The Johannesburg Stock Exchange (JSE) has launched international renewable energy certificates (IRECs) providing South African companies with a new mechanism to offset electricity-related emissions and advance their net-zero targets.
The move marks a step in broadening sustainability options for businesses, particularly those seeking renewable energy alternatives to mitigate their carbon footprints. IRECs enable companies to offset their scope 2 emissions – those linked to electricity supplied by third parties – by purchasing certificates representing renewable energy generation.
The centralised marketplace for carbon credits and IRECs will help South African companies accelerate their decarbonisation strategies, says Russell Karas, Senior Vice President at Xpansiv. “We expect this is the first step in developing robust markets for carbon credits and IRECs, which will enable South African companies to accelerate their net-zero programmes and meet compliance requirements.”
The introduction of IRECs coincides with the first trades of carbon credits on the JSE Ventures Voluntary Carbon Market – a platform launched in collaboration with Xpansiv. These credits, eligible for offsetting South Africa’s carbon tax, saw 10 000 units trade at U$8,25 per credit (approximately 80% of the current carbon tax rate of R190 per ton).
South Africa introduced its carbon tax in June 2019, allowing companies to use approved carbon credits to offset a portion of their tax obligations. The addition of IRECs now offers an alternative mechanism to support corporate sustainability goals through renewable energy procurement.
Since launching their collaboration, JSE Ventures and Xpansiv have been onboarding market participants, connecting project developers with financiers and working to expand the supply of environmental credits from the region.
“We believe this is only the start and look forward to many more transactions on the platform. This is an open invitation to all South African corporates who are exposed to the carbon tax to reach out to us to access eligible offsets,” says JSE Capital Markets Director Valdene Reddy.
