Can PECs be used for offsetting?

While PECs provide a robust and transparent way to account for the carbon impact of electricity consumption and production, it is essential to understand their limitations and avoid misuse. In particular, PECs are not designed to be used as carbon credits and should not be used to offset Scope 1 (direct) or Scope 3 (indirect) emissions outlined in the GHG Protocol.

Scope 1 emissions are the direct emissions from owned or controlled sources, such as emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions.

PECs are designed specifically for the power market and are intended to account for the indirect emissions associated with electricity consumption (Scope 2 emissions). They measure the avoided emissions associated with renewable energy generation and the induced emissions associated with electricity consumption.

Using PECs to offset Scope 1 or Scope 3 emissions would misuse the certificates and lead to inaccurate carbon accounting. It could also undermine the integrity of the PEC system and the credibility of the organizations using them.

Instead, organizations should use appropriate mechanisms for offsetting Scope 1 and Scope 3 emissions, such as purchasing verified carbon credits from projects that reduce or remove greenhouse gas emissions. These projects could include reforestation or afforestation projects, methane capture projects, or projects that reduce emissions through energy efficiency or the use of cleaner technologies.