Both are certificates, both are bought by sustainability teams, and both are often described with the same words: green, clean, compensated. They do very different things in a company’s climate accounts, and mixing them up is one of the most common reporting errors we see.
A REC or guarantee of origin certifies one megawatt-hour of renewable electricity for scope 2; a carbon credit certifies one tonne of CO2 avoided or removed elsewhere. This article explains what each is, how each is used in reporting, what the GHG Protocol’s revision of scope 2 may change, and when a company needs one, the other or both.
What RECs and guarantees of origin are
A renewable energy certificate is issued for each megawatt-hour of electricity a renewable plant feeds into the grid. It carries the “renewable attribute” of that electricity and can be traded separately from the physical power. Names differ by region:
Guarantees of origin (GOs) in the EU, under the Renewable Energy Directive. In the Netherlands they are issued by VertiCer.
RECs in North America.
I-RECs in many other countries.
Together they are called energy attribute certificates (EACs). A company that buys and cancels GOs for the electricity it uses can report that electricity as renewable.
What carbon credits are
A carbon credit is issued for one tonne of CO2 equivalent that a project avoided or removed: protecting a forest, capturing landfill gas, producing biochar. Companies retire credits to take responsibility for emissions they have not yet cut, as a contribution beyond their value chain (what are carbon credits).
The difference in one table
REC / guarantee of origin | Carbon credit | |
|---|---|---|
Unit | 1 MWh of renewable electricity | 1 tonne of CO2 equivalent |
What it proves | the electricity’s renewable attribute | an emission reduction or removal by a project |
Where it is used | scope 2, market-based method | beside the inventory, as a contribution |
Effect on reported emissions | lowers market-based scope 2 | none; reported separately |
Typical claim | “we use renewable electricity” | “we financed verified climate projects” |
Additionality | usually not required | central quality criterion |
How they appear in your report
Under the GHG Protocol’s Scope 2 Guidance, companies report scope 2 emissions in two ways: location-based, using the average emissions of the grid where they consume power, and market-based, using the instruments they buy. GOs and RECs only affect the market-based figure.
Carbon credits never change scope 1, 2 or 3. They are reported separately, with volume, project type and retirement evidence (carbon credits in CSRD reporting). A company cannot buy carbon credits to lower its scope 2 number, and it cannot use GOs to claim it has compensated other emissions.
Tip from Bernard de Wit, Founder of Regreener: “When a supplier offers ‘green electricity plus compensation’ as one package, ask to see two separate documents: the cancelled guarantees of origin for your megawatt-hours, and the retired carbon credits with their serial numbers. If they cannot be separated, neither can be checked.”
What the scope 2 revision may change
The GHG Protocol is revising its scope 2 rules. Its 2025-2026 public consultation proposed that certificates should only count in the market-based method if they are matched hourly to a company’s electricity use and come from the same deliverable grid region. Under current rules, annual matching across large regions is allowed.
The consultation drew strong and mixed responses, and the GHG Protocol published a summary of the feedback in July 2026. A final standard is not expected before 2028. For buyers that means today’s GO purchases remain valid under the current guidance, but long-term power contracts and local, recent renewable sources are the safer bet for the future.
When you need which
GOs or RECs if you want your electricity use reported as renewable, for example for RE100 or a renewable electricity target. Best: from new or local plants, or through a power purchase agreement.
Carbon credits for emissions you cannot yet cut, across all scopes, as a contribution beyond your value chain, and from 2035 for SBTi’s removal requirement (SBTi carbon removal requirements).
Both, in most climate strategies, kept clearly separate in reporting and communication.
The same logic applies to sustainable aviation fuel certificates, another book-and-claim instrument that sits next to carbon credits rather than replacing them (SAF certificates vs carbon credits).
“A guarantee of origin answers ‘where does our electricity come from?’. A carbon credit answers ‘what are we doing about the emissions we still have?’. Both are fair questions, and a company needs a separate answer to each.”
Bernard de Wit, Founder of Regreener
Sorting out green electricity and carbon credits?
We help companies separate their scope 2 instruments from their carbon credits, and report both correctly.
