There are multiple ways to switch from fossil fuels to renewable energy (RE) when purchasing electricity. Individuals can opt for green energy programs offered by their electricity provider or buy certificates that guarantee their electricity comes from renewable sources, such as Renewable Energy Certificates (RECs) in the U.S. or Guarantees of Origin (GOs) in Europe. In Australia, programs like GreenPower let consumers choose renewable electricity directly from suppliers. For businesses, the options go even further. Companies can bypass traditional utilities altogether and sign Power Purchase Agreements (PPAs)—long-term contracts with renewable energy generators that ensure a dedicated supply of clean electricity. These mechanisms are more than just accounting tools—they serve as proof of greenhouse gas (GHG) reductions and drive real demand for clean energy.
Purchasing RE in South Korea
In South Korea, companies are currently able to purchase renewable energy through the K-RE100 program. Residential consumers are, unfortunately, unable to participate in this program. Under K-RE100 there are four methods to purchase renewable energy: (1) Green Premium, (2) REC Purchase, (3) PPA Contract, and (4) Self-generation. Of these, Green Premium is the most popular option for companies, as 98% of RE purchased in 2024 has been purchased through Green Premium. This is largely in part because it is the cheapest option (at 10 Won/kWh [0.0068 USD/kWh], in comparison to an REC purchase at 80 Won/kWh [0.054 USD/kWh]).
Figure 1. Ratio of Total Renewable Energy Procurement
In a previous blog post, we discussed Green Premium and critical issues it has such as double-counting emission reductions, an unfair subsidized price, and lack of contribution to expanding renewable energy. As Green Premium is the most popular option for purchasing renewable energy, and we have already identified multiple existing issues, it is clear that we must also verify if this method actually aligns with international standards for emissions accounting.
Green Premium
Figure 2. Green Premium Overview
Compliance with Greenhouse Gas Protocol Scope 2 Guidance
The Greenhouse Gas Protocol Scope 2 Guidance is the most widely used international standard for greenhouse gas emissions accounting and offers a set of quality criteria that must be met for a method of renewable energy purchase to be counted as GHG emissions reduction. These criteria can be found on page 60 of the Scope 2 Guidance report and are summarized below along with our analysis of whether Green Premium meets the quality criteria. A more detailed analysis can be read in our recently published report “South Korea's Green Premium – Out of Synch with Global GHG Protocol Standards.”
Table 1. South Korea’s Green Premium Quality Criteria Compliance Summary
To ensure credible emissions accounting, meaning that (1) the emission reductions are only counted once and that (2) the emissions reduction actually occurred, the mechanisms must meet certain standards. As can be seen in the table above, Green Premium largely does not align with the Scope 2 Quality Criteria. This calls into question the validity of using Green Premium to claim emissions reduction from its purchase, which many companies in South Korea participating in the K-RE100 program currently do. These companies include Samsung Electronics, SK Hynix, LG Energy Solutions, and more.
The main issues with Green Premium according to the Greenhouse Gas Protocol Scope 2 Guidance can be summarized in three main points: (1) Multiple certificates, (2) Missing Data, and (3) Lack of Transparency.
Multiple Certificates
The K-RE100 program issues two certificates: Renewable Energy Certificate (for generators) and Confirmation of Renewable Energy Use (for buyers).
Scope 2 Guidance requires only one certificate to claim GHG reductions when multiple exist.
Neither K-RE100 certificate explicitly claims GHG emissions reduction, creating ambiguity.
Missing Data
Transparent and accessible information is essential for credible renewable energy use and GHG accounting.
Scope 2 Guidance requires certificates to directly convey the GHG emission claim, but neither of South Korea’s certificates, the REC or the Confirmation of Renewable Energy Use, do this.
When multiple certificates exist, one must be designated to convey emissions claims per the GHG Protocol.
A residual emissions factor* is needed to prevent double counting, but South Korea lacks this, forcing companies to use a national emission rate that includes all renewable generation.
*Residual emissions factor: GHG emission rate of electricity use when all renewable energy generation that has had claims to it sold off has been removed from the calculation. This emission is higher than the average emission rate for electricity.
Lack of Transparency
Scope 2 Quality Criteria requires renewable tariffs to be backed by RECs owned by the seller, usually a utility.
Korea Electric Power Corporation (KEPCO) has not disclosed its REC ownership or usage for Green Premium, making verification difficult.
Green Premium’s calculation method does not reference RECs, instead estimating availability based on planned renewable generation.
This approach risks double counting emission reductions, as it may include energy already tied to sold RECs or PPA contracts.
Implications
Green Premium fails to comply with international greenhouse gas accounting standards. Korean companies relying on it for emission reductions risk losing sustainability-focused customers, potentially harming their global competitiveness. Beyond this, Green Premium raises concerns like double counting, unfairly low pricing, and minimal impact on renewable energy expansion—offering no real progress toward climate goals.
More credible alternatives, such as PPA contracts, allow companies to directly claim GHG reductions. However, South Korea’s limited renewable energy expansion remains a barrier. To ensure corporate renewable energy purchases drive real climate action, the government must accelerate renewable energy development.
