Mission Emissionality for Energy Peace Partners

Team Members: Poornima Pandian (Manager), Tarlee Dahn (Deputy Manager), Alexander Feil, Abubaker Suleonibo, Carrie Kim, Yiwen Deng, Zihuan Tang, Zhixuan Hu, Sam Thanassi, Christopher Arroyo

This report argues that while global investments in renewable energy have grown, fragile regions continue to receive a meagre share of that capital. In Africa and some countries in Asia and the Middle East, communities are largely dependent on high-emitting energy sources, such as diesel generators, firewood, charcoal, kerosene, etc., for daily energy needs. Emissionality, defined as the amount of carbon emissions avoided per unit of renewable energy generated, highlights the climate impact of displacing these fuels. The current global frameworks and corporate accounting systems do not reward emissionality-focused renewable energy projects, as their focus is on regionalizing the electricity sources connected to Scope II accounting. As a result, P-RECs remain difficult to scale within mainstream corporate purchasing behavior. The following global carbon accounting and reporting frameworks were evaluated as part of the research phase of the project, including recent draft revisions issued for public comment in Q1 of 2026.: Greenhouse Gas Protocol (GHG Protocol) Scope 2 Guidance, the Science-Based Target Initiative (SBTi), and ISO 14064-1. The analysis finds that these frameworks establish robust, standardized principles and accounting rules to ensure consistency and credibility in emissions accounting and reporting. However, they also impose strict geographic requirements with respect to the purchase of Energy Attribute Certificates for offsetting Scope 2 emissions. ISO 14064-1 offers flexibility with no explicit provision for geographic requirements. Several large organizations use the ISO framework as their GHG accounting method. It is recommended that EPP explore opportunities with these organizations. Current draft revisions to the GHG Protocol and SBTi contain hourly matching criteria that would further restrict out-of-market purchases. Importantly, SBTi informs that the draft revisions have accommodated outside-the-grid purchases for companies, as a time-limited alternative, if the grid lacks sufficient low-carbon or zero-carbon electricity. 

Due to the constraints faced by EPP to scale P-RECs within Scope 2 frameworks, the report also provides a detailed analysis of Scope 3 frameworks. The Scope 3 guidance for all the three frameworks consistently emphasizes direct emissions reductions within the value chain through supplier engagement and low-carbon procurement.. They do not permit the use of Energy Attribute Certificates (EACs) to offset energy-related scope 3 emissions. However, the third-party suppliers in the value chain of various global corporations could be a potential target for P-REC purchases. The Scope 2 emissions offsetting by these suppliers in EPP focus countries would count towards the Scope 3 emissions offsetting of the reporting corporations. The current emisssions accounting systems do not incentivize capital flow to regions having high impact on the climate and local community, in other words, places with higher emissionality. To support this argument, the report presents an emissionality calculator designed to estimate avoided emissions associated with mini-grid renewable electrification in some African regions. Drawing on energy consumption data from World Bank Multi-Tier Framework Energy Access survey, emissionality is calculated through two methodologies. The first one analyzes the unelectrified household usage in isolation, whereas the second one compares the usage with grid-connected households. 

The report also focuses on the size and growth potential of the REC market. The global REC market in 2025 is between $20.6 and $30.7 billion, with an average estimate of USD 25.7 billion. Using a voluntary market share of 44.4%, the report estimates the voluntary portion to be $11.4 billion in 2025, with a potential to rise to $23.3 billion by 2030. The analysis also models a scenario in which frameworks allow a modest 1% exemption to purchase RECs out-of-market. The model estimates the REC demand at $90 million and $170 million for 2025 and 2030, respectively. This projection demonstrates that even a limited reform to procurement rules could create a conducive market environment for channelling investments to under electrified regions.

The report complements this market exercise with a list of potential corporate buyers who are well suited targets for P-REC purchases. Using the recent public disclosures of corporations, the report evaluates firms that have familiarity with renewable electricity procurement and a meaningful presence in EPP’s African markets. The principal finding is that the most credible prospects are in countries such as Nigeria, DRC, Kenya, Ethiopia, Uganda, and Zimbabwe. Nigeria is the clearest anchor market across sectors, while the DRC appears in a narrower but strategically important subset of firms. 

The report finally assesses the socio-economic co-benefits of the renewable projects through willingness to pay (WTP) method for electricity access. Drawing on studies from Senegal, Kenya, Nigeria, Niger, and Ethiopia, the report shows that households and firms place considerable value on reliable electricity. The report also highlights evidence that electrification improves welfare beyond private consumption by supporting longer business hours, higher productivity, reduced use of hazardous fuels, better educational outcomes, and improved health services. 

Based on the insights and findings, the report recommends the following five suggestions for the Energy Peace Partners.

• Prioritize companies with in-market presence: Focus on firms with a physical footprint in target countries, as current GHG Protocol and SBTi requirements favor geographically aligned REC procurement. 
• Adopt a phased market expansion strategy: Begin with compliance-aligned buyers (in-market presence) and gradually expand to global buyers as accounting frameworks evolve to accommodate out-of-market procurement. 
• Engage ISO 14064-1 reporting companies: Target firms using ISO frameworks, which offer relatively more flexibility on geographic procurement, while monitoring potential convergence with GHG Protocol standards. 
• Leverage Scope 3 and BVCM positioning: Target companies addressing Scope 3 emissions and pursuing Beyond Value Chain Mitigation (BVCM), positioning P RECs as high-impact, voluntary climate investments in supplier and high-risk regions. 
• Use emissionality to underpin P-RECs: Deploy the emissionality calculator to quantify avoided emissions and build a compelling case for P-RECs despite their higher cost relative to I-RECs.