DECCs

DECCs, or Distributed Energy Carrier Certificates, are a market-based mechanism designed to incentivize the adoption and use of low-carbon energy sources. They operate similarly to Renewable Energy Certificates (RECs) but are specifically focused on energy carriers rather than just electricity generation. This means DECCs can represent a wide range of low-carbon fuels and energy carriers, including hydrogen, sustainable biofuels, and synthetic fuels, in addition to renewable electricity.

The core principle behind DECCs is to create a financial value for the environmental attributes associated with low-carbon energy carriers. Producers of these carriers can generate and sell DECCs to consumers or obligated entities who are looking to meet sustainability targets or comply with regulations. This creates a revenue stream for low-carbon energy producers, making their operations more economically viable and encouraging further investment in the sector.

Consumers or obligated parties purchase DECCs to demonstrate their commitment to using cleaner energy. This can be done voluntarily for corporate social responsibility purposes or to meet specific mandates. The demand for DECCs drives up their price, which in turn makes low-carbon energy carriers more competitive with fossil fuels. The system aims to internalize the environmental costs of carbon emissions, promoting a transition towards a more sustainable energy landscape.

The framework for DECCs can vary depending on the jurisdiction or the specific program implementing them. However, the general concept involves tracking, verifying, and retiring certificates to prevent double-counting and ensure the environmental claims are legitimate. This allows for a transparent and accountable system that supports the decarbonization of various sectors, including transportation and industry, where direct electrification may not always be feasible.