Environmental Market Rankings 2023-2024

A bullish year for EACs across the globe

Energy Attributable Certificates (EACs) demand remained bullish across North America, Asia Pacific (APAC) and Europe throughout 2023, despite continued volatility in the market, writes Joe Walsh.

A surge in demand globally in 2023 has been driven by two main forces according to David Ceder, head of Guarantees of Origin (GOs) at STX.

Those are "compliance requirements mandating the use of renewable energy and the growing voluntary market where companies use EACs to demonstrate their commitment to sustainability".

EACs are a market-based instrument that certifies the bearer owns one megawatt-hour (MWh) of electricity generated from a renewable energy resource.

David CederOnce the power provider has fed the energy into the grid, the EAC can then be sold on the open market as an energy commodity. Many regions implement both compliance and voluntary schemes.

Europe is where he has seen "the most volatile pricing for EACs, particularly GOs, due to supply imbalances, rising demand, geopolitical uncertainties and policy changes," Ceder argues. He expects this to continue into 2024.

A general shift towards renewable energy due to energy security concerns across the continent, in light of Russia's invasion of Ukraine, is set to continue, according to Ceder, citing the record-breaking 107GW of renewable energy capacity that was added to the continent's grid in 2023.

He believes this will bolster the EAC market in two ways: Firstly, by increasing renewable energy supply, which means more EACs will be available for purchase. Secondly, he expects this growth to strengthen the long-term outlook for renewable energy, which in turn will boost confidence and drive investment in EACs in the long run.

Looking ahead "the focus on new capacity driven by the EU's ambitious renewable energy targets and the REPowerEU plan [the EU's plan to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition] is expected to significantly increase the availability of projects eligible for EAC issuance in the coming years.

STX won Best trading company, EACs – Europe, North America, APAC and Renewable Natural Gas (RNG), and Best exchange/clearing house, EACs – Europe and North America as well as Best advisory, EACs – Europe at the Environmental Market Rankings 2023-24.

Jonathan BurnstonJonathan Burnston, managing partner at Karbone, which won Best broker, EACs – Europe, North America, and Best broker, RNG and Renewable Identity Numbers (RINS) agrees, adding "there has been some very volatile activity in [the UK's] Renewable Energy Guarantees of Origin (REGOs)". Karbone was also named Best advisory, EACs – North America.

This volatility is attributed to April 2023 to 2024 being the first disclosure period in the UK, whereby licensed electricity suppliers disclose to customers the fuel mix used to generate the electricity supplied.

Furthermore, following Brexit and the end of the transition period in 2020, EU laws relating to the promotion of the use of energy from renewable sources and energy efficiency stopped applying to the UK.

The EU Commission ruled that without a trade agreement being reached UK REGOs would no longer be recognised in the EU. This came into effect in 2021. The UK initially continued to accept GOs from EU states, however, this was reviewed in 2022 and the decision was made to no longer recognise EU GOs from April 2023.

These GO imports from Europe previously made up 20% to 30% of net UK demand. "It's natural then that volatility should emerge, with that disappearing," concludes Burnston.

Before this, UK REGOs were priced at roughly £8 ($10) per MWh in 2021. They launched upwards across 2022 and tripled in 2023, exceeding £25 per MWh in October of that year before settling at £15 or £16. Most recently they are back below £10. As for Europe's GOs, they moved between a minimum of €3 ($3.25) and a maximum of €8.50 during 2023.

Asia Pacific

For the Asia Pacific (APAC) region, demand for voluntary International Renewable Energy Certificates (IRECs) has continued to increase, but oversupply in most markets continues and prices have therefore mostly been trending lower.

This is "especially [true] in China and India due to good availability of supply, so prices have come down," explained STX's Ceder.

However, "there have been some exceptions in niche markets and technologies, like solar in Singapore and Malaysia where prices have trended mostly up," he added.

In general, STX has observed a continued growth in renewables assets in most APAC countries, "however there are cases of some restrictions towards those assets being registered for issuance of EACs," cautioned Ceder.

