Regional Frameworks for Cross-Border Renewable Energy Certificates (RECs) Trading on Grid-to-Grid Transmission Lines: Gap Analysis vis-à-vis International Standards

Highlights

• Demand for RECs in ASEAN is driven by voluntary clean energy goals of corporations, especially multi-national corporations, as well as decarbonisation goals of national governments. Most countries in ASEAN actively trade RECs domestically, largely through international RECs issuers and trading platforms.
• Policy and regulatory gaps prevent cross-border RECs transactions in ASEAN from being considered intra-market transactions. The main identified gaps are: i) Absence of shared Energy Sector Regulations, ii) Need for harmonisation and uniform Adoption of REC Standards, iii) Need of regional governance of best practices.
• RECs associated with cross-border trade on grid-to-grid lines in ASEAN are currently not recognised by international reporting frameworks such as RE100, undermining the value of such trade. The following approaches may be studied in more detail to determine whether they can address the gaps identified: 1) Harmonising RECs Standards, 2) Regulatory Alignment on Power Trade, and 3) Sub-Regional Markets.