Key takeaways

• Supplier readiness across APAC varies, so corporate buyers need to understand what is preventing action before choosing a procurement pathway.
• Understand electricity activity, consumption, and location before choosing between RECs, PPAs, or VPPAs.
• A regional APAC strategy still requires market-specific execution because electricity systems, deliverability conditions and instrument availability differ.
• Procurement pathways need to consider activity matching, timing, instrument eligibility, evidence integrity and tracking requirements under SBTi V2.0.

How does SBTi V2.0 affect supplier renewable electricity?

Supplier decarbonisation is moving from expectation to execution.

Corporate buyers have spent years asking suppliers to reduce emissions. The next challenge is making that expectation executable.

Across APAC, suppliers operate in different electricity systems and at very different levels of readiness. Some have the scale, data and expertise to procure renewable electricity independently. Others may lack sufficient electricity visibility, procurement capability, market access or the scale required for longer-term solutions.

For a multinational managing hundreds or thousands of suppliers, expecting every supplier to overcome those barriers independently is difficult to scale.

Under the Science Based Targets Initiative(SBTi) Corporate Net-Zero Standard V2.0, companies will be expected to prioritise action as close as feasible to the underlying activity. Where emissions arise within a shared system, activity-pool action may also be used subject to the relevant boundaries and integrity criteria.

For electricity, V2.0 introduces specific requirements governing activity pools, deliverability and eligible market instruments under Criteria CNZS-C21–C22 and CNZS-C30–C31.

Eligible electricity market instruments include grid-connected Power Purchase Agreements (PPAs), financial or Virtual Power Purchase Agreements (VPPAs), electricity-supplier contracts for low-carbon electricity attributes and unbundled Energy Attribute Certificates (EACs).

SBTi uses the broader technical term low-carbon electricity (LCE). Renewable electricity is a subset of LCE. This article focuses specifically on renewable electricity procurement and instruments such as Renewable Energy Certificates (RECs), PPAs and VPPAs.

For corporate buyers, the opportunity extends beyond setting a supplier requirement.

The priority is to understand where suppliers face barriers and where coordinated action can help turn a regional decarbonisation objective into something suppliers can execute.

Why would a corporate buyer need to get involved?

Supplier readiness is rarely uniform.

One supplier may already have reliable electricity data and sufficient demand to assess a long-term renewable electricity contract. Another may know little beyond its annual electricity bill, while a smaller supplier may lack the scale or internal resources to evaluate different procurement options.

For corporate buyers, this creates an execution gap:

“We expect our suppliers to decarbonise.”

“Our suppliers have a practical pathway to act.”

Companies will need to assess activity-level action where feasible before relying on activity-pool or sector-level approaches.

Where emissions arise within a shared activity pool, such as an electricity grid, action may occur within that same pool. Reserve broader sector-level action for circumstances where structural constraints prevent sufficient action closer to the activity.

The commercial implication is more important than the terminology.

Supplier programmes should begin by identifying what prevents action, then determine the appropriate procurement approach.

A corporate buyer may therefore choose to improve electricity visibility, establish common procurement requirements, coordinate supplier needs or explore whether demand can be aggregated.

These are programme-design choices rather than automatic SBTi requirements. Their value is in making supplier action more executable.

Should suppliers start with a REC or a PPA?

The answer depends on the supplier’s electricity activity and market.

A common mistake is to begin by asking, “Should we use a REC or a PPA?” That question comes too early.

Before choosing a procurement pathway, the corporate buyer needs to understand three things.

Which supplier activity matters?

Identify the supplier operations or value-chain activities where electricity-related emissions are material enough to warrant intervention.

How much electricity is involved?

Understand the electricity consumption associated with those operations.

Where is that electricity consumed?

Identify the relevant facilities and markets.

Only then should the procurement pathway be structured.

Different supplier situations can require different responses.

A supplier with substantial and predictable electricity demand may be able to assess a longer-term procurement structure. Smaller suppliers may need a more accessible market-based pathway. Several suppliers with similar needs may create an opportunity to explore coordinated procurement.

In other cases, the first intervention may involve improving electricity data enough to make a credible procurement decision.

The procurement pathway should follow the electricity activity and market conditions.

Can one APAC strategy work across different electricity markets?

A multinational may have one Scope 3 strategy across APAC.

Execution still takes place through specific electricity markets, grids and regulatory structures.

Under SBTi V2.0, where the geographic location of value-chain electricity consumption is known with sufficient detail, Scope 3 electricity activity-pool boundaries will need to reflect relevant deliverability regions.

