Targets and mandates

Renewable energy (RE) targets and mandates are policy instruments designed to accelerate the adoption of renewable energy by requiring specific targets or proportions of RE use in electricity, transportation, or heating sectors. These measures set legally binding obligations for stakeholders, such as utilities, fuel suppliers, industries or consumers, to contribute to national or regional energy and climate goals.

Examples of most widely used targets and mandates include:

• Nationally Determined Contributions (NDCs) are national climate action plans submitted by each country, outlining a country’s greenhouse gas (GHG) emissions reduction targets, climate adaptation strategies, and national climate action plans.
• Renewable energy targets, set specific goals for the share (or quota) of renewable energy in a country’s total energy mix. These targets can be applied to electricity generation, transportation fuels or overall energy consumption.
• Renewable Portfolio Standards (RPS), mandate that utilities or electricity suppliers generate a certain percentage of their electricity from renewable sources. This creates a consistent demand for renewable energy, stimulating investment and innovation.
• Biofuel blending mandates, oblige the blending of biofuels, such as ethanol or biodiesel, with conventional fuels like gasoline or diesel. It helps to reduce greenhouse gas emissions from the transportation sector.
• Renewable heat mandates, require the use of renewable energy (e.g., biomass, solar thermal, geothermal) in heating and cooling systems, often for large buildings or industries.

Compliance with RPS or other RE mandates is often ensured through the use of tradable renewable energy certificates (RECs). RECs are market-based instruments that represent proof that one megawatt-hour (1 REC = 1 MWh) of electricity has been generated from RE sources.

RECs are applied to track, verify, and claim the use of renewable energy in electricity mix. The effectiveness of tradable RECs is highly dependent on: definition of targets, adequate compliance and enforcement framework, effective penalty system, availability of efficient markets for trading in RECs.

Most countries with established REC markets have two trading schemes:

• Compliance markets, where utilities and energy suppliers issue or purchase RECs to comply with quotas for renewable energy
• Voluntary markets, where RECs are bought and sold primarily by companies aiming to meet corporate goals for renewable energy and to reduce GHG emissions from electricity.

Countries enact a diverse array of national and sector (see Table 1) or technology-specific targets (see Table 2) to support their transition towards renewable energy. By the end of 2023, 90 countries had in place economywide targets for renewable energy.

Table 1: Countries with renewable energy targets, 2023

Source: REN21 Policy Database, 2024

Table 2: Technology-specific targets for installed renewable power capacity, 2023

Source: REN21 Policy Database, 2024

In most applications, renewable electricity quotas, mandates and tradable RECs are being adopted together with other regulatory and pricing mechanisms.