Renewable Energy Certificate (REC) Market – Trends Forecast Till 2031

Market Snapshot

Market Overview

The global Renewable Energy Certificate (REC) Market size was estimated at USD 27,840.0 million in 2024 and is projected to reach USD 48,789.80 million in 2031 at a CAGR of 9.80% during the forecast period 2025-2031.

The Renewable Energy Certificate (REC) market is a financial mechanism designed to incentivize the generation of renewable energy by providing certificates to renewable energy producers for each megawatt-hour (MWh) of electricity generated. These certificates can be traded, enabling companies and organizations to meet renewable energy targets or regulatory compliance requirements. RECs play a critical role in supporting the transition to a low-carbon economy by providing economic value to renewable energy projects and stimulating investments in clean energy infrastructure.

The scope of the REC market extends to a variety of renewable energy sources such as wind, solar, biomass, and hydroelectric power. It involves the issuance, trading, and retirement of certificates across various markets, often governed by national or regional regulatory bodies. Countries with renewable energy mandates, such as the United States, India, and several European nations, have established REC systems to encourage green energy production. The market is growing as more countries adopt ambitious sustainability goals and require companies to meet specific renewable energy quotas.

Trends in the REC market include increased participation by corporations and utilities seeking to meet sustainability targets and reduce their carbon footprint. The market is also witnessing technological advancements such as blockchain to improve the transparency and traceability of certificate transactions. Additionally, as governments strengthen their environmental policies, REC markets are expanding in both scope and sophistication, with growing recognition of RECs as a key tool in achieving carbon neutrality and meeting climate commitments.

Drivers of growth in the REC market include rising concerns over climate change, government policies and mandates promoting renewable energy adoption, and corporate sustainability initiatives. As renewable energy becomes more cost-competitive and technological advancements reduce costs, the market for RECs is expected to expand further. The growing focus on reducing greenhouse gas emissions and achieving net-zero targets worldwide has created strong demand for RECs, making them an essential component of the global transition toward cleaner energy sources.

Impacts USA tariff rates on the Renewable Energy Certificate (REC) Market

In April 2025, the U.S. renewable energy sector is experiencing significant challenges due to the imposition of tariffs on imported clean energy components. These tariffs have led to increased costs for solar panels, wind turbines, and battery storage systems, which are critical for renewable energy projects. As a result, the cost of generating renewable energy has risen, affecting the issuance and trading of Renewable Energy Certificates (RECs). The higher costs have led to a slowdown in new renewable energy projects, reducing the supply of RECs in the market. This supply constraint has caused REC prices to increase, impacting utilities and corporations that rely on RECs to meet renewable energy targets. The uncertainty surrounding trade policies and the increased cost of compliance have also led to volatility in the REC market, affecting investment decisions in the renewable energy sector.

Delvens Industry Expert's Standpoint

Experts in the Renewable Energy Certificate (REC) Market highlight several key trends driving growth and innovation. The Renewable Energy Certificate (REC) market facilitates the trading of certificates issued to renewable energy producers, helping organizations meet regulatory requirements or sustainability targets. With a focus on renewable energy sources like wind, solar, and biomass, the market is expanding as more countries adopt policies promoting clean energy. Key trends include increased corporate participation, technological innovations like blockchain for improved transparency, and growing government mandates. Drivers such as climate change concerns, supportive policies, and the push for carbon neutrality are fueling market growth, making RECs a crucial tool in the global transition to renewable energy.

Analyst view on the impacts of U.S. tariff rates on the Renewable Energy Certificate (REC) Market

Looking ahead, the REC market is expected to navigate a complex landscape shaped by ongoing trade tensions and policy shifts. The increased cost of renewable energy projects due to tariffs may continue to constrain the supply of RECs, potentially leading to higher prices in the short term. However, this scenario could incentivize domestic manufacturing of renewable energy components, potentially stabilizing costs and increasing REC supply in the long term. Additionally, corporations with sustainability commitments may seek alternative strategies to meet their renewable energy goals, such as investing directly in renewable energy projects or exploring international REC markets. The evolution of the REC market will largely depend on the resolution of trade disputes and the implementation of supportive policies that encourage renewable energy development and REC trading.

Market Portfolio

Key Findings

• The rising demand for solar panels, micro hydropower plants, and micro wind turbines is creating a significant opportunity for growth in the Renewable Energy Certificate (REC) market. As renewable energy sources, especially solar power, continue to gain traction, they are driving increased REC demand. Each megawatt-hour of energy generated from solar installations—now a dominant source of new renewable energy capacity—produces RECs, which utilities must acquire to meet Renewable Portfolio Standards (RPS) in many regions. As more individuals, businesses, and organizations adopt solar systems, encouraged by state incentives, tax credits, and sustainability initiatives, the production of RECs grows, fueling demand in both compliance and voluntary markets. This surge in REC generation not only supports the transition to renewable energy but also ensures a steady market as utilities and companies fulfill regulatory and corporate sustainability goals.

• In 2024, the compliance segment held the largest share of the Renewable Energy Certificate (REC) market, a trend that is expected to continue in the coming years. This dominance is largely driven by government regulations that require utilities, businesses, and energy providers to source a specific portion of their electricity from renewable sources. Many countries and regions, including the United States, European Union, and parts of Asia, have established Renewable Portfolio Standards (RPS) or similar frameworks, mandating entities to purchase RECs to meet clean energy obligations. The demand for compliance RECs is especially high in areas with ambitious renewable energy targets, as utilities and companies purchase these certificates to avoid penalties and stay compliant. Additionally, as governments continue to increase renewable energy quotas, the need for compliance RECs will grow, making this segment a key driver in the REC market.

