Carbon Credit vs REC (Renewable Energy Certificate) — Key Differences
For Indian companies working on ESG compliance and net-zero goals, understanding the difference between Carbon Credits and RECs is critical to making the right investment.
What is a Carbon Credit? A carbon credit represents the **removal or reduction of 1 metric ton of CO₂** from the atmosphere. Sources include soil carbon sequestration (farming), reforestation, methane capture, etc.
**Use case:** Offsets Scope 1, 2, and 3 emissions. Ideal for companies with large carbon footprints from manufacturing, logistics, and operations.
What is a Renewable Energy Certificate (REC)? A REC represents **1 MWh (megawatt-hour) of electricity generated from renewable sources** (solar, wind, hydro). It certifies that renewable energy was added to the grid.
**Use case:** Offsets Scope 2 (electricity) emissions only. Ideal for companies seeking to claim renewable electricity usage.
Key Comparison Table
| Feature | Carbon Credit | REC | |---------|--------------|-----| | What it represents | 1 ton CO₂ removed | 1 MWh renewable electricity | | Scope covered | 1, 2, 3 | Scope 2 only | | Source | Agriculture, forestry, methane | Solar, wind, hydro | | Price in India | ₹500–₹4,000/ton | ₹1–₹3/REC | | Best for | Full carbon offset | Green electricity claims |
What Should Indian Companies Buy?
For robust ESG and BRSR reporting, companies should consider **both**: RECs for electricity (Scope 2) and Carbon Credits for remaining emissions (Scope 1 & 3). BuyCarbonCredit.in provides direct access to verified Carbon Credits from Indian farmers for Scope 1 and 3 offsets.