[November 24, 2023 - Washington, DC] -- EMA as a trade association represents a diverse institutional membership of on- the-ground industry practitioners delivering “real world” decarbonization solutions through the development, finance, and operation of sustainable infrastructure projects in the clean power, renewable thermal, and emission reduction sectors. Environmental Attribute Certificates (EACs), also known as Environmental Instruments or Environmental Commodities, such as Energy Attribute Certificates, Renewable Energy Certificates, Guarantees of Origin, Renewable Thermal Certificates, SAF Certificates, Carbon Allowances, Carbon Offsets, and Emission Reduction Credits, amongst others, facilitate critical primary or marginal revenue streams on top of underlying physical commodity sales that deploy new and support existing projects. Ultimately, all mitigation impact occurs at a “project level,” irrespective of whether it originates from a project finance, corporate finance, or public finance transaction. Trade of EACs enables increased collaboration amongst market participants and supports the efficient deployment of least- cost solutions.
EMA’s position is that EACs are effective accounting instruments for conveying environmental attributes and effective delivery mechanisms for performance-based incentives & revenue for decarbonization solutions, irrespective of the transaction type (e.g., unbundled vs. bundled, spot vs. forward, etc.) in which they are conveyed. A detailed look at global environmental markets, whether they be in the compliance or voluntary space, reveals that almost all programs and transactions utilize EACs. This is because there is no better alternative to: (1) embody, track, convey, claim, and report the environmental attributes associated with physical interventions that promote decarbonization, while (2) rewarding those actions with quantifiable, measurable credit. EMA has submitted 18 pieces of evidence in accordance with our memberships’ practical experience and findings in building these markets. All 8 research questions have been answered in the context of this evidence submission. While each EAC and scope of corporate emission reduction clearly has its own nuances and considerations, the overarching concept of how EACs work and can be designed, or customized, to enable targeted decarbonization solutions remains ubiquitous in practice. EACs are a proven, successful, and powerful market-based policy instrument ready to further scale climate finance and corporate action.
The EMA thanks the SBTi for its careful consideration of EACs as an effective tool to mobilize climate finance at a cost and scale necessary to achieve global net-zero ambitions in the timeframe required. EMA strongly recommends that the SBTi allow for and encourage the utilization of Environmental Attribute Certificates in the reporting and achievement of Scope 1, Scope 2, and Scope 3 corporate emission reduction strategies. Such an outcome will accelerate climate finance formation and mitigation action in line with SBTI’s Mission.
Additional documentation and evidence can be accessed below:
