Prospects and challenges for the role of commodity certificates to address specific emission sources

Between 2024 and 2027, the potential role for commodity-specific environmental attribute certificates (commodity EACs) will be discussed among standard setters within the revision of the Science-Based Targets initiative’s Corporate Net Zero Standard, and the major revision of the GHG Protocol Corporate Standard and Scope 3 Guidance. Several programmes have taken the initiative to propose frameworks or criteria for how an accounting system with commodity EACs could work.

This paper takes a step back and discusses the prospects and risks for pursuing such an approach. We provide an overview of potential commodity EACs and describe the relevant nuances and challenges to shed light on the following questions:

• Is it sensible to develop GHG accounting and target-setting frameworks that assume a significant role for commodity EACs as market-based instruments?
• Under what circumstances and claims could the procurement of commodity EACs support sector transitions, without distracting or delaying from more direct action?

Our report demonstrates that there is no one-size-fits all approach for commodity EACs. We observe a high degree of fragmentation in the definition and availability of EACs, as well as different circumstances under which EACs could potentially support the necessary sector transitions.