What is the difference between offsets and RECs?

The distinction can be confusing, but it’s important. Renewable Energy Credits (RECs) and carbon offsets are both environmental commodities that can help people reduce their climate impact. But while RECs can come from any renewable electricity project, offsets can only come from projects that go beyond business-as-usual.

RECs are a way to separate the environmental attributes of electricity generation from the physical electrons. A REC is the property rights to the “renewableness” of one megawatt-hour of electricity. Every renewable electricity plant generates one REC each time it generates a megawatt-hour of electricity. When you buy a REC, you’re essentially buying clean electricity.

Offsets represent greenhouse gas reductions and are measured in tons of carbon dioxide equivalent (CO₂e). They can come from any project that reduces greenhouse gases beyond business-as-usual, including renewable energy projects as well as other projects like cow power.

The most important difference between RECs and offsets is that offsets can only come from projects that go beyond business-as-usual, but RECs can come from any renewable electricity project. When you buy an offset, you know the greenhouse gas reductions it represents would never have happened if customers like you didn’t buy offsets. With RECs, there’s no such guarantee. Because of this difference, RECs can only be converted to offsets if they come from a project that goes beyond business-as-usual.

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