Prices varied across different markets in the region. In India they reached a high of $1.60 and a low of $1.25, in China they ranged between $0.6 and $0.85. Finally, in Malaysia, they hit a far greater high of $5.25, with a low of $3.

North America

In North America, despite regional variation, there was an upward trend in pricing for renewable energy certificates (RECs) driven by compliance requirements but primarily by increasing sustainability commitments.

California REC prices peaked at $77/MWh in 2023, in a market where the fine for not being compliant is $50 per REC.

"This is compelling, this is not normal, this has never happened before," argued Burnston about the peak prices of RECs exceeding the fine for not being REC compliant. He explained the high prices are due to businesses being concerned about their image.

"California is a place that cares about the brand. Simply paying the fine, does not make you compliant. You do not get a rubber stamp that says you are compliant. You're not further penalised, monetarily, but it is publicly known that you are not in compliance...And that's important for load servers because they don't want that smudge on their record, they will lose customers in a place that cares about its environmental footprint."

Other regions of North America have seen a similar trend towards higher prices. The Pennsylvania-New Jersey-Maryland (PJM) Interconnection, the electric transmission system for many states in the Eastern US, is one of those.

"In the PJM region...pricing is meeting and at times exceeding alternative compliance payment levels," said Burnston.

Current pricing in the region is $41.75/MWh and throughout PJM the price varied between $45 and $50.

"The fundamentals yet again, are bullish. You've got very trader-friendly, market-friendly products and fundamentals that are supportive. That will artificially preserve price integrity, and drive things upward above and beyond where it might normally settle," added Burnston.

Voluntary markets

Ceder at STX sees voluntary markets as equally "crucial for businesses to fulfil regulatory mandates for renewable energy consumption. Additionally, companies are increasingly utilising EACs [on a voluntary basis] to achieve their sustainability goals and enhance their environmental credentials."

However, in direct contradiction to the compliance markets, the short-term dynamics of the voluntary market in the US have essentially crashed, according to Burnston.

In the US, the Green-e programme is the most widely accepted voluntary standard. It witnessed a price peak in the summer of 2021 at around $7.

"Those holding these RECs then suddenly thought 'why am I holding these at $7?', they reacted, and the market crashed. This year, for the first time in four years they are now below $1 for front of the curve vintages," said Burnston.

The long-term outlook is a lot more promising, partly due to the interplay between voluntary REC markets and regulation, he says.

"In the US, there is a federal regulatory support mechanism in the Inflation Reduction Act (IRA). To get maximum accreditation for hydrogen, you need renewable electricity to create the hydrogen. So, although these are voluntary RECs, they almost secretly have a potential long-term compliance underpinning. So, from a price perspective, the ten-year curve is like $4, maybe even $5. We've seen price points, on a long enough time frame, at $7, or even $8."

The IRA is a US policy aimed at reducing inflation through, among other things, investing in domestic and clean energy. It was passed into law in 2022 and, last year, Burnston described it as a "game changer for project development and finance". Aspects of the law include the creation of a green bank with $27 billion and $663 billion in tax incentives related to climate change and energy security.

Burnston remains convinced that it is a game changer, but that now, a year on, we're starting to see some of its effects. "[Over the last year] the IRA went from being more theoretical to having deals being practically built with tax accreditation created by the IRA," he said.

He argues that not only are fundamental players, such as big data companies, industrial consumer products, or manufacturing companies seeking to decarbonise their footprint – which would have a bullish impact on the market by itself – but "you can now combine that with a more authoritative, more stable demand for the burgeoning hydrogen sector, which is largely an IRA story".

The move towards mandatory climate disclosure policies alongside financial disclosure has the potential to bolster markets, believes Ceder at STX. In the EU, the Corporate Sustainability Reporting Directive (CSRD), came into force at the start of this year.

This policy mandates total and Scope 2 greenhouse gas emissions to be disclosed by listed companies. Ceder argues "this is an active way for companies to support renewable electricity generation by sending a market signal".

The US, Brazil, China, UK, Singapore, and Australia have all announced plans for similar policies for mandatory climate disclosures alongside financial disclosures.


