Retiring a REC removes one MWh of renewable generation claim from the market, preventing it from being claimed by anyone else. Under the GHG Protocol market-based Scope 2 method, retiring a REC matched to your consumption can support a 100 percent renewable claim. The retire-vs-hold question depends on whether your buying signal contributes to new renewable buildout (additionality) or just churns existing capacity.
Retire vs hold the REC
Retiring removes the REC from the market permanently. The renewable attribute is consumed by the retiring entity and cannot be re-sold.
Holding the REC allows future resale. ESG buyers typically retire because the renewable claim is the value, not future resale arbitrage.
Market-based vs location-based Scope 2
Market-based Scope 2: matches consumption with retired RECs to calculate emissions. Lower emissions if RECs are retired.
Location-based Scope 2: uses the regional grid emissions factor regardless of REC purchases. Higher emissions in fossil-heavy grids. Most ESG reports show both methods.
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When to retire vs hold?
Market-based vs location-based?
Is an unbundled REC worth less?
Does SEC climate rule require REC retirement?
Further reading