As a minimum condition, you should use RECs that are within the same market boundary, or gridconnected region if cross-border markets do not exist, e.g. if you have operations in North America, you are expected to use RECs (USA and Canada) and not Guarantees of Origin (GOs), which are the instruments used in Europe. Likewise, your European operations are expected to use GOs and not North American RECs or other instruments from other geographies. Unlike offsets, electricity tracking instruments are not expected to become global commodities, but regional commodities. This is because there are physical restraints to the transmission of electricity that should be respected by the tracking instrument trade. This type of constraints is understood as best practice that is still evolving. A good example is the case of islands, for example Iceland. There is no connection between Iceland and mainland Europe. As such, buying Icelandic GOs as a supply of European based consumption is seen as a problematic practice. These considerations could be extended to reflect transmission capacity between countries, which could add layers of complexity that, at the current stage of development of the system, are still difficult to address. The best way to address them is to follow best practice and it is considered best practice to source renewable energy from local renewable sources. Source: CDP Technical Note: Accounting of Scope 2 emissions, CDP Climate Change Questionnaire 2019
