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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