Corporate climate targets increasingly depend on supplier action, and buyers are often asking their supply chains to measure emissions, set targets, and procure renewable energy, sometimes as a pre-condition to doing business together.
But there is a gap between what companies are asking suppliers to do, and what suppliers are actually able to do.
Access to the renewable energy market, as it currently operates, is one of those gaps. The renewable energy market wasn’t built with small and mid-size suppliers in mind, and this has real consequences for how far Scope 3 progress can go.
Traditional renewable energy markets were designed with large, sophisticated buyers in mind. Power purchase agreements often require long-term commitments and significant volume that SMEs aren’t able to fulfill.
Even unbundled Energy Attribute Certificates (EACs), which are simpler, are frequently sold through brokers with minimum order sizes. For a supplier buying a few hundred megawatt hours per year, these resources remain out of reach.
Layered on top of this is a knowledge gap. Procuring renewable energy requires a deep understanding of technology type, geography, additionality, and how a purchase will be recognized under frameworks like the Greenhouse Gas Protocol or the Science-Based Targets initiative. Large companies have sustainability teams or consultants to help navigate this; most suppliers do not.
These factors result in a market that is technically accessible to everyone but is practically accessed by only a subset of potential buyers.
When suppliers can’t procure renewable energy, the impact doesn’t stay contained to just their own emissions inventory. A supplier’s Scope 1 and 2 become part of a buyer’s Scope 3 footprint. So if suppliers are locked out of the renewable energy market, buyers can’t claim reductions that depend on supplier action.
This creates a ceiling. A company can set an ambitious Scope 3 target and engage its suppliers using all the available best practices, but progress will still stall once suppliers are asked to do something about their energy use.
Closing the gap in the renewable energy market requires removing the barriers that make it inaccessible in the first place. This could look like:
Some parts of the market are already moving in this direction, driven by the recognition that supplier access is a bottleneck in Scope 3 progress.
Green Project, alongside our parent company ACT Group, has built a renewable energy platform to mobilize suppliers with affordable and intuitive renewable energy procurement, education, measurement, and management tools, regardless of their size or maturity.
Supplier ambition is rarely the limiting factor in renewable energy procurement. There are real barriers to access that keep suppliers, particularly small- and mid-size ones, from participating in renewable energy markets. Until these barriers are mitigated, corporate Scope 3 targets will keep running into the same ceiling.
Closing that gap is central to how we think about supplier decarbonization at Green Project. Get in touch if you’re looking for ways to make renewable energy procurement more accessible across your supply chain.
What is an Energy Attribute Certificate (EAC)?
An EAC is a tradable certificate that represents proof that one megawatt hour of electricity was generated from a renewable source. Purchasing and retiring EACs allows a company to claim the environmental attributes of that renewable generation, which can reduce its market-based Scope 2 emissions.
Why do small suppliers struggle to buy renewable energy?
Traditional renewable energy markets, including many EAC brokers and most power purchase agreements, are built around volume minimums and negotiation cycles. Small and mid-size suppliers often do not have the purchasing volume, capital, or in-house expertise to meet those requirements.
How does supplier-level renewable energy procurement affect Scope 3 emissions?
A supplier's own Scope 1 and 2 reductions, including those achieved through renewable energy procurement, often flow into a buyer's Scope 3 inventory as purchased goods and services emissions. If suppliers cannot access renewable energy markets, buyers cannot realize the Scope 3 reductions that depend on supplier action.
