Clean energy certificates continue growing despite curtailments

Issuance of I-RECs in Brazil during first half of 2026 has already surpassed last year’s total

By Ludmylla Rocha

 — São Paulo

08/07/2026 03:00 PM  Atualizado há 2 semanas

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The market for renewable energy certificates is proving resilient despite the challenges facing clean power generation in Brazil. In the first half of the year alone, more than 65 million international certificates, known as I-RECs, were issued in the country, surpassing the total recorded for all of 2025. 

Each certificate corresponds to 1 megawatt-hour of renewable electricity. Companies purchase them to offset greenhouse gas emissions associated with their electricity consumption, which fall under so-called Scope 2 emissions under the Greenhouse Gas Protocol. 

Data from Instituto Totum, the local issuer of the certificates, show that neither renewable energy curtailment—the reduction of renewable power generation for system-related reasons—nor the scaling back of decarbonization targets by some global corporations has affected the Brazilian market, which, according to preliminary estimates, generates about R$200 million a year. 

“Figures from the past five years show that Brazil’s I-REC market continues to expand rapidly, driven by the combination of growing renewable generation, corporate sustainability targets and increasing demand for proof of renewable electricity consumption,” said Fernando Giachini Lopes, chief executive of Instituto Totum.

He explained that, in theory, because I-RECs are issued based on electricity actually generated, renewable curtailment reduces the potential supply of certificates. In practice, however, that has not been reflected in the market. 

“Companies are not required to register all of their power plants to generate certificates. They only register enough capacity to match demand. Because of curtailment, they have added more plants than would normally have been the case. Companies had to bring additional facilities into the system, which is why certificate issuance has not declined despite the generation cuts. In fact, it is likely to increase by around 15% to 20% this year,” he estimated, taking into account the seasonal pattern of the second half.

That assessment is shared by Fellipe D’Alcantara, trading director at Comerc Energia. The company said it has traded about 36 million I-RECs over the past five years. In 2023, together with its then-controlling shareholder Vibra Energia, it launched a carbon credit trading desk dedicated to transactions in these environmental markets. 

“So far, Comerc believes the overall impact on the dynamics of Brazil’s I-REC market has been limited. This reflects the country’s power mix, which has a strong share of renewable sources, and a supply of certificates that continues to exceed demand,” he said. 

Regarding decarbonization targets, the executive acknowledged that companies that adopted them in response to external pressure—such as demands from supply chains or customers—may review their timelines and priorities. 

“Even so, we have not seen any meaningful pullback among clients with more established climate agendas. What we are seeing is greater selectivity: companies are seeking solutions that are better aligned with their targets, offer greater traceability and are more consistent with their sustainability narratives,” he said. 

Another market participant, Axia Energia, noted that because its generation portfolio is made up predominantly of hydroelectric plants, “it benefits from operational flexibility and a broad portfolio capable of meeting market demand,” said the company’s certificate manager, Cecilia Essinger. In addition to wind, hydro and solar power, electricity generated from biomass also qualifies for certification. 

The company, which generated 11.9 million I-RECs in 2025 alone, also said the market has attracted new entrants, particularly small and medium-sized companies. 

“This may be linked to the need to meet the expectations of suppliers, customers and other stakeholders, creating a positive externality for brand perception,” Essinger added. 

Despite the favorable outlook, Totum’s chief executive said addressing renewable curtailment and expanding the electricity transmission infrastructure remain “central issues to ensure the sector continues its growth trajectory in the coming years.” He also pointed to the ongoing revision of the Greenhouse Gas Protocol’s Scope 2 guidance as an issue requiring close attention. 

“The proposals under discussion point to a trend toward stricter traceability requirements for renewable energy attributes,” he said. According to Lopes, the new approach would require certificates such as I-RECs to be linked to the same electricity market—meaning the same submarket or a compatible delivery area—as the reported electricity consumption, while also introducing the concept of hourly matching. 

“If these changes are implemented, they will have significant implications for environmental attribute procurement strategies, certificate pricing and the way Scope 2 emissions are reported. This trend reinforces the importance of robust traceability markets such as I-REC and could increase demand for certificates with greater temporal and geographic granularity,” he concluded.