I-REC Labels in Japan Get Major Update Amid Record Growth

The International Tracking Standard Foundation (I-TRACK) has issued updated labelling guidance for International Renewable Energy Certificates (I-RECs) in Japan, aiming to resolve long-standing confusion around how certificates interact with the country's complex domestic Energy Attribute Certificate (EAC) framework — particularly the Feed-in Tariff Non-Fossil Certificates (FiT NFCs).

The clarification comes as Japan's I-REC issuance, administered by the accredited national issuer Local Good, continues its upward trajectory. Since the first certificates were issued in mid-2021, volumes have grown steadily — though Japan remains a minor player in absolute terms relative to markets like Brazil, the UAE, and Türkiye. The new labelling framework explicitly delineates how I-REC(E) certificates should be classified when issued alongside, or in lieu of, domestic instruments, addressing persistent market uncertainty.

Japan's Multi-Layered EAC Ecosystem

Japan hosts four coexisting renewable energy certificate schemes: FiT Non-Fossil Certificates (NFCs), non-FiT NFCs, Green Electricity Certificates (GECs), J-Credits, and I-RECs. This complexity — unmatched in any other Asian market — has long deterred multinational corporates seeking streamlined Scope 2 reporting. The Ministry of Economy, Trade and Industry (METI) has progressively loosened I-REC issuance criteria since 2021, most notably by permitting I-REC(E) issuance for bilateral contracts involving FiT-supported facilities, provided that end-users retire both the FiT NFC and the I-REC(E) to avoid double counting.

The updated labelling guidance now requires that any I-REC(E) issued from a device that also generates FiT NFCs must carry a specific "FiT-linked" label. This label signals to buyers and auditors that the certificate's environmental claim is conditional on the concurrent retirement of the corresponding FiT NFC — a safeguard critical for maintaining market integrity.

Global I-REC Issuance Continues to Surge

The Japanese developments unfold against a backdrop of explosive global I-REC growth. Through the first seven months of 2025, approximately 227 million I-REC(E) certificates were issued worldwide — a 12% increase over the same period in 2024. Redemptions reached 187 million, up 8% year-on-year. Brazil led all markets with 54 million certificates issued, while Saudi Arabia saw issuance more than double from 5.3 million in 2024 to over 11 million.

Implications for Corporate Buyers

For RE100 members and CDP-reporting corporates with operations in Japan, the updated guidance offers both clarity and caution. The "FiT-linked" label strengthens the credibility of I-REC-based renewable energy claims in Japan by enforcing transparent dual-retirement. However, it also adds a procurement step: buyers must now verify that both instruments have been retired in tandem. With Japan's Seventh Strategic Energy Plan targeting up to 50% renewable electricity by 2040 and corporate PPA activity accelerating, the I-REC market in Japan — though still small in volume — is positioned for meaningful expansion in the years ahead.

As the I-TRACK Foundation continues to expand its product codes — including pre-accredited standards for hydrogen, biogas, and carbon dioxide removal — the Japan precedent will likely inform how labelling frameworks are designed for these new certificate categories in regulated markets worldwide.