Brazil surpasses China to become biggest I-REC issuer


Demand for Brazilian international renewable energy certificates (I-RECs) rose to 13.96 TWh in the first quarter from 8.5 TWh a year earlier, making Brazil the largest global market.

The country, helped by its vast hydropower capacity, was also the largest issuer of these certificates at 16.91 TWh.

China redeemed 13.91 TWh, up from 8.6 TWh a year earlier. Turkey remained the third-largest I-REC issuer and redeember, with demand rising to 4.7 TWh from 2.5 TWh in the preceding year.

Lower Chinese power consumption weighed on Chinese I-REC demand. Chinese power demand totalled 1,421 TWh in January-March, down by more than 31% on the year, while Brazilian consumption fell by around 4% on the year to 104 TWh.

Yet, Brazilian I-REC prices remained lower compared with other large markets. Brazilian 2022 vintage wind certificates were trading at about $0.40/MWh in March, compared with $0.70/MWh in China and $0.45/MWh in Turkey.

Latin American I-REC demand totalled 26.16 TWh in the first quarter, up from 17.99 TWh a year earlier, while I-REC supply increased to 34.88 TWh from 22.3 TWh. Regional leading countries consuming I-REC certificates are Chile, with 3.47 TWh certificates redeemed, followed by Colombia with 3.2 TWh.

Global I-REC demand rose to 60 TWh in January-March, up from 36 TWh a year earlier. Total issuances rose by more than 30% to 73 TWh in the first quarter.

The pace of redemptions more than doubled as global corporate carbon disclosure continues to rise, which are the main players involved in redeeming I-RECs to cover scope 2 emissions.

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