With the RECs market continuing to grow and develop around the world, the International REC Standard Foundation was pleased to sit down with Merve Güngör, Coordinator, EKOenergy ecolabel to discuss the recent REC market expansions, explore the impacts of growing interests in REC markets, and gain insight into the organizational developments of EKOenergy.
EKOenergy is an internationally recognized non-profit organization eco-label that is used by individuals, as well as corporations, to communicate their commitment to renewable energy. EKOenergy is dedicated to promoting the use of renewable energy. Reliable tracking is an important element for the EKOenergy ecolabel and most recently, the I-REC Standard and Goal Number Seven (GNS) as the approved issuer of I-RECs, have enabled energy consumers to choose renewable electricity with the EKOenergy label also in Russia.
Congratulations on receiving the European Citizen’s Prize. What does the prize entail and how does it impact EKOenergy?
Thank you! We are happy to see that our ecolabel has received recognition from the EU for all the work we do to strengthen the role of environmentally conscious consumers. The European Citizen’s Prize is awarded by the European Parliament since 2008 to exceptional achievements in promoting mutual understanding and interaction between citizens or in facilitating cross-border or transnational cooperation in the EU.
This prize is also a recognition for all the companies, households and public authorities that use EKOenergy-labelled energy in many countries. It is an extra motivation for us to continue promoting sustainability communication and renewable energy use. Every opportunity for visibility helps us advocate for our cause: Climate action. We will keep on guiding consumers to go the extra mile with their renewable energy purchases!
Tell us about how EKOenergy got started and where RECs fit into your broader business.
EKOenergy is an ecolabel for renewable energy only (not for carbon offsets). The ecolabel works in the existing market mechanisms, so our idea is not to reinvent the wheel but to highlight the most eco-friendly options available in the given market circumstances, which can be used right now. This makes RECs a fundamental element of our work.
The avoidance of double counting is an important element for renewable energy communication, and thus reliable tracking is one of the aspects addressed in the EKOenergy criteria. So, when speaking about this to stakeholders in emerging markets, we liken the I-RECs to an ID or a passport, and the ecolabel to a diploma or a similar merit-based recognition. For official recognition, having an ID card or some sort of identification certificate is necessary. This important role in the electricity market is fulfilled by an Energy Attribute Certificate, also known as a REC.
When EKOenergy was launched as an international ecolabel in 2013, tracking of renewable electricity (the book and claim systems) was still a new phenomenon. Initiated by the Finnish Association for Nature Conservation in the 1990s, the purpose of the ecolabel was to function as a communication tool to encourage correct green claims companies to make regarding their electricity use. This has remained the same: EKOenergy works to support consumers’ sustainability claims and amplifies their leadership efforts regarding renewable energy use. Our efforts have expanded from a pan-European perspective to the global arena, because of the increasing demand and the urgency for 100% renewable-powered operations.
The ecolabel adds an extra layer to RECs, regardless of the method of sourcing the consumer uses. As a result of the consultations with many market players, environmental NGOs, and other interesting initiatives, we have refined what this extra layer includes (EKOenergy criteria).
We also have a recent video about EKOenergy’s history, you can watch it to learn more about our roots: https://www.youtube.com/watch?v=Nm08U3GnU3I
Why should buyers consider purchasing EKOenergy; what is the added benefit?
The EKOenergy ecolabel brings many extra benefits and helps amplify the inherent benefits of choosing renewables. We can group the reasons for using EKOenergy under 4 categories: Climate and nature, additionality and leadership, communication, and international recognition.
With climate and nature, EKOenergy-labelled energy comes from installations that fulfill EKOenergy’s sustainability criteria. These are based on input from experts from many countries and approved by a network of non-profit environmental organizations. The EKOenergy criteria guarantee minimal impact on the local environment. In other words, EKOenergy only approves power plants that have minimal damage to the local ecosystem. This ensures the consumers that their energy comes from the most environmentally friendly sources available.
Fora additionality and leadership, using EKOenergy, in addition to helping fight climate change, also helps buyers to contribute to biodiversity protection easily. This additional, positive impact is achieved by a contribution of 0.10 € per MWh of EKOenergy-labelled energy consumption. These contributions are collected in our Climate Fund and we annually finance new, clean energy projects in developing countries to combat energy poverty. These projects address several Sustainable Development Goals (Global Goals).
In terms of communication, the EKOenergy label is internationally recognized and used by a growing number of companies from various sectors. Buying EKOenergy-labelled energy gives the consumers the right to use the EKOenergy logo in their communications, marketing materials, products, and facilities. The ecolabel is a visually appealing tool for communication and advertisement.
