates are tradable within Turkey but cannot be traded internationally. They can only be used to offset Scope 2 emissions.

Advantages of I-REC Certificates:

• Encourages renewable energy investments.

• Helps companies document their carbon footprint reductions.

• Contributes to the reduction of greenhouse gas emissions.

  
  

Disadvantages of I-REC Certificates:

• Indicates support for renewable energy but does not guarantee actual renewable electricity consumption, as grid electricity mixes sources.

• Low prices in certain regions may insufficiently incentivize investments.

• Potential risk of greenwashing.

• Transparency issues may arise in regions lacking regulation.

• I-RECs produced in Turkey are only tradable and usable within Turkey.

  
  

What are Carbon Credits?

Carbon credits represent the reduction, avoidance, or removal of greenhouse gas emissions. One carbon credit equals one metric ton of CO₂ or equivalent greenhouse gas reduction. They can be bought, sold, transferred, or traded.

Unlike I-RECs, carbon credits are not limited to renewable energy projects but also include forest protection, energy efficiency, and sustainable land use, and can offset Scope 1, 2, and 3 emissions.

Advantages of Carbon Credits:

• Essential tool for combating climate change.

• Protects ecosystem diversity through sustainable projects.

• Accelerates the transition to a low-carbon economy by funding carbon-saving projects.

  
  

Disadvantages of Carbon Credits:

• Potential risk of greenwashing.

• Variety in standards complicates evaluating credit effectiveness.

• Measuring the accuracy of emission reductions can be complex.

  
  

(I-REC vs. Carbon Credits Comparison Table)

For accurate renewable energy project planning and to register your projects for generating carbon credits or I-RECs, contact our team for a preliminary consultation: carbon@goldstein.com.tr