Corporate climate action goes beyond green-themed “About Us” pages. Stakeholders, investors, and the general public demand evidence of measurable, audit-ready progress.
For businesses operating in Singapore, the challenge is achieving net-zero emissions in a city-state with severe land constraints and limited rooftop space for solar installations.
The answer lies in Renewable Energy Certificates (RECs).
This article serves as a comprehensive guide for Procurement and Sustainability teams on RECs and what they need to know to select the right ones that will benefit both their business and their ECG report.
Key Takeaways
- RECs allow Singaporean businesses to claim 100% renewable energy use by purchasing the “environmental attributes” of electricity, even with local land constraints.
- Procurement teams can choose between flexible Unbundled RECs or long-term Bundled RECs.
- Following the Market Boundary Rule is essential to ensure your RECs are recognised under global standards such as RE100 and SBTi.
- RECs are used specifically to zero out Scope 2 (electricity) emissions, while Carbon Credits are used to offset Scope 1 and 3 footprints.
- Adhering to the SS 673 standard protects your brand from greenwashing by providing a verified, audit-proof trail for all renewable claims.
What is a REC?
A Renewable Energy Certificate (REC) represents one megawatt-hour (MWh) of electricity generated from a renewable energy source and delivered to the power grid.
When a renewable energy facility (such as a rooftop solar installation in Tuas) generates electricity, it produces two outputs: physical electricity and the “environmental attribute.”
Because electrons are indistinguishable once they enter the grid, the REC serves as the legal birth certificate for that green energy.
By purchasing and retiring a REC, your company can legally claim that the electricity you consumed was generated from a renewable source, thereby reducing your Scope 2 emissions.
What Procurement and Sustainability Teams Should Know about RECs
Not all RECs will deliver the green benefits a company seeks. The following is crucial information for both procurement and sustainability teams to understand to obtain RECs that deliver tangible benefits to the company.
1. Bundled vs. Unbundled Mechanism
There are two types of RECs that businesses can purchase:
- Bundled RECs: In a bundled arrangement, you sign a contract (often a Power Purchase Agreement or PPA) with the generator or a specialised utility. They deliver renewable power to your facility and, simultaneously, transfer ownership of the associated RECs directly to you.
- Unbundled RECs: This is Asiarecs’ specialty. You continue to buy your physical power from the grid, but you purchase the RECs separately. This allows you to source certificates from a variety of projects across the region without switching your electricity retailer.
If a retailer has 50 small shops across Singapore, it is nearly impossible to sign a direct power contract for each one. Unbundled RECs allow them to clean up and offset their power consumption by procuring certificates from renewable energy providers.
2. The Market Boundary Rule
Global standards such as the Science Based Targets initiative (SBTi) and RE100 generally require companies to source RECs from the same market boundary as their electricity consumption.
For Singaporean businesses, this means prioritising RECs generated within Singapore.
Purchasing a REC from a solar farm in Europe to cover a Singaporean office is generally not permitted for official carbon accounting.
It’s imperative that both procurement and sustainability teams understand this market boundary rule. If the company makes a purchase outside the RE100 boundary, the REC won’t be recognised and validated, yet the company must still bear the cost of that REC.
3. Use of Regional RECs
While a renewable energy certificate in Singapore is preferred, Singapore’s small size can make the local REC supply tight.
Under the SS 673 standard, companies can look toward regional RECs (from the ASEAN power grid) when local supply is unavailable in Singapore.
Asiarecs assists businesses with ASEAN sourcing, presenting verified projects in Malaysia, Vietnam, and beyond to ensure your regional portfolio remains compliant amid the REC shortage.
4. Spot vs. Contracted Procurement
For procurement teams, RECs are often viewed through the lenses of cost optimisation and risk management. That’s considering that RECs can get volatile and unpredictable.
There are two ways to purchase RECs:
- Spot Purchases: Buying RECs on an as-needed basis. This is useful for filling gaps at the end of a reporting cycle.
- Forward/Contracted Procurement: Signing long-term agreements for future RECs. This is the strategic choice for procurement teams, as it locks in prices and protects the company against the rising costs of renewable attributes as demand increases.
Understanding these options allows procurement teams to make the most cost-feasible decisions.
5. Double Counting
The greatest risk to a sustainability report is double-counting—where two companies claim the same MWh of green energy.
Asiarecs mitigates this risk by ensuring every certificate is tracked through its entire lifecycle.
Once a REC is retired in your company’s name, it is permanently removed from circulation, providing an immutable audit trail.
6. I-REC and TIGRs Registries
To ensure credibility, RECs must be registered on recognised global platforms.
- I-REC (International REC Standard): The most widely used registry in Asia, favored for its rigorous verification and alignment with the GHG Protocol.
- TIGRs (Tradable Instruments for Global Renewables): A robust alternative often used for specific project types. Asiarecs works across both registries, ensuring your certificates are globally recognised and audit-ready.
