The renewable energy certificate (REC) market is gaining momentum as global policymakers and corporations push for cleaner energy targets. Forecasts show potential growth to well into the tens of billions by 2035, driven by regulatory mandates, expanding renewable capacity, and sustainability commitments.

The Renewable Energy Certificate Market is gaining notable traction as governments, corporations, and power producers intensify efforts to meet renewable energy targets and compliance obligations, according to Ameco Research. The Renewable Energy Certificate Market forecasts point to sustained expansion over the next decade, underpinned by increasing renewable generation capacity, regulatory mandates, and voluntary corporate sustainability commitments.

According to Ameco Research, the global renewable energy certificate (REC) market is experiencing robust growth, with valuations and future projections in 2024 between approximately USD 15 billion and USD 28 billion, with substantial upside potential in long-term forecasts. In terms of certificates issued, the Renewable Energy Certificate Market is predicted to grow at a CAGR of 20.2% from 2021 to 2028, with 2,175,813 certificates issued in 2020 and 9,298,511 certificates issued by 2028.

Renewable Energy Certificate Market Growth Forecast

• CAGR Prediction (2021-2028): The Renewable Energy Certificate market is projected to grow at a compound annual growth rate (CAGR) of ~20.2% during 2021-2028.
• Certificates Issued in 2020: Approximately 2,175,813 MWh (or certificates) were issued globally in 2020.
• Certificates Estimated by 2028: Forecasts project that certificate issuance could reach around 9,298,511 MWh by 2028 — indicating strong expansion in renewable generation and certification activity.

What Are Renewable Energy Certificates?

Renewable Energy Certificates (RECs) are tradable instruments representing the environmental attributes of one megawatt-hour (MWh) of electricity generated from renewable resources. RECs serve as a mechanism for utilities, corporations, and other power consumers to demonstrate compliance with renewable portfolio standards (RPS) or support voluntary green energy goals.

By separating the renewable attribute from the physical electricity, RECs enable market participants to purchase the environmental value of renewable energy even when they cannot directly source clean power from the grid.

Renewable Energy Certificate Market Drivers

Several factors are contributing to the accelerating growth of the renewable energy certificate market:

Regulatory Mandates and Policy Frameworks

National and regional renewable energy targets, including RPS programs in North America and the EU's stringent climate policies, continue to drive demand for RECs as compliance instruments. These programs compel utilities and energy users to source a defined share of power from renewable sources, boosting REC issuance and trading activity.

Corporate Sustainability Initiatives

More corporations are setting net-zero and carbon-neutral goals. RECs are an essential tool for companies seeking to credibly claim renewable energy use across operations, particularly in jurisdictions where direct renewable procurement remains challenging.

Increasing Renewable Capacity

Global renewable electricity generation — led by solar and wind — continues to grow rapidly as countries expand low-carbon infrastructure. This expansion naturally supports higher REC issuance, underpinning market liquidity and trading volumes.

Market Liberalization and Technology Integration

Developments in blockchain and digital tracking technologies are improving transparency and efficiency in REC markets, reducing fraud and transaction friction.

Renewable Energy Certificate Market Regional Outlook

North America remains a significant force, driven by regulatory frameworks such as Renewable Portfolio Standards and corporate renewable procurement programs. The region's REC market has been one of the most dynamic, supported by robust renewable deployment and demand for compliance instruments.

Europe's REC market is buoyed by comprehensive climate targets and initiatives like the EU's Renewable Energy Directive, which aim to increase renewable penetration and emissions reductions across member states.

Asia-Pacific is emerging as a high-growth region, propelled by rapid renewable capacity additions in China, Japan, and Australia. Policy reforms and investment in renewable infrastructure are accelerating REC market development.

Other emerging markets in Latin America, the Middle East, and Africa are gaining traction, particularly where governments and utilities are adopting renewable targets and incentive schemes.

Renewable Energy Certificate Market Trends: Compliance vs. Voluntary Markets

The REC market can broadly be segmented into compliance and voluntary categories:

• Compliance RECs are driven by legal or policy mandates. Utilities and power suppliers must purchase or produce a share of renewable generation, stimulating demand for compliance certificates.
• Voluntary RECs are acquired by corporations and consumers seeking to demonstrate a commitment to sustainability beyond regulatory requirements.

Both segments are expanding, with compliance markets often offering steady base demand while voluntary markets introduce flexibility and broader participation from non-utility entities.

Challenges and Market Resilience

Despite strong growth projections, the REC market faces challenges:

• Policy and Regulatory Complexity: Differences in REC definitions, tracking systems, and cross-border recognition can complicate market participation.
• Price Volatility: REC prices can fluctuate based on supply dynamics, policy changes, and variations in compliance requirements.
• Integration with Power Markets: Aligning REC trading with energy market operations and physical generation profiles remains technically complex.

Nevertheless, ongoing policy refinement and technological innovation continue to enhance market robustness and investor confidence.

Renewable Energy Certificate Market Future Outlook

The renewable energy certificate market is positioned for sustained expansion, driven by global decarbonization efforts, the proliferation of renewable generation, and the growing integration of RECs into corporate sustainability strategies. As governments tighten clean energy mandates and companies ramp up renewable commitments, RECs will remain a pivotal component of the energy transition toolkit.

Given the breadth of growth projections — from mid-range forecasts targeting tens of billions by 2030 to long-term estimates exceeding USD 180 billion by the mid-2030s — stakeholders anticipate that REC markets will evolve into deeper, more liquid, and globally harmonized platforms supporting renewable energy growth worldwide. To know more insights on Renewable energy Certificate Market from Ameco Research, request sample pages of report here: https://www.amecoresearch.com/sample/276604