Directors of sustainability at global companies face a full docket of 2025 challenges. In the United States, a federal government dismissive of climate science will amplify existing fossil fuel pushback on climate-responsible investment. In Europe, proudly “illiberal” voices have called to repeal the European Union’s Corporate Sustainability Reporting Directive (CSRD) before the first report deadline.
Amid this negative push stands at least one positive and pragmatic trend. Companies that want to procure 100% renewable energy can do so in a low-risk, cost-effective way that achieves tangible emissions reductions and environmental improvements. The keys are purchaser causation, collaboration and emissionality.
Purchaser causation
Directors of sustainability who want to maximize their procurement’s emissions reductions and cost-effectiveness increasingly turn to buyer-aggregated virtual power purchase agreements (VPPAs). While the world’s largest electricity users have deployed VPPAs for over a decade, only recently has an aggregated procurement process democratized utility-scale clean energy market access for the vast majority of high-credit enterprise buyers whose loads fall short of the threshold required to complete a VPPA independently.
This climate finance mechanism, “VPPA 2.0,” uses a contract for difference (CFD) commitment to the bundled cost of the clean energy development and the project’s resulting energy attribute certificates (EACs). Multiple high-credit buyers’ effective commitment to a minimum price enables developers to obtain financing and begin project development. In this way, CFD-based VPPAs of sufficient scope and term proximately cause the new clean energy project.
Unfortunately for our climate, purchaser causation is the exception rather than the rule. Relevant standards allowing all EACs to “account” for a company’s energy consumption too closely resemble fourteenth-century indulgences for the departed’s sins. Fortunately, corporate procurement executives increasingly recognize that EAC procurements only cause new renewable energy if the buyer is deliberate about their procurement process.
In offsite clean energy, procurements resembling medieval “indulgences” include unbundled EACs and contributing EACs. Neither proximately causes new renewable energy.
- Unbundled EACs are bought through spot market secondary transactions that, under the current greenhouse gas (GHG) protocol, may be procured from existing projects up to 14 years old.
- Contributing EACs provide incremental financing to a new project’s capital stack. Their dubious marketing sows confusion by misleadingly referencing “additionality,” a confusing term (mis)appropriated from the carbon offset market. Consequently, climate-motivated procurement executives seeking to cause new renewable energy projects are best served by seeking “causation,” not “additionality.”
Directors of Sustainability, fearing the EAC market may become as confused and compromised as the carbon offset market, increasingly wish to focus on procurements that, without a doubt, cause new renewable energy capacity. They want to procure Purchaser-Caused Energy Attribute Certificates (PC EACs).
What constitutes PC EACs? We work with Directors of Sustainability who advocate for a simple, three-part test to establish conclusive causation.
- Bundled procurement: Did the pre-financing contract cover the bundled cost of both energy generation and the resulting EACs?
- Sufficient term: Was the procurement commitment for at least ten years?
- Sufficient capacity: Was the procurement for at least 40 MW of new clean capacity?
Informed observers will recognize that procurements passing this test, such as CFD-based VPPAs, have caused an additional clean energy project. But how can a company that does not require 40 MW in a given market procure PC EACs?
Collaboration
Buyer aggregations have broadened the VPPA field by combining multiple smaller electricity loads. They enable high-credit buyers from a range of company sizes to meet minimum load thresholds collectively, democratizing utility-scale clean energy’s environmental and financial benefits.
This approach also benefits developers. With multiple high-credit buyers committed, the project experiences a credit bump compared to contracting one high-credit buyer alone. Its potential market, transaction efficiency and ultimate narrative power grow.
Meanwhile, buyers can hedge their energy risk and even profit, thanks to declining developer cost and return requirements and projected rises in realized prices from electrification and artificial intelligence. While no informed director of sustainability procures PC EACs for profit, expertly developed and managed CFDs often boast positive financials over the procurement term, minimizing EAC portfolio costs. VPPA 2.0 procurements are directly causing new renewables at an ever-growing scale—first in the U.S. and Europe and now, increasingly, in the Asia Pacific.
Emissionality
After directors of sustainability prioritize PC EACs, many will want to optimize their procurement further through emissionality, a term coined by WattTime, an environmental tech non-profit founded by Berkeley researchers. Emissionality is an emissions-first approach that targets the most carbon-intensive grids within the enterprise’s carbon accounting region to maximize a procurement’s carbon abatement.
We have seen companies and cities in Greater Boston procure renewable energy in southern Illinois, where MISO’s coal-fired power generation means their PC EACs will reduce more emissions than if procured on Massachusetts’ cleaner grid. By factoring geographic emissions intensity into location selection, one company’s renewable procurement becomes an opportunity for shared impact.
We expect emissions-first procurements to boost VPPA demand in North Carolina, Poland and other grids with continued coal reliance.
Remaining impediments: Labels and accounting standards
We see demand for purchaser-caused, emissions-first clean energy procurement rising fast. But barriers remain–and not just in the new administration. Directors of sustainability emphasize that in 2025, corporate sustainability needs more accurate labels and carbon accounting standards for renewable energy procurement.
Currently, regulatory and standard-setting bodies fail to distinguish EACs differences. This oversight is grossly counterproductive. In EAC markets, quality correlates with price and effort. The bare minimum should not receive the same market-based credit as investing extra effort to make a concrete difference. Systematically acknowledging PC EAC procurements would create the demand signal needed to inflect procurement toward the proximate causation of new clean energy we so painfully need.
Advancing the UAE Consensus
COP28’s United Arab Emirates (UAE) Consensus recognized that “tripling up” on new clean energy capacity and “doubling down” on energy efficiency through 2030 is the global economy’s best chance to avoid human-caused climate breakdown’s most ruinous effects. Even without new technology or aggressive public policy, centering burgeoning municipal, corporate, healthcare, university, and enterprise procurement of clean electricity on causation, collaboration, and emissionality will give the world a real chance to meet that TripleUp goal.
Jim Boyle is the CEO and founder of Sustainability Roundtable, Inc., a for-profit Public Benefit Corporation and certified B Corp with a mission to accelerate the growth and adoption of best practices in more sustainable business to help align business with life. Boyle has over two decades of experience in the sustainability and energy markets fields, helping organizations contribute to the future of clean energy and sustainable business practices.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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