• Unlike voluntary RECs, which businesses or individuals purchase to achieve sustainability targets, compliance RECs are legally required, ensuring consistent and significant demand. This regulatory-driven need provides the compliance segment with a competitive advantage over voluntary purchases, solidifying its dominance in the REC market. Compliance RECs are purchased to meet strict legal obligations and are critical for entities to fulfill renewable energy targets and avoid financial penalties, making this segment a key contributor to the overall growth of the REC market.

• The market is also divided into various regions such as North America, Europe, Asia-Pacific, South America, and Middle East and Africa. North America region is projected to hold the largest market share. Factors such as Government renewable energy mandates, corporate sustainability initiatives, technological innovations, rising demand for renewable energy, integration of green finance and ESG, expansion of compliance markets, increase in CSR efforts, development of EaaS models, growth in solar energy REC segments, rapid expansion in Asia-Pacific markets have triggered the Renewable Energy Certificate (REC) Market in the region.

Regional Analysis

North America to Dominate the Market

• North America plays a significant role in the Renewable Energy Certificate (REC) market, driven by strong government mandates, state-level renewable energy policies, and a growing emphasis on sustainability. The U.S. market benefits from a variety of renewable energy targets and the development of robust REC trading platforms. The push toward carbon neutrality and clean energy adoption, backed by both federal and state policies, ensures continued market growth in the region. The increasing participation of corporate buyers in RECs also adds to market dynamism.

• Europe is one of the most established markets for RECs, with countries like Germany, the UK, and the Netherlands leading the charge. The region’s strong commitment to renewable energy targets, as set by the European Union, has spurred significant demand for RECs. Europe’s regulatory framework supports the use of RECs to meet emission reduction goals, and the presence of both governmental and private sector initiatives to promote green energy has resulted in a highly active REC market. The region’s strong sustainability culture and the rise of green corporate practices continue to drive market development.

• The Asia-Pacific region is witnessing rapid growth in the REC market, fueled by countries like India, China, Japan, and Australia, which are increasingly focusing on expanding their renewable energy capacity. Government policies, such as renewable energy quotas and incentives, are promoting the adoption of RECs to meet energy transition goals. While REC markets are still evolving in some countries, the region’s growing renewable energy capacity, combined with the need for emission reduction and energy security, provides a fertile ground for the market’s expansion in the coming years.

• In Latin America, the REC market is emerging, particularly in countries such as Brazil, Mexico, and Chile, where renewable energy projects are gaining momentum. Latin America is increasingly recognizing the potential of RECs as tools for achieving sustainability goals and attracting international investments in clean energy. The market is still in its nascent stages but is expected to grow as governments establish clearer regulatory frameworks, and renewable energy becomes more integral to national energy strategies. Strong winds of change from both regulatory bodies and corporate sustainability targets drive growth in the region.

• The Middle East & Africa region is in the early stages of developing its REC market, with countries like South Africa, the UAE, and Saudi Arabia exploring green energy projects and incorporating RECs into their renewable energy strategies. Despite the region's heavy reliance on fossil fuels, increasing investment in solar energy projects and sustainability initiatives, coupled with growing global pressure to diversify energy sources, are contributing to the market's gradual development. As governments in the region move toward ambitious renewable energy goals, the REC market is poised for expansion.

Competitive Landscape

• 3Degrees, Inc.
• Ecohz
• Statkraft
• Sterling Planet
• South Pole
• STX Group
• REDEX
• Shell Energy
• EDF Trading Limited
• GRID-INDIA
• ENGIE
• Evolugen
• Enel Spa
• AFS
• Climate Impact Partners

Recent Developments

• In February 2024, Statkraft entered into a Virtual Power Purchase Agreement (VPPA) with Air Liquide. Through this agreement, Air Liquide will acquire Renewable Energy Certificates (RECs) from newly established wind farms in Poland, helping to reduce its carbon dioxide (CO2) emissions by 38,000 tonnes annually.
• In December 2024, NSCH, located in Massachusetts, committed to a two-year agreement with ENGIE Resources, ensuring that 100% of its energy consumption is matched with RECs. This initiative aligns with NSCH's sustainability objectives and guarantees that its energy use is offset by renewable generation. This partnership also supports ENGIE Resources in enhancing its position in the renewable energy market by expanding its customer base and demonstrating its capacity to deliver sustainable energy solutions.
• In May 2024, Shell Energy Europe Limited and 3Degrees Group Inc. formalized an agreement to participate in the auction for guarantees of origin at Croatia’s power exchange, CROPEX.
• In April 2023, 3Degrees, Inc. joined forces with the International Organization for Migration (IOM) and Energy Peace Partners (EPP) to complete a second Peace Renewable Energy Credit (P-REC) transaction, funding the solar electrification of Malakal Teaching Hospital and Bor State Hospital in South Sudan.

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• Increase your understanding of the market for identifying the most suitable strategies and decisions based on sales or revenue fluctuations in terms of volume and value, distribution chain analysis, market trends, and factors.
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