A new category for this year's Environmental Market Rankings, renewable natural gas (RNG), is "one of the most exciting things happening in the US," according to Karbone's Burnston. "It's bullish. It's generally an expensive substitute, but it's a drop-in substitute, for gas."

RNG is a biomethane that is produced from the breakdown of organic matter from sources such as landfills, animal manure, food scraps, and wastewater sludge. As with EACs, RNG certificates enable companies to make renewable fuel claims and integrate clean energy into their fuel mix.

As a gas replacement, RNG has far greater potential than hydrogen due to that ease of substitution, according to Burnston.

"Hydrogen doesn't do what RNG does; both in terms of being able to immediately plug into the existing system. You need new equipment, new infrastructure, new pipes, new burners, etc. On top of that it's less efficient in terms of its energy density and other chemical properties versus methane," he said.

In addition, since Russia's invasion of Ukraine two years ago, the US has gone from sending the majority of its liquefied natural gas (LNG) to Asia to sending more than 90% to Europe.

"In developed economies, and then soon enough across the world, there is a huge incentive to capture biogenic methane and use it in lieu of fracking or conventional natural gas. I think that trend is supported by many things, but a key one is natural gas dynamics in Europe and that's a Russia story. 2022 forever changed the way that Europe will source its energy," argued Burnston.

Loius RedshawMeanwhile this year, the Science Based Targets initiative (SBTi) has launched a call for evidence on the effectiveness of RNG certificates in corporates' climate targets. STX's Ceder predicts "some clarity on this in the months to come and this is expected to have a significant impact on the RNG markets in the future".

Louis Redshaw, CEO of Redshaw Advisors, which won Best advisory/consultancy for Renewable Natural Gas (RNG), agrees that the "biomethane market is expanding," in Europe.

The EU aims to reach an annual biomethane production of 350 TWh by 2030, so Redshaw "expects supporting legislation to supplement the companies willing to pay a premium for renewable gas voluntarily".

In terms of prices, the voluntary renewable gas guarantees of origin (RGGOs) are pricing above their EU ETS compliance value, he says.

"This means that companies are willing to pay more if they can capture both value chains."

Ultimately the trend will continue upwards as "biogas is one of the few ways that companies can achieve net zero without electrifying, so it will remain in demand," concluded Redshaw.


Randy LackIn the US, Renewable Identification Numbers (RINs) are used to track the production and use of renewable fuel by the Environmental Protection Agency (EPA) in order to implement the government's Renewable Fuel Standard (RFS) programme.

RINs are generated by renewable fuel producers or importers and are bought and sold 'attached' to the renewable fuel until the fuel is purchased by an 'obligated party' – a refiner or importer of gasoline or diesel fuel – or blended with a petroleum-based transportation fuel.

The RIN is then 'separated' from the fuel and may thereafter be independently bought or sold until it is retired to meet an obligated party's renewable volume obligation (RVO).

The EPA has recently set the RVO schedule for three years (2023-25) for the first time, as part of plans to strengthen and expand the RFS. They had previously been set annually.

"The volumes were disappointing to the renewable diesel and ethanol markets [in 2023]," says Randy Lack, head of portfolio management at Anew Climate, which won Best advisory/consultancy and Best trading company – RINs.

In California, the Low Carbon Fuel Market programme is going through extensive revisions, which Lack expects to result in a fairly dramatic decrease in the overall supply of RINs.

"We have seen depressed pricing, reducing from $200 per tonne a couple of years ago to a market that has been hovering around $60 per tonne in recent months due to the oversupply created by primarily renewable diesel supply. We expect that following the implementation of the rules, the surplus will begin to whittle away and this will result in a stronger market," he added.

Looking ahead to an election year in the US, Lack warns a President Trump win could see little to no advancement with RFS policies.

The EPA had previously proposed new regulations governing the generation of qualifying renewable electricity made from renewable biomass that is used for transportation fuel in electric vehicles (EVs).

"If President Biden is awarded a second term, we would expect to see advancement of new pathways under the programme, including a potential crediting for electric vehicles when fuelled with RNG, which has been referred to as the eRIN programme," he said.

This new component of the RFS programme would tie electricity generation from renewable biomass into the programme for the first time.