Microsoft accused of concealing true carbon emissions. (Photo: iStock)
The demand for renewable energy is being driven up by artificial intelligence (AI), with companies like Microsoft and Meta committing to 100% renewable energy. However, the RE100 goal can be achieved through Renewable Energy Certificates (RECs) with unbundled certificates, meaning that companies can claim to use renewable energy by purchasing certificates, even if they are not actually using electricity generated by renewable sources.
What are unbundled renewable energy certificates?
Renewable Energy Certificates (RECs) are like the identity cards for green electricity and come in two forms: "bundled" and "unbundled." In bundled RECs, the certificate and the green electricity are delivered together. Users cannot resell the certificate after claiming the environmental benefits. In unbundled RECs, the certificate and the green electricity are traded separately, allowing users to obtain only the environmental benefits without actually using green electricity. The tech industry is the largest buyer of unbundled RECs.
Bloomberg Green found that in 2022, 52% of the green electricity Amazon claimed to use came from unbundled renewable energy certificates. Without these certificates, Amazon’s actual carbon emissions would have been 8.5 million tons higher, three times more than reported. Meta would no longer be able to claim zero carbon emissions from its electricity use. Microsoft would see an increase of 3.3 million tons in carbon emissions, 11 times more than reported, indicating a serious issue with "greenwashing" in tech companies' electricity usage.
Unbundled green energy certificates are seen as a form of "greenwashing," obscuring the true carbon emissions of these tech giants. They can mislead the public into believing that products have zero carbon emissions or are powered entirely by green energy, turning these certificates into marketing tools.
Bloomberg Green found that in 2022, 52% of the green electricity Amazon claimed to use came from unbundled renewable energy certificates. (Photo: iStock)
AI’s true carbon emissions hided
Silke Mooldijk, a corporate climate responsibility researcher at the NewClimate Institute, states that if tech companies fail to provide transparent information, consumers may not understand the climate impact of AI and may not shift their behavior toward different AI models.
Google, recognizing that unbundled renewable energy certificates do not achieve real emission reductions, has begun to reduce their use and replace them with substantial amounts of clean energy. Even though Google claims to use 100% green electricity, it does not specify particular times or locations where the electricity is zero-carbon. Michael Terrell, Google's Senior Director of Energy and Climate, notes that there is already research questioning the validity of certificates as a substitute for fossil fuel power.
Despite the lower environmental benefits, higher risk of greenwashing, and uncertainty associated with unbundled renewable energy certificates, they still offer benefits such as increased profitability for renewable energy developers, which can promote green energy industry growth. The flexibility in trading quantities and contract terms, as well as the increased liquidity of certificates, make them a popular method in European and American countries.
