Samsung and SK Can Also Buy 'REC'... Recognition of Greenhouse Gas Reduction Performance

Ministry of Industry Opens Renewable Energy Certificate (REC) Trading Market
Recognized as a Greenhouse Gas Reduction Measure... Promoting RE100 Implementation and Preventing REC Price Collapse

[Sejong=Asia Economy Reporter Kwon Haeyoung] A new trading system for Renewable Energy Certificates (REC), which allows companies participating in the 'RE100' campaign?meaning they use only electricity generated from renewable energy sources such as solar and wind?to directly purchase renewable energy, will be launched. Until now, only large power producers could purchase RECs, but going forward, general companies will also be able to buy RECs to join the RE100 campaign and receive recognition for greenhouse gas reduction achievements. The increased demand for RECs from companies is also expected to partially help resolve the oversupply issue.

The Ministry of Trade, Industry and Energy announced on the 1st that it will open and operate the renewable energy REC trading system starting from the 2nd.

RECs are certificates issued to power producers who generate electricity using renewable energy. These producers can sell RECs to obligated entities under the Renewable Portfolio Standard (RPS) system for a fee. Essentially, this functions as a subsidy paid to renewable energy power producers.

An official from the Ministry of Trade, Industry and Energy stated, "Along with the currently operating green premium tariffs, introduction of third-party Power Purchase Agreements (PPA), and self-generation methods, RE100 compliance through REC trading will now be possible. This will make it easier for companies to participate in RE100 and engage in ESG (Environmental, Social, and Governance) activities."

One advantage of fulfilling RE100 commitments through REC purchases is that it allows for continuous purchasing without complicated procedures. Globally, REC purchases are the most widely used compliance method among RE100 participating companies, accounting for 42%. When companies purchase RECs, they can be recognized not only for RE100 compliance but also for greenhouse gas reduction achievements. Previously, only power producers purchased RECs, but with general companies now able to buy them, demand for RECs will expand, contributing to the stabilization of REC supply and demand and promoting the spread of renewable energy, according to the Ministry of Trade, Industry and Energy.

The REC trading system will operate through two methods: an over-the-counter (continuous) trading method where contracts are concluded between trading parties and then registered and settled in the system, and a platform trading method where listings are posted twice a month for buying and selling. A 'Certificate of Renewable Energy Use' will be issued for RECs purchased by companies, allowing them to use it for RE100 compliance and greenhouse gas reduction achievements.

An official from the Ministry of Trade, Industry and Energy said, "We plan to fully establish RE100 compliance methods by introducing direct PPA methods within this year, thereby supporting domestic companies' participation in RE100 and their ESG activities."