What is an Environmental Commodity?

An environmental commodity is an umbrella term referring to any tradable instrument with market demand that carries a standardised environmental purpose within a regulatory or voluntary framework. Environmental commodities include carbon credits, emissions allowances, and Energy Attribute Certificates (EACs) .

EACs are the electricity-specific subclass: one certificate represents the attributes of 1 megawatt-hour (MWh) of generation, vary by region, and supports renewable electricity usage claims when cancelled. Whilst they are both environmental commodities, carbon credits not the same as EACs, they are different: they represent quantified greenhouse gas reductions or removals (usually 1 tonne CO₂e) and are used to offset residual emissions (Scope 1 & 3), not to evidence renewable electricity sourcing for ‍ market-based ( Scope 2 ) disclosure.

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