Institutional frameworks for renewable energy certificates: Insights from Japan and South Korea
Journal
Energy Reports
Journal Volume
13
Start Page
5792
End Page
5801
ISSN
2352-4847
Date Issued
2025-06
Author(s)
Chen, Kuan-Ting
Abstract
Policy instruments significantly shape a nation's energy transition success. Trends like green supply chains, the EU's Carbon Border Adjustment Mechanism (CBAM), and corporate sustainability efforts have prompted market-oriented countries to adopt Renewable Energy Certificates (REC) to enhance competitiveness and meet emissions targets, especially in manufacturing-heavy economies. This study examines the functional differences among Feed-in Tariffs (FIT), Renewable Portfolio Standards (RPS), and REC, traces the historical development of RECs, and evaluates their implementation in Japan and South Korea using academic studies, technical reports, official documents, and grey literature. The key insights derived from the analysis are as follows. First, REC, FIT, and RPS all play critical roles in advancing energy transitions and reducing carbon emissions. However, RECs uniquely serve as a high-precision tool for corporations to calculate Scope 2 greenhouse gas emissions, particularly when compared to carbon offset mechanisms. Second, the development processes and trajectories of REC systems in Japan and South Korea demonstrate that, in nations dominated by manufacturing or export-oriented industries, effective communication among international sustainability organizations, governments, and industry stakeholders facilitates the strategic alignment of policy adjustments. Third, voluntary REC markets can accelerate investments in renewable energy and incentivize corporate adoption of renewables, whereas mandatory REC markets are more effective in expanding overall market scale. Fourth, certificates have emerged as a fundamental component of a country's renewable energy policy toolkit.
Subjects
Green supply chain
Renewable energy certificates
Renewable energy policy instruments
Scope 2 carbon emissions
Publisher
Elsevier BV
Type
journal article