Navigating the Japanese Energy Attribute Certificate (EAC) market is arguably more complex than many other markets where I-REC(E) is available, due to the presence of multiple certificate systems: Green Electricity Certificates (GEC), J-Credits, Non-Fossil Certificates (NFC), and I-REC(E). There are clear restrictions on the issuance and use of I-REC(E) to prevent attributes from being counted multiple times, and this article explains these restrictions and the role of the updated labels in the I-REC(E) Registry.
It is worth noting that there has been a noticeable increase in I-REC(E) issuance in Japan. From only a few thousand I-REC(E) prior to 2025, to over 60,000 I-REC(E) in 2025 alone. The vast majority of that volume is not affected by any change to the labels, because the certificates were issued based on volumes that fall outside the restrictions. However, emerging requirements from a possible GHGP update and the overall growth of I-REC(E) in Japan require a clear labelling framework to navigate the ongoing complexities.
Updated Labels
Local Good, the Accredited Issuer in Japan, determines the eligibility of devices and has the ability to tag certain I-REC(E) with labels to indicate that further restrictions apply. These restrictions are based upon two main questions
- Is the device receiving certificates from one of the national systems, and if so, which one?
- Is there any form of bilateral contract between the generator and a retailer, and if so, does the contract specify the delivery of electricity with or without the underlying attributes?
The answers to these questions determine the eligibility of these devices for I-REC(E) issuance and use. Whereas some devices can freely request I-REC(E) issuance, others will only be able to request issuance of I-REC(E) with a specific label attached. The five possible situations are as follows, in order of frequency in historical issuance.
- No overlap with a national certificate system, and Attributes are unbundled
Production plants in this category can freely request I-REC(E) issuance with no redemption restrictions.
A separation between electricity and attributes can occur in two distinct ways. First, there was no bilateral agreement between a generation plant and a retailer or balancing group, but the generation plant sold directly to the Japan Electric Power Exchange (JEPX), for example. Second, there was a contract, but the agreement specifies the separation.
- Label 1 – NFC issued, Attributes bundled with Electricity -> use with matched attributes for NFC and electricity
If there is a bilateral agreement between the generation plant and the retailer or a balancing group that does not specify the separation between the electricity and the attributes, an I-REC(E) may be issued for the production of this plant, but the I-REC(E) will have to be redeemed for the same beneficiary as the NFC, and this beneficiary must be the offtaker of the bilateral agreement.
- Label 2 – No NFC Issued, Attributes bundled with Electricity -> use with matched attributes for electricity
If the bilateral agreement between the generation plant and the retailer or a balancing group does not specify the separation of attributes, the market player must ensure that the I-REC(E) is redeemed against the offtaker of the agreement.
- Label 3 – NFC issued, and Attributes unbundled from Electricity -> use with matched attributes for NFC
If this label is attached to an I-REC(E), the Participant can freely choose the beneficiary of the attributes, but must ensure that the NFC and the I-REC(E) are redeemed against the same beneficiary.
- Overlap with J-Credits and GEC
If a device in Japan receives J-Credits or GECs, the device is ineligible for I-REC(E) issuance.
More information
We look forward to seeing the growing Japanese I-REC(E) market evolve. If any questions arise from this item or if any other aspect of the Japanese market requires further explanation, please feel free to reach out to Local Good, the Accredited Issuer in the country, or to the I-TRACK Foundation Secretariat through secretariat@trackingstandard.org.