www.hestiya.com The Future of Supply & Demand in the I-REC Market An ESG Outlook on International Renewable Energy Certificates to 2030 and Beyond ESG & I-REC MARKET INTELLIGENCE Prepared by HESTIYA September 2026
Table of Content 1. Introduction 2. Current State of the Market 3. Demand Drivers to 2030 4. Supply Dynamics to 2030 5. Price Outlook & Market Balance Scenarios 6. Risks, Uncertainties & Unintended Consequences 7. Implications for Stakeholders 8. HESTIYA's Role in the I-REC Market 9. Conclusion 1.
1. Executive Summary 2030 is fast becoming the decisive milestone for corporate renewable-energy claims, not only as a symbolic climate deadline, but as the point at which net-zero and RE100 pledges convert into hard reporting requirements. Under the GHG Protocol's market-based method, companies must back their Scope 2 electricity claims with credible Energy Attribute Certificates (EACs) — and for the 40+ countries outside the EU and United States, the International REC (I-REC) Standard has become the default instrument for doing so. Regulation is accelerating this shift. The EU's Carbon Border Adjustment Mechanism (CBAM) will be fully in force before 2030, indirectly rewarding exporters that can evidence renewable electricity use. At the same time, disclosure regimes such as the EU's CSRD and the ISSB's IFRS S2 standard are tightening the bar for what counts as a credible renewable-electricity claim, pushing buyers toward certificates with strong traceability and, increasingly, hourly time-matching. This brings us to the central question shaping the next decade: will I-REC issuance in emerging and fast-growing power markets keep pace with the surge in corporate demand for verified renewable electricity — especially as AI and data-centre load growth pushes electricity demand to new highs? Early signals point to a market that is scaling quickly but unevenly. BloombergNEF tracks rapid growth in unbundled EAC issuance across Asia and Latin America, while the International Energy Agency (IEA) highlights that grid decarbonisation in several high-growth economies is not yet matching the pace of corporate demand — a gap that will define I-REC market dynamics through 2030. 2.
2. Current State of the Market Corporate renewable-electricity claims are underpinned by a family of Energy Attribute Certificates (EACs). Each certificate represents 1 MWh of renewable generation, tracked from generator to end-buyer through a registry. The I-REC Standard is the dominant framework across Asia, Africa, Latin America and the Middle East, complemented by two regional equivalents: Ÿ Guarantees of Origin (GOs) — issued across the European Economic Area and tracked via national TSOs under the AIB-net hub. Ÿ Renewable Energy Certificates (RECs) — issued in the United States through regional systems such as WREGIS, NEPOOL-GIS and PJM-GATS. Certificates are traded in two forms: unbundled I-RECs, purchased independently of the underlying power, and bundled instruments, where the certificate is embedded within a Power Purchase Agreement (PPA). Buyer profiles are broadening quickly — multinational corporates remain the largest segment, driven by RE100 and net-zero commitments, but hyperscale data-centre operators and financial institutions decarbonising their financed emissions are now among the fastest-growing buyer categories. Market trackers including S&P Global and Ecohz report steady growth in I-REC issuance over 2024–2025, led by solar and wind projects in India, Vietnam, Brazil and Chile, even as registry coverage across parts of Africa and Southeast Asia remains thin relative to installed renewable capacity. 3. Table 1: How I-RECs Compare to Regional Equivalents Instrument Coverage Issuing Body Typical Use I-REC 40+ countries outside EU/US (Asia, Africa, Latin America, Middle East) Local Issuers under the I-REC Standard Foundation Scope 2 market-based reporting; Re100 Guarantee of Origin (GO) European Economic Area National TSOs via AIB (AIB-net) EU disclosure; CSRD- aligned reporting REC United States (regional) Regional tracking systems (e.g., WREGIS, NEPOOL-GIS, PJM-GATS) State RPS compliance; voluntary Scope 2 claims
3. Demand Drivers to 2030 a) Corporate net-zero commitments and Re100 Corporate participation in RE100 and broader net-zero pledges continues to expand demand for market-based renewable claims. As Scope 1 and 2 reduction pathways mature, attention is shifting to the quality of Scope 2 claims themselves — with the GHG Protocol's ongoing Scope 2 guidance revision expected to reinforce closer time and location matching between consumption and certified generation. b) Regulation and disclosure spill-over CSRD, ISSB S2 and CBAM are collectively raising the bar for what counts as an evidenced renewable-electricity claim. Exporters seeking to reduce CBAM exposure, and companies reporting under CSRD, increasingly need certificates with strong chain-of-custody — pushing buyers toward I-RECs backed by robust local Issuers and away from loosely verified claims. Analysis from PwC and IETA points to this regulatory overlap as a key driver of cross-border EAC demand. c) Procurement preferences: from annual matching to 24/7 CFE Leading buyers — notably large technology companies — are moving beyond annual volume matching toward 24/7 carbon-free energy (hourly matching). This is reshaping procurement toward bundled PPAs and certificates from specific, verifiable assets rather than low-cost unbundled volumes, with knock-on effects for which projects command a premium. d) New demand sources: AI, data centres and structured offtake Surging electricity demand from AI and data-centre growth is becoming a first-order driver of EAC demand. IEA and BloombergNEF both flag long-term offtake agreements and forward EAC contracts as increasingly important tools for hyperscalers seeking to secure certified renewable supply at scale. 4.