7. REC vs. Carbon Credits
While both Renewable Energy Certificates (RECs) and Carbon Credits (also called Carbon Offsets) are used to meet corporate sustainability goals, they are fundamentally different tools with distinct purposes, measurement units, and reporting rules.
- RECs are the legal proof that 1 MWh of renewable electricity was generated and injected into the grid.
- Carbon credits represent a metric tonne of carbon dioxide (or equivalent greenhouse gas) that was either prevented from entering the atmosphere or removed from it.
RECs are used to eliminate your electricity-related (Scope 2) emissions. Whereas carbon credits are used to neutralise the remaining emissions you cannot yet eliminate, such as those from heavy machinery, chemical leaks, or your global supply chain (Scope 3).
These are not interchangeable, so it’s crucial to understand your sustainability goals before deciding which to choose.
What Can A REC Do For Your Public Relations?
In an era of greenwashing scepticism, RECs provide the data-backed evidence needed to make bold public claims.
They provide the following benefits to your business:
Verified Claims
It’s one thing to market yourself as a green company, but another thing entirely for you to be recognised as a green corporation by third parties. An REC provides the third-party verification that your energy is supplied by a renewable provider.
Every REC you procure through Asiarecs includes a unique serial number that is tracked in global registries such as I-REC and TIGRs. This allows your PR team to move beyond marketing fluff.
So, in addition to your green-centered marketing and CSRs, you have the certificates to back your claims. This level of transparency effectively inoculates your brand against greenwashing.
Attracting Talent
People prefer to work for companies whose values align with theirs. For workers with a green thumb, a company’s climate impact is a deciding factor in where they choose to work.
- Recruitment Edge: Job seekers are more likely to apply to a company with a strong environmental record. Mentioning your RE100 or SBTi progress in job descriptions is a competitive advantage in a talent market driven by strong values.
- Employee Pride and Retention: Employees who feel their company’s values align with their own are more likely to stay long-term. Sharing internal impact reports that show which local solar farms your RECs support creates a sense of collective purpose.
Brand Loyalty
As sustainability shifts from voluntary to mandatory, companies that lead the charge today are building deep reserves of brand equity.
- Trust Through Consistency: By consistently retiring RECs year over year, you demonstrate that your commitment isn’t a one-time campaign, but a fundamental part of your business model.
- B2B Competitive Advantage: If you are a supplier to large MNCs, your RECs are their Scope 3 reductions. By having a clean Scope 2 footprint through RECs, you become the preferred partner for global giants who wish to clean their supply chains.
- SBTi & RE100 Prestige: Achieving milestones in these global frameworks places you in an elite tier of businesses. It signals to investors and customers that you are a resilient, forward-thinking organisation that is prepared for a low-carbon economy.
Ways RECs Can Save You On Costs In The Long Run
In addition to audit-backed green claims, RECs can lead to significant long-term financial benefits. This includes:
Access to Green Financing
Banks and investors are increasingly offering lower interest rates (Sustainability-Linked Loans) to companies that meet verified renewable energy targets. RECs are the primary proof used to secure these green-incentivised rates.
Future-Proofing against Regulation
As Singapore moves toward mandatory climate reporting for all listed and large non-listed companies, an established REC procurement strategy helps ensure you aren’t penalised as regulations tighten.
Partner with Asiarecs Today!
When it comes to unbundled RECs, Asiarecs acts as your central partner, simplifying the procurement, verification, and redemption of high-quality certificates.
We offer both RECs and carbon offsets that your company can procure to help you meet a wide range of sustainability goals.
Contact Asiarecs today to discuss a tailored roadmap for your Singapore and regional operations.
Frequently Asked Questions
If our company is a tenant in a shared office building, can we still purchase RECs?
Yes. Even if you do not own the building or control the electricity contract, you can purchase Unbundled RECs based on your specific office’s energy consumption. This allows you to claim renewable energy usage for your portion of the building’s footprint.
Do RECs expire if we don’t use them immediately?
RECs have what is called a “vintage,” which refers to the year the energy was generated. While they don’t “expire” in a traditional sense, global reporting standards (like the GHG Protocol) typically require you to use RECs with a vintage that matches the year of the electricity consumption you are claiming.
Can we use one REC to claim both "Renewable Energy Use" and "Carbon Emission Reduction"?
No. This is known as “double claiming.” Under SS 673 and global standards, a single REC represents the environmental attributes of 1 MWh of power. You use it to report a lower Scope 2 figure; you cannot split it to claim a separate carbon offset for other parts of your business.
Are RECs from a rooftop solar system in Singapore better than RECs from a wind farm in Vietnam?
Technically, 1 REC always equals 1 MWh. However, local “Singapore-sourced” RECs are often more valuable for PR and local compliance because they support the domestic Singapore Green Plan 2030. Regional RECs are a cost-effective way to scale your strategy when local supply is limited.
