Electricity travels on a single grid. There is no clean socket and a dirty one. Electrons mix, and your plant meter will not tell you which solar park they came from.
So when someone asks you for «renewable energy» in the report, they are usually asking for something more precise: a document an auditor can check, showing that 1 MWh of your consumption was attributed to renewable generation. That is the I-REC conversation.
This guide explains what you are buying, how the certificate moves, and what ends up in your company's name when the process closes. If your question is how to bring Scope 2 down with on-site generation, a PPA, or unbundled certificates, read the three-path article. If the phrase «buying renewable energy» is what trips you up, start with buying versus proving.
What an I-REC is, in one sentence
An I-REC(E) is the digital certificate for 1 MWh of renewable electricity generated and injected into the grid by a plant, in a specific period. I-TRACK Foundation runs the standard. It does not track electrons. It records the generation event (this plant, this date, this megawatt hour) and transfers title to those attributes, separate from the physical flow.
The certificate has a serial number. Two companies cannot own the same one. That is the evidence GHG Protocol and IFRS S2 accept for market-based Scope 2.
What the certificate carries
An I-REC is not a generic intermediary PDF. It includes, among other things:
- the plant that generated;
- the country (the market of that generation);
- the technology (solar, wind, hydro, and so on);
- the generation year, which this market calls vintage;
- a unique identifier in the registry.
Those fields matter because the auditor checks that country and year match the consumption you are reporting. The cheapest certificate from another market often gets expensive in the audit. In practice, you buy from the same country where you consume, for the same year you report.
How it moves: issue, transfer, redeem
The cycle is short to explain and easy to get wrong if it lives in email.
- It is issued. The plant, or whoever operates for it, registers the generation. The certificate is born.
- It is transferred. Title changes. It can pass through a platform operator, a broker, or your own registry account. Until it is redeemed, it can still move.
- It is redeemed. It is taken out of circulation and left in someone's name: your company, a site, or a client. After that it cannot be resold. What you receive is the Redemption Statement: volume, vintage, beneficiary, and cancellation ID, ready for audit.
Redemption is the step that closes the claim. Without redemption in your name, you have a certificate in transit, not reporting evidence. A consultant or Cero Trade can run the process. The renewable claim belongs to the beneficiary, with the same legal name as the inventory.
You do not need a participant account on the international registry. An accredited Platform Operator works in your name: import, transfer, and redeem.
How it enters Scope 2
The GHG Protocol asks, when contractual instruments exist in the market, for two readings of the same electricity consumption:
- Location-based: the average grid factor where you consume. It stays there even if you buy certificates.
- Market-based: what you chose by contract (PPA, supply with attributes, or I-RECs) and, for the uncovered remainder, the residual mix.
If you cover 100% of consumption with valid I-RECs redeemed in your name, that second figure can go to zero. It is not double counting. It is two ways of reading the same megawatt hour. The I-REC does not switch off the grid's chimneys. It attributes renewable origin to the consumption you report under the market-based method.
An illustrative example, with round numbers so the arithmetic is visible. A company in Santiago uses 1,000 MWh a year. If the grid factor it uses were 0.4 tCO₂e/MWh, the location-based reading would be 400 tCO₂e. If it retires 1,000 valid I-RECs covering that consumption, the market-based reading can sit at 0. Both numbers appear in the inventory.
What an I-REC is not
Three mix-ups that show up in almost every first call.
It is not a carbon credit. An offset says «I compensated somewhere else» and is booked on a separate line. Your Scope 2 stays the same. An I-REC says «this MWh of my electricity is renewable» and can lower market-based Scope 2. They look like the same world. They do different jobs.
It is not hourly physical consumption, and it is not an exclusive socket. Unless you generate and consume on the same site, grid electrons stay mixed. The certificate does not turn your meter into a solar park.
It is not a tax or a mandate from the standard. IFRS S2 and local rules such as Chile's NCG 519 ask you to measure and report Scope 2. They do not tell you which instrument to buy. The I-REC is a GHG Protocol tool. A decision, not a fine.
Questions we get on the first call
How many I-RECs do I need? As many megawatt hours as you want to cover of your grid electricity. If you use 10,000 MWh and want to evidence 40%, that is 4,000 certificates. The volume comes from your inventory, not from a generic recipe.
Does it work if I am a regulated customer? Yes. It is the usual path when you cannot sign a PPA. You buy the certificate separately from the energy contract.
Does it end up in our company's name? Yes, if it is redeemed in the name of the reporting entity. Check that the legal name matches the inventory. A mismatched trade name is one of the silliest ways to fail an audit.
Can I use them for «net zero»? They cover electricity Scope 2 under the market-based method, if vintage and country match. They do not close Scope 1 or Scope 3, and they do not replace efficiency, on-site generation, or a PPA when those paths exist.
How a purchase works in practice
Before you ask for a quote, it helps to have five things clear: how many Scope 2 MWh you want to cover (by country or site, if that applies); the reporting period and vintage rule; the legal name of the beneficiary; the country of consumption; and the date you need the evidence for the report or the audit.
After that the work is registry work: compatible origin, transfer, redemption in your name, and papers that can be reconciled with the inventory. That is where errors show up (wrong beneficiary, misaligned vintage, a PDF with no traceability). A platform operator exists so that last mile does not live in an email chain.
If you are building this year's report, write to contacto@cerotrade.cl or use the form on the site. We will look at volume, country, and vintage with you.
Sources
- GHG Protocol, Scope 2 Guidance: ghgprotocol.org/scope-2-guidance
- IFRS S2 (ISSB): ifrs.org
- I-TRACK Foundation: trackingstandard.org
- Chile, NCG 519 (CMF): cmfchile.cl