Across Latin America and parts of the Caribbean, corporate decarbonization is accelerating at a pace few anticipated even five years ago. Expanding renewable infrastructure, growing regulatory expectations, and rising investor scrutiny have combined to push companies toward credible market-based instruments that can demonstrate measurable progress. International Renewable Energy Certificates, better known as I-RECs, have emerged as the primary tool for organizations operating in regions where local energy attribute certificate systems are either underdeveloped or not yet established.

The appeal of I-RECs lies in their simplicity and versatility. They provide a standardized, internationally recognized way for companies to verify renewable electricity usage in markets where grid transparency is low and renewable procurement options are limited. For multinational firms with global reporting obligations, I-RECs offer consistency. For local entities seeking to align with international sustainability standards, they offer access to a decarbonization pathway that does not require physical renewable energy procurement or large-scale capital investment. In this sense, they serve as a bridge between evolving power markets and ambitious climate strategies.

Throughout 2025, demand for I-RECs in the Americas has grown sharply. Companies pursuing Science Based Targets are using them to address Scope 2 emissions in markets such as Brazil, Chile, Colombia, Peru, and Mexico. These countries are experiencing rapid industrial growth and increasing pressure to disclose environmental performance. At the same time, energy systems in many emerging markets remain carbon intensive, meaning the emissions associated with purchased electricity represent a significant portion of a company’s footprint. I-RECs provide a timely and scalable mechanism for addressing this challenge.

However, the rise of I-RECs is occurring at a moment of widening policy divergence across the Americas. Brazil, for example, has taken significant steps to formalize its renewable energy certificate market and is expected to play an increasingly influential role in the region. Mexico continues to experience regulatory uncertainty in the energy sector, which has increased the importance of market-based instruments for companies seeking credible alternatives to government-driven renewable procurement. And in Colombia, where renewable development has accelerated sharply, I-REC prices reflect a growing supply base but also the influence of long-term macroeconomic volatility.

For buyers, these regional differences carry strategic implications. Market maturity determines certificate pricing, availability, and overall stability. In emerging markets with strong hydropower resources, I-RECs may be abundant and competitively priced. In others, supply constraints or political uncertainty can create volatility. Corporations seeking to use I-RECs at scale must understand not only the mechanics of the certificates, but also the long-term dynamics of the markets in which they originate. Certificates are not created equal, and their origin can influence both risk exposure and claim credibility.

The Americas also illustrate a second complexity that companies must manage: the growing focus on premium attributes. Traditional I-RECs represent a megawatt hour of renewable electricity without additional environmental characteristics. Increasingly, however, buyers are looking for attributes that reflect technology type, location, social impact, or emissions displacement. Certificates from wind and solar projects, for example, tend to be preferred by companies that want clear alignment with decarbonization claims, while hydropower certificates may require additional due diligence depending on the project structure. Some buyers go further, prioritizing projects with demonstrated community benefits or additional environmental co-benefits.

This evolution reflects a broader trend in voluntary markets toward thematic procurement. Companies want procurement strategies that tell a story, not just balance an emissions ledger. They want to demonstrate that their decarbonization investments support local communities, accelerate renewable expansion, or bring first-of-a-kind technologies to market. As a result, I-REC portfolios are becoming more nuanced, with some corporations adopting multi-country, multi-technology sourcing strategies that align with both their emissions reductions targets and their broader sustainability objectives.

Despite the progress, companies must recognize that I-RECs remain a market-based instrument that operates in parallel to physical decarbonization. They complement on-site solar, power purchase agreements, and energy efficiency improvements, but they do not replace them. Regulators, investors, and civil society increasingly expect companies to use certificates as part of a broader transition plan rather than as the sole indicator of environmental performance. The organizations positioning themselves most effectively for long-term credibility are those that treat I-RECs as one component of a diversified decarbonization strategy.

AFS Commodities USA plays a central role in helping companies navigate this evolving environment. The firm’s expertise in cross-border renewable markets allows clients to understand the nuances of supply, pricing, and policy dynamics in each country. This insight is essential for companies that want to secure large volumes of certificates, design long-term procurement programs, or integrate I-RECs into broader energy and sustainability strategies. Accurate market intelligence, combined with rigorous supplier vetting and detailed documentation management, ensures that clients can make claims with confidence.

As the Americas continue to expand renewable capacity and as sustainability reporting obligations become more stringent, I-RECs will remain a foundational tool for companies pursuing credible Scope 2 decarbonization. The challenge is no longer whether I-RECs are fit for purpose. It is how to use them strategically among a growing set of renewable options, navigate regional complexities, and build programs that meet both internal performance goals and external expectations.

Market-based decarbonization is entering a more mature phase. Companies that understand the structure, risks, and evolving opportunities in the I-REC market will be better equipped to demonstrate real leadership in an increasingly complex and competitive sustainability landscape.