4. Supply Dynamics to 2030 a) Solar and wind: the near-term growth engine Solar and wind account for the large majority of new I- REC issuance, led by rapid capacity additions in India, Vietnam, Brazil and Chile. Falling technology costs and shortening project lead times make these technologies the most responsive source of near-term certificate supply. b) Hydro and biomass: large volumes, additionality scrutiny Large hydro remains a significant source of certified volume in several markets, but buyers and standard- setters are applying growing scrutiny to additionality where existing, already-amortised assets simply register for certification rather than driving new renewable build. c) Registry expansion and lead times The I-REC Standard Foundation continues to onboard new Issuers across Africa, the Middle East and parts of Asia, but registry readiness often lags installed renewable capacity by one to three years — a structural bottleneck that keeps certified supply below theoretical potential in several fast-growing grids. d) Quality filters and market consolidation As buyers grow more selective, weaker Issuers and loosely verified volumes are being pushed to the margins. Tightening rules under the I-REC Standard's Code, together with the anticipated GHG Protocol Scope 2 revision, are expected to concentrate demand on certificates with the strongest MRV and traceability — consolidating trust in the market even as it raises the bar for new entrants. 5. Figure 1: Illustrative I-REC Issuance Growth 1400 1200 1000 800 600 400 200 0 2020 2021 2022 2023 2024 2025 2026E 2027E 2028E 2029E 2030E Issuance (TWh-equivalent, indexed) Illustrative Global I-Rec Issuance Growth, 2020-2030 Reported Projected (E) Figure 1. Illustrative global I-REC issuance growth, 2020–2030 (indexed, TWh-equivalent). Directionally consistent with market-tracker reporting from BloombergNEF and S&P Global; figures are illustrative, not ocial statistics.
5. Price Outlook & Market Balance Scenarios As with other EAC and carbon-adjacent markets, three scenarios frame the range of plausible outcomes to 2030: Ÿ Low-demand / High-supply: oversupply from fast- growing solar and wind fleets keeps unbundled prices near historic lows; premium, hourly-matched volumes remain a small niche. Ÿ Baseline: steady corporate uptake and gradually tightening quality filters produce moderate price recovery, with a growing premium for bundled and hourly-matched certificates. Ÿ High-demand / Constrained supply: AI-driven load growth and stricter Scope 2 matching rules outpace registry and project build-out, pushing prices up sharply, especially for wind and verifiable, asset- specific volumes. Historical volatility has been driven by policy shocks (new disclosure or matching rules), corporate strategy reversals, registry corrections, and the pace of technology cost declines. IEA and S&P Global data provide the most consistent long-run reference series for benchmarking these movements. 6. Table 2: Illustrative I-REC Price Ranges by Scenario ($/Mwh) Figure 2: Price Comparison Across Scenarios Technology Low-demand / High-supply Baseline High-demand / Constrained supply Solar $0.20–$1.00 $1.00–$3.00 $3.00–$6.00 Wind $0.30–$1.30 $1.30–$3.30 $3.50–$6.50 Hydro / Other $0.10–$0.50 $0.50–$2.00 $2.00–$4.00 5 4 3 2 1 0 Low-demand/High-supply Baseline High-demand/ Constrained supply Price ($/MW) I=REC Price Midpoints by Scenario and Technology ($/MWh) Figure 2. I-REC price midpoints by scenario and technology ($/Mwh), derived from the ranges in Table 2. Illustrative for scenario comparison, not a market quote. Solar Wind Hydro/Other
6. Risks, Uncertainties & Unintended Consequences 7. Implications for Stakeholders Quality risk: weak certificates undermining trust Loosely verified certificates — particularly from legacy hydro or thinly monitored registries — risk undermining confidence in market-based Scope 2 claims generally. Tightening standards and growing buyer due diligence are pushing the market toward higher-integrity supply, but the transition is uneven across regions. Over-reliance on low-cost unbundled certificates: a moral hazard Cheap, unbundled I-RECs can allow companies to claim renewable electricity use without materially changing what is on their local grid. This creates a moral-hazard risk analogous to over-reliance on carbon removals: certificates substitute for, rather than drive, real decarbonisation unless procurement is deliberately structured toward additional, asset-specific supply. Policy and political risk A revised GHG Protocol Scope 2 guidance could tighten time- and location-matching requirements, potentially stranding volumes of loosely matched certificates and repricing the market quickly once finalised. Supply chain and geopolitical risk Solar-panel tariffs, critical-mineral constraints, and grid-interconnection queues all affect how quickly new renewable capacity — and therefore new certificate supply — can come online, particularly in the fast- growing markets where I-REC issuance is concentrated. a) Corporate buyers Buyers should move beyond lowest-cost unbundled procurement toward a blended strategy: near-term unbundled I-RECs to close reporting gaps today, paired with growing investment in bundled PPAs and asset- specific certificates that support real grid decarbonisation and hedge against tightening Scope 2 rules. b) Project developers and investors Developers benefit from staged financing structures, forward offtake agreements and blended capital that de-risk early-stage projects in markets where registry infrastructure is still maturing. Strong MRV and transparent additionality evidence increasingly differentiate premium projects. c) Policymakers and standard-setters Faster onboarding of new Issuers, harmonised MRV, and clear guidance from bodies such as the I-REC Standard Foundation and the GHG Protocol will be critical to closing the gap between installed renewable capacity and certified, tradeable supply. 7.