And for international recognition, the ecolabel is available in over 40 countries and is expanding every year. EKOenergy’s criteria are international, and this makes it easier for multinationals to cover their consumption in several continents with EKOenergy-labelled renewables. We also notice smaller companies seeing the benefit of joining an international movement with their choice of EKOenergy-labelled renewable energy.
EKOenergy is supported by leading standards and NGOs; the GHG Protocol Scope 2 Guidance, as well as CDP’s guidelines, refer to EKOenergy as a “good way for companies to do more with their renewable energy purchase.”
EKOenergy-labeled electricity also fulfills LEED’s Green Power criteria. This is explicitly mentioned in LEED’s European texts and is increasingly true elsewhere too.
A large part of working with RECs is making connections with local stakeholders including sellers, buyers, and governments. What sort of developments have you seen among these stakeholders recently?
We are happy to see the increasing dynamism among the REC market players. When we launched the ecolabel, this level of involvement from governments and local authorities, or the success of initiatives such as the RE100 was unimaginable. Buyers are putting more sophisticated demands in the market, giving the signals for more diversified renewable energy products; and the sellers and other service providers come up with solutions to meet their needs.
We see that gradually, local authorities, utilities, and closed federations have become more open-minded. They receive feedback and are becoming willing to apply these. Of course, this is observable thanks to buyers voicing their demands louder and clearer.
We also see trading platforms and various functions popping up such as aggregation and PPA facilitation. These are all exciting developments we are happy to follow.
There are for-profit products launched by companies themselves, we find it important that these products are not confused with an independent, third-party ecolabel such as EKOenergy. We have written about this phenomenon on our website to explain what ecolabels bring to the renewable energy market.
How has the interest in and the RECs market developed over the last five years? Has there been a significant increase in a particular part of the world?
With the launch of the Greenhouse Gas Protocol and the start of the RE100 in 2015, the interest in RECs has for sure gained momentum. And I think it would be fair to say that most of the market growth happened in the last five years – we are talking about a very fresh market. The I-REC for electricity (I-REC(E)) is now available in over 40 countries and several national tracking systems are being set up in different parts of the world.
In Europe or East Asia, no one was talking about PPAs in the way they are exploring it now. I have also seen that it is getting easier to explain what a tracking system is and why it is necessary, compared to 2016 when I started working at EKOenergy. The demand and awareness have certainly grown a lot. In 2018, the RE-Source platform launched a buyers’ toolkit where they also highlighted the role of GOs (European RECs) in the 14 methods of renewable energy sourcing they analyzed.
Speaking of a significant increase, in China, Southeast Asia, Latin America, and Russia, the market simply began within the last 5 years. EKOenergy has been focusing on Russia particularly, the launch of I-RECs for electricity (I-REC(E)) in 2020 was a long-awaited development. For us, the first EKOenergy-labelled sales in China in 2015 certainly kickstarted a series of actions for internationalization, followed by the first EKOenergy sales in Mexico, South Africa, and others.
How do you see the next 5 years of REC developments in different regions of the world?
It’s not easy to predict developments in such a fast-growing market. What was unimaginable and only an “unfeasible wish” five years ago is a reality now! Given the climate crisis we are in, a rapid shift from fossil fuels to renewable energy is necessary. RECs play an important role in helping everyone get on board, by serving as a basis for many opportunities that enable individuals and companies to join the energy transition.
I can say that we hope to see a higher number of local buyers engaging in the market and using renewable energy in I-REC markets. EKOenergy is willing to help them proudly communicate about their choice of renewable energy!
In Europe, we wish to see the tracking systems being used for renewable gas and heat & cooling in addition to renewable electricity. Many outsides of Europe imagine renewable energy usage is very high in the EU, but currently, Europe is still far from where it could be. Hopefully, RE use will increase dramatically in Europe in the next five years.
Outside of Europe, I expect to see the local authorities, those who have launched national RECs, follow the developments in the international arena to learn from the lessons, and keep up with their standard. I also hope to see the sophistication of utilities in many parts of the world. If they follow the developments in the market, their involvement can make crucial services much more easily available for many.
Recently we heard about the interest in tracking volumes lower than 1 MWh and there are several initiatives working to enable claims made on smaller volumes (transaction-based, product-based, purchase-based, etc). It would be good to see this made available too.
What buy-side sectors are you seeing the most activity from (for example, tech, clothing, food, and beverage, etc.) and what criteria do buyers have when buying RECs now (technology, long-term contracts/OTC, proximity, use of labels, etc)?
