Technical Notes of Conceptual Regional REC Framework for BIMP-EAGA Countries

Summary

This report explores the development of a conceptual regional Renewable Energy Certificate (REC) framework for the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA). Reflecting insights from stakeholder dialogues and meetings conducted through RECAP activities over the past two years, the report introduces RECs, their historical context, and their crucial role in substantiating renewable electricity consumption claims. RECs and carbon credits, though related, serve distinct purposes. While voluntary REC markets are primarily driven by corporate sustainability goals, the mechanics of REC systems are explained in depth, focusing on how they track renewable electricity generation and consumption, supporting entity-level Scope 2 carbon accounting.

Additionally, the report examines each BIMP-EAGA country’s REC market, including Brunei Darussalam, where the market is still in its infancy; Indonesia, with a rapidly growing market and active participants; Malaysia, known for its well-established REC ecosystem; and the Philippines, with a compliance-based REC market tied to its Renewable Portfolio Standards (RPS). The dynamics of compliance and voluntary markets are discussed, with an emphasis on regulatory landscapes and market potential.

Key recommendations include establishing an ASEAN REC Taskforce, developing a regional REC framework, prioritising a hybrid approach, empowering local issuers, and focusing on capacity-building efforts to ensure successful regional REC market integration and the acceleration of clean energy transitions in BIMP-EAGA and ASEAN.