8. HESTIYA's Role in the I-REC Market 9. Conclusion HESTIYA supports clients across the full I-REC procurement lifecycle: Ÿ Emissions reduction first: HESTIYA positions I-REC procurement as a complement to genuine electricity-eciency and decarbonisation efforts, not a substitute for them. Ÿ Dual-track procurement: unbundled I-RECs to meet near-term Scope 2 reporting needs, paired with long-term bundled PPA and hourly-matched offtake contracts to prepare for tightening matching rules. Ÿ High-integrity sourcing: every project is screened for additionality, registry robustness and MRV strength, prioritising Issuers aligned with I-REC Standard best practice. Ÿ Structured finance support: staged procurement, price-stability tools and forward offtake structures to help developers in emerging registries access capital sooner. Ÿ Market intelligence: ongoing tracking of price signals, registry expansion and regulatory shifts (CSRD, ISSB, GHG Protocol) to guide client buying decisions. Ÿ Transparent reporting: clear documentation of certificate type, vintage, technology and registry for every unit procured, supporting client disclosure under CSRD and CDP. By 2030, the I-REC market reaches an inflection point. If registry expansion, project financing and evolving Scope 2 guidance move in step with corporate demand, certified renewable electricity can scale fast enough to support credible net-zero claims worldwide. If they do not, buyers will face tightening supply in the highest- integrity segments, rising prices for bundled and hourly-matched volumes, and growing reputational risk for anyone relying on loosely verified certificates. Analysis from BloombergNEF and the IEA converges on the same conclusion: substantial opportunity on one side, and mounting quality and credibility questions on the other. The path forward is pragmatic — buyers should balance integrity, impact and cost, locking in durable, high-quality supply now to protect long-term credibility as the rules of the market continue to tighten. 8.
Frequently Asked Questions 9. What is an I-REC and how is it different from a carbon credit? An I-REC certifies 1 MWh of renewable electricity generation and is used for Scope 2 electricity claims, while a carbon credit represents 1 tCO ₂ e of emissions avoided or removed and is used for broader Scope 1–3 offsetting. See the I-REC vs REC vs GO comparison for a full breakdown by region and use case. Which regions does the I-REC Standard cover? The I-REC Standard operates in 40+ countries across Asia, Africa, Latin America and the Middle East, complementing Guarantees of Origin in Europe and RECs in the United States (see Table 1). How can my company estimate its I-REC or carbon credit requirement? Hestiya's I-REC & Carbon Calculator lets buyers estimate certificate volumes needed to cover Scope 2 electricity consumption or residual emissions. Where can I buy or sell I-RECs and carbon credits directly? The Hestiya Marketplace offers direct, blockchain- verified spot trading for both instruments, with real- time pricing and instant settlement. Are unbundled I-RECs still credible for ESG reporting? Yes, provided they come from a robust registry and Issuer, though buyers pursuing 24/7 carbon-free energy or CSRD-grade assurance increasingly favour bundled or hourly-matched volumes. Hestiya's ESG to Carbon Credit journey guide walks through how to sequence this. What should buyers check before purchasing carbon credits or I-RECs? Additionality, permanence, registry robustness, and alignment with ICVCM or I-REC Standard rules are the key checks — see Hestiya's Carbon Credit Buyer's Checklist for a step-by-step guide. For more questions, visit the full Hestiya FAQ page. 1. I-REC Standard Foundation. irecstandard.org — International REC Standard rules, Issuers and registries. 2. RE100. there100.org — Corporate renewable-electricity commitment initiative. 3. Greenhouse Gas Protocol. ghgprotocol.org — Scope 2 market-based method and ongoing guidance revision. 4. International Energy Agency (IEA). iea.org — Renewable capacity and electricity-demand analysis. 5. BloombergNEF. about.bnef.com — EAC and renewable-energy market research. 6. International Emissions Trading Association (IETA). ieta.org — Policy and market reports. 7. PwC. pwc.com — Carbon and energy policy guidance. 8. S&P Global. spglobal.com — Environmental and energy-market data. 9. IFRS Foundation / ISSB. ifrs.org/sustainability — IFRS S2 climate-related disclosure standard. 10. European Commission. CBAM overview — Carbon Border Adjustment Mechanism. 11. Association of Issuing Bodies (AIB). aib-net.org — European Guarantees of Origin hub. References