Where sufficiently detailed information is unavailable, national or other appropriate regional boundaries may be used, with the basis reported.

For a regional procurement team, this creates an important operating principle:

Corporate ambition can be centralised, while electricity execution remains market-specific.

A supplier in one APAC market may have access to a practical long-term procurement route, while a similar supplier elsewhere may require a different solution because market structure, deliverability or instrument availability differs.

The objective is to build one regional strategy with market-specific execution underneath it.

Related: How APAC Corporates Achieve 100% Renewable Energy With RECs, PPAs, VPPAs and Green Tariffs

What needs to be checked before procurement?

Once the activity, electricity load and market are understood, the company can evaluate the appropriate procurement pathway.

Four checks are particularly relevant.

1. Is the action matched to the right activity?

SBTi requires implementation actions to correspond to the activity they are intended to support, with market instruments subject to applicable matching and integrity requirements.

2. Does the timing align?

Actions must correspond to activities occurring within 12 months, subject to the Standard’s applicable qualifications.

3. Is the electricity instrument eligible?

Eligible instruments for activity-pool electricity consumption include grid-connected PPAs and VPPAs, supplier contracts for LCE attributes and unbundled EACs.

SBTi also limits applicable market instruments to LCE generators commissioned or repowered within the 15 years preceding the electricity-consumption period to which the instrument is applied.

4. Is the evidence behind the instrument credible?

SBTi requires market instruments to meet applicable integrity criteria, while energy attribute certificates must be issued, transferred and retired through secure tracking systems that prevent double counting.

Where market instruments are issued through a programme or framework, companies must purchase from programmes or frameworks that demonstrate decarbonisation of the relevant system.

SBTi states that further guidance on system-level impact is expected as part of its recognition framework.

These requirements reinforce a larger procurement lesson:

An eligible REC, PPA or VPPA still needs the right procurement structure around it.

What is a practical sequence for APAC supply-chain renewable electricity?

For corporate buyers, the process can be simplified into four decisions.

1. Identify

Prioritise the supplier activities where electricity-related emissions warrant action.

2. Map

Understand how much electricity is consumed and where.

3. Define

Determine the relevant electricity market or deliverability boundary and identify the barriers preventing supplier action.

4. Structure

Select the appropriate procurement pathway and establish the necessary evidence, allocation, tracking and reporting controls.

This sequence deliberately puts instrument selection last.

RECs, PPAs and VPPAs are procurement tools within the wider strategy.

From supplier expectations to executable action

SBTi V2.0 does not require corporate buyers to procure renewable electricity for every supplier.

The more useful opportunity is to take a structured approach to the barriers preventing suppliers from acting.

For companies operating across APAC, this means moving from:

“Our suppliers need to use renewable electricity.”

towards:

“We know which supplier electricity loads matter, what is preventing action, and which procurement pathway is appropriate in each market.”

That creates a more scalable approach to supply-chain renewable electricity.

This shift also changes the role of regional procurement expertise.

Regional procurement expertise can help connect corporate climate objectives, supplier realities, market-specific electricity conditions and credible procurement execution.

Frequently asked questions

Can a corporate buyer purchase RECs to support its suppliers?

Potentially. Eligible unbundled RECs are recognised as one of the market instruments that can support electricity-related target implementation at activity-pool level.

However, the procurement still needs to satisfy applicable activity matching, deliverability, integrity, attribution and double-counting requirements.

Must renewable electricity come from the supplier’s country?

Not necessarily. Relevant electricity activity pools are determined using deliverability regions where sufficient location information is available.

Whether renewable electricity generation can support a particular supplier load therefore depends on the applicable electricity system and deliverability conditions, rather than national borders alone or an assumption that certificates are interchangeable across APAC.

When should suppliers consider RECs, PPAs or VPPAs?

The appropriate pathway depends on factors such as electricity load, location, data quality, contract horizon, market availability and the applicable SBTi criteria.

There is no universal instrument hierarchy requiring every supplier to choose the same product first.

The decision should follow assessment of the supplier’s electricity activity and market.

Review your APAC supply-chain renewable electricity approach

As Asia’s Climate Solutions Partner, Saxon Renewables supports corporate buyers in structuring renewable electricity procurement from Renewable Energy Certificates to longer-term PPA and VPPA pathways.

A Supply-Chain Renewable Electricity Review can help identify priority supplier electricity loads, execution barriers, appropriate procurement pathways and evidence gaps across different markets.

Last updated: September 2026