Energy transition-focused non-profits RMI and Energy Web announced today the release of a new draft approach aimed at evaluating the material impact of renewable energy purchases made by companies on mitigating emissions.
Targeted at electricity intensive industries, the approach is designed to be applicable to any sector. Energy Web and RMI stated that the approach is currently in trials with bitcoin miners, and Energy Web aims to use the approach for the development of a certification initiative to enable the assessment of bitcoin miners’ green credentials by investors, regulators and customers.
Jesse Morris, CEO of Energy Web, said:
“Environmental criteria consider how a company performs as a steward of nature. More, Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. More, and Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. More factors are top of mind for senior decision makers and corporate boards in every industry, including crypto. While this approach is fit for use across any number of industries, bitcoin in particular stands to benefit. Numerous bitcoin miners advised our initial work shaping this approach, and the resulting certification initiative will support them and others in their desire to demonstrate sustainability credentials through a credible independent process.”
According to Energy Web and RMI, the new approach aims to address the challenges in determining the real-world impact of market-based renewable energy purchases through tools such as RECs, by assessing both the specific emissions generated by the purchaser’s operations and the emissions mitigated by the RECs. As an example, the organizations noted that investing in new solar facilities in coal-heavy areas such as Poland or India would generate a more significant impact than purchasing RECs from an existing plant in California.
For its bitcoin mining certification, Energy Web said that the approach would calculate the carbon intensity of the energy used for mining, taking into account the grid location of the operations, as well as the material impact of any purchased renewable energy. These factors would contribute to a score to each miner or hosting facility, which would be used for the certification.
Josh Henretig, Managing Director of the Climate Intelligence Program at RMI, said:
“The approach we have developed has the potential to transform carbon disclosure and sustainability reporting in any sector that uses market-based mechanisms to procure renewable energy. As governments and regulators around the world seek to tackle false sustainability claims, this issue is set to remain top of mind for global decision makers. Picking up where REC markets fall short, this solution engenders greater transparency and verifiability of impact than anything that has come before.”
RMI and Energy Web have launched a 30-day consultation on the new draft approach.