Does the purchase of voluntary renewable energy certificates lead to emission reductions? A review of studies quantifying the impact

The conditions under which companies can report their use of renewable electricity are currently under scrutiny for their effectiveness in reducing overall emissions. We contribute to the debate by reviewing the eight techno-economic modelling studies that quantify their impact on emissions. For the five energy system modelling studies that provide their output data, we use a set of synthesis indicators to compare the extent to which different modelled REC purchase conditions resulted in additional renewable energy generation (REG) and emission reductions relative to a counterfactual without a REC market. Our results suggest that assuming the implementation of recent government policies, annual volumetric and emissions matching do not lead to significant emission reductions relative to a counterfactual without a REC market. This is because investments are almost exclusively made in the cheapest available renewable energy resource, thereby cannibalising market-driven projects that would also have been built without a REC market. On the other hand, we find that hourly matching (with PPAs involving local and new RE generators) leads to significant reductions in system emissions. We discuss the sensitivity of individual study results to modelling and policy assumptions and highlight potential pitfalls in study design. Our findings can inform ongoing discussions about how companies should account for their electricity-related emissions and the conditions under which renewable fuels are produced.