Buyers’ preferences vary greatly, and this is a very good thing. As the buyers’ demands become more sophisticated, the market becomes more complex, in a way that enables growth. You can think of it as going to a restaurant and asking for “food” vs. asking for a particular dish, cooked in a certain way, with a specific sauce to your liking. Also, think of the variety of opinions about what is good to eat and what is not! Some people would insist on a specific dish being the most delicious or the most representative to a certain area. Our message is, of course, that the EKOenergy ecolabel makes environmental sustainability and additional positive impact easy.
Several years ago, Pedro Faria from CDP has said “Renewable energy is becoming the norm” and I do not know how many times I’ve quoted it! Product differentiation and sophistication of market participants is a clear sign of dynamism.
We have seen that the IT and telecommunication industry has been quick to take action but slow to communicate. Retail clothing is a tricky sector since the production is usually quite dispersed, especially for luxury brands. There has been a fast increase of EKOenergy users among companies producing beverages, many have put our logo on their cans and bottles.
There are advantages and disadvantages to every sector given the different nature of consumption patterns and the value chain. There are solutions already available or are being developed now! We do not have time to wait and EKOenergy recommends being part of the solution instead of the problem.
We have worked with different industries providing support and feedback about the best actions to take for various industries. It’s a great brain exercise for us, as an independent non-profit, to consider solutions with the buyers and offer our input.
EKOenergy regularly launches outreach campaigns and now our focus is on companies producing beauty and care products. The cosmetics industry has increased awareness regarding the use of renewable energy. By using the existing EKOenergy users as examples, we are hoping to contribute to this further.
Some sectors (especially carbon-intensive heavy industry) may be slow to join the momentum but there is certainly interest. No one is too small to make a difference or too large to make the first move! We need all on board.
Are there any unaddressed challenges you see in the market at this moment?
We want less talk and more action. Of course, it is natural for the buyers to explore available options and “shop around,” however, we often see theoretical discussions and long, inefficient internal processes hindering the switch to 100% renewables. There are reliable and available options for those who really want to act and are willing to pave the way for others.
The concept of “market boundaries” is also a common concern faced by multinationals recently. This is the “decade of delivery” as the UN coined, and we do not have time to wait for the ideal methods to come into existence out of thin air. We have published an article on our website about making unique claims and written another one to underline the 3 things to pay attention to when sourcing renewables in emerging markets.
Are there any new developments or plans that we can expect from EKOenergy?
EKOenergy was mentioned as a good SDG practice in a recent publication by the United Nations Department of Economic and Social Affairs (UN DESA).
We welcomed the first EKOenergy consumers in Ecuador, where Quantica, a solar panel installer, became an EKOenergy licensee to offer EKOenergy-labelled energy from those installations. This is done in combination with the maintenance contracts of those on-site installations. And recently, RWE Renewables launched an EKOenergy-labelled PPA product.
Our ecolabel was launched as an ecolabel for renewable electricity, but now we cover renewable gas (biomethane) and since last year renewable heat and cold too. In 2020, our total contribution to new renewable energy projects has exceeded 1,200,000 euros! The number of licensed EKOenergy sellers has been increasing, and currently, we have over 80 sellers who can offer EKOenergy-labelled energy to their clients. We are willing to grow this number even further.
Are there any other market developments you think readers should be aware of?
New ways of renewable energy sourcing are being developed and our ecolabel becomes available for more and more consumers. EKOenergy has a very specific role in this fast-growing market: We follow market developments from the perspective of amplifying climate action, and we encourage every positive step.
I would say the urgency of acting is what the readers should be aware of first!
We noticed that you are a supporting association of the REC Market Meeting and assist the organization of the C-Stream sessions, what does that role entail?
EKOenergy has benefitted from being part of the growing REC Market Meeting community since the very beginning. We are proud to be a supporting association this year too, it has been a rewarding experience to witness the growth and success of this conference.
The C-stream sessions are introductory level sessions aiming at explaining the basic concepts of voluntary renewable energy markets. These sessions focus on common questions and concerns especially the new entrants to the market may face. The expert speakers in these panels will talk about basic concepts and address questions frequently asked. Since EKOenergy is regularly in touch with both buyers and sellers for almost a decade now, we are offering help to RECS International with the session set up, speaker invitations and making sure that the common concerns get addressed.
How can interested parties get in contact with EKOenergy?
You can reach us at email@example.com or follow us on our social media. We’re active on Facebook, Youtube, Linkedin, Twitter, Instagram, and Xing. Every follower or reaction to our posts helps us reach more people, please join us there!