Renewables Glossary


The fuels averaging, banking, and trading (ABT) credit system that establishes a gasoline sulfur standard.


A specific property attributed to an energy certificate. Attributes vary by type of certificate. Examples include vintage, eligibility, class, biofuels equivalence value, and renewable fuel category.

Block Option

A power purchase agreement (PPA) that requires physical delivery of energy and RECs.

Bundled RECs

When RECs are sold with their associated energy.

Carbon Credit

Any tradable certificate that represents the right to emit a certain amount of carbon dioxide or other greenhouse gas.

A carbon credit is measurable and verifiable.

Carbon Market

A marketplace where buyers and sellers specifically trade carbon credits or renewable credits.

Carbon Offset Credit

A financial instrument that is certified by governments or independent certification bodies. It is transferable, so a purchaser "retires" it to count against their own greenhouse gas reduction goals.

Each carbon offset credit represents an emission reduction of one metric ton of carbon dioxide or other greenhouse gas.

Certain activities, typically projects, produce carbon offset credits. These can include capturing and destroying high-potency greenhouse gases, reforestation, building renewable energy generation like solar farms, and waste-to-energy projects.


Specific definitions of class vary by jurisdiction. The below breakdown is one example:

New renewable energy sources (wind energy, solar energy, tidal energy, biomass fuels, methane, or hydrogen) or useful thermal energy (geothermal systems, solar-thermal systems, and eligible biomass generators) in which generator began operation after January 1, 2013.

New solar sources in which generator began operation after January 1, 2006.

Existing biomass / methane energy sources of 25 MW or less and methane gas in which generator began operation before January 1, 2006.

Existing small hydroelectric with hydro facilities up to 5 MW in which generator began after January 1, 2006 in compliance with environmental protection criteria and hydroelectric facilities up to 1 MW that are interconnected to the distribution grid in New Hampshire.

Compliance Carbon Markets

Markets where there are a certain number of carbon credits issued to each company on a yearly basis. These markets are non-voluntary, as companies are required to fulfill them.


The period in which a credit is allowed to offset emissions.

Epa Moderated Transaction System (eMTS)

A database of RIN transactions.

Emissions Trading System (ETS)

A market mechanism that regulates the emission of greenhouse gases amongst entities, including companies, countries, and manufacturers. The EU ETS operates on a 'cap-and-trade' principle which limits the amount of greenhouse emissions each year. These regulated entities can then buy or receive emission allowances, and then trade them amongst each other.

Energy Efficiency Certificate (EECs)

EECs are also known as white tags.

Each EEC represents a MWh of energy consumption reduced via an energy efficient activity.

Energy Attributes Certificates

A certificate that guarantees a renewable source produced electricity. The certificate indicates how, when, and where the electricity was generated. EAC is an umbrella term for regional types of certificates including RECs and GOs.

Each EAC represents 1MWh generated and injected to the grid.

Energy Resource

Produces heat or power. Examples of this include nuclear energy, natural gas, and solar energy. They are converted into consumable energy, such as electricity.

Energy Year (EY)

A twelve-month period. The start and end dates will vary by jurisdiction. For example, an energy year may start June 1st and end May 31st the following year every year.


A marketplace where things are traded between buyers and sellers. Participants can buy or sell physical commodities, derivatives such as options, and other financial instruments.


When a renewable certificate will expire. Different registries, classes, and geographies have different expiry protocols. For example, eligibility to use RECs might end at the end of the fifth calendar year after generation or a Class I REC might expire after the two energy years following the year it was generated. RINs expire in the following compliance year after generation.

Fuel Category

An attribute relevant to RIN certificates. It specifies what kind of fuel pathway was used. Options are advanced biofuel, biomass-based diesel, cellulosic biofuel, and renewable fuel.

Green Tariff

Optional programs in regulated electricity markets, which allow companies to buy bundled renewable electricity from a specific project at a special utility tariff rate.

Guarantee of Origin - GO (EU version of the REC)

A renewable energy credit or tradable commodity that represents a claim to the environmental benefits associated with renewable power generation.

Low Carbon Fuel Standard (LCFS)

Relates specifically to fuel for California transportation. It was designed to incentivize use of electricity and hydrogen to lower dependency on fossil fuels.

Each LCF credit represents one metric ton of carbon dioxide reduced.


The process that makes a REC official.

Power Purchase Agreement (PPA)

A long-term contract (frequently 10 - 20 years) that a buyer is going to purchase electricity or wind energy at a pre-agreed price for a pre-agreed period. Terms include delivery point, delivery date, length of contract, penalties, price, termination conditions, and volume. The contract may also include a purchase of RECs.


The origin or history of ownership.

Regional Greenhouse Gas Initiative (RGGI)

The first 'cap-and-invest' regional initiative implemented in the United States to regulate and reduce carbon emissions from the power sector.

It is a cooperative, market-based effort amongst Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia.


A tracking system that regulators and market participants can use for verification. Participants can use a registry to to create and track renewable certificates.

Renewable Energy Credits (REC)

REC stands for renewable energy credit. RECs are used for compliance reporting and voluntary consumption. A REC guarantees that a renewable source generated a particular volume of electricity.

Renewable Diesel

A biomass-derived fuel for diesel engines that aligns with the United States' ASTM D975 specification for petroleum and Europe's EN 590 standard.

Renewable Identification Number (RIN)

Credits the Environmental Protection Agency (EPA) uses to track renewable transportation fuels. The credits are used for compliance of obligated parties. A RIN is 38 digits.

Each RIN represents one physical gallon of renewable fuel produced or imported to the US.

Renewable Natural Gas (RNG)

A pipeline-quality biogas that is suitable for natural gas vehicles and can be used as compressed natural gas (CNG) or liquefied natural gas (LNG).


When a certificate has been used and can no longer be sold. Whoever owns it retains ownership forever. The owner cannot use it again for compliance purposes. How retirement will occur is not entirely clear, even within one category of renewables certificates, so it's important that buyers confirm what will happen with the seller. There are also nuances for retirement from one type of credit to another. For example, retirement of RINs must be submitted to the EPA in a transaction report. Retirement of RECs exist in tracking systems. Making a claim will retire the REC.

Sleeve or Sleeved PPA

A PPA in which an intermediary utility manages the transfer of money and energy to and from a renewable energy project on the buyer's behalf. Sleeved PPAs are more common in deregulated electricity markets.

Unbundled RECs

When RECs are sold separately from their associated energy.


The date the REC was created.

Virtual Power Purchase Agreement (VPPA)

A version of a PPA that Is used when physical delivery Isn't possible due to a utility monopoly. VPPAs are considered swap trades.

Voluntary Carbon Markets

Markets where carbon credits are purchased for voluntary use rather than to comply with legally binding emissions reduction regulations. Voluntary carbon markets are driven by the demand of businesses looking to offset their carbon emissions.

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