Additionality is a crucial - yet often overlooked - indicator of sustainability. Scientific consensus on the importance of additionality is growing and for good reason: without additionality, efforts to reduce emissions risk having no real impact. This blog post explores the concept of additionality and how it reflects the climate impact of renewable electricity purchases.
What is additionality?
“Additionality” refers to the idea that, to make a difference, an action needs to result in a sustainable project that would not have occurred without that action. The term was first used in the early 1990s to ensure that funding for carbon reductions supported new projects rather than just maintaining existing ones. This made sure that the funding lead to real, additional reductions in carbon emissions. Today, additionality is a key principle for evaluating whether an action makes a sustainable difference in the world.
To better understand additionality, let’s look at the act of buying renewable energy.
When a company wants to purchase renewable energy, it typically has two choices: it can buy certificates that represent energy from an existing solar park, or it can buy energy directly from an energy developer that will build a new solar park only if the company commits to buying its energy. The first option is less additional because the solar energy will be produced whether the company buys it or not. In contrast, the second option is highly additional because the company’s purchase is the reason the new solar park will be built, leading to more renewable energy being produced.
In the example above, we see how the additionality of an action depends on its responsibility for the production of renewable energy. However, determining whether an action is truly responsible for a sustainable project can be complex. Often, the successful development of a project, like a new solar park, depends on the alignment of many factors, not just one action. It is also difficult to say, with absolute certainty, that a new project would not have happened without the action. This is why additionality should be measured on a scale of likelihood of responsibility rather than treated as a binary yes or no. Some actions are more additional, while others are less.
How additional is the renewable electricity you buy?
The principle of additionality tells us that not all actions are created equal. Some actions are more additional than others, meaning they are more likely to make a positive, tangible difference in the world, while others have little to no actual effect. When it comes to the renewable electricity companies buy, additionality is often missing.
The most popular and least additional way companies buy renewable electricity is to purchase renewable energy certificates (i.e., Guarantees of Origin). Consumers can use these certificates to claim that a unit of electricity came from a specific renewable source, like solar energy. The problem is that these certificates do not lead to the production of more renewable energy, despite allowing companies to claim emission reductions on paper (Read: The problem with green energy certificates).
There is another, more impactful way companies can purchase renewable electricity, and that’s through a Power Purchase Agreement (PPA). These electricity contracts ensure that a new solar or wind park is constructed - a park that wouldn’t have been built if not for the PPA. When companies sign these highly additional PPAs, they help accelerate the energy transition, making a tangible difference in the world (Read: The most effective green power solution for business).
The importance of additionality
Additionality is essential for validating sustainability claims. Without it, claims of reducing emissions or having had other positive impacts may be viewed as empty promises, leading to accusations of greenwashing. For instance, numerous articles in The Washington Post, Børsen, TV2, and EuroNews call out the lack of real-world impact from buying renewable energy certificates.
Major standards and reporting frameworks are also taking note of additionality. The Greenhouse Gas Protocol and Science Based Targets Initiative are both reviewing the legitimacy of non-additional sustainability claims. It is widely anticipated that these standards will soon require proof of additionality in companies’ sustainability claims.
Beyond the corporate realm, a lack of additionality threatens climate progress. When it comes to electricity procurement, a failure to consider the additionality of energy purchases means that over 40% of committed emission reductions tied to electricity consumption won’t happen. Meanwhile, we need to reach net-zero emissions in our energy sector by 2050, a goal that requires meaningful corporate action. As we see temperatures rise, and increasing climate risks to human lives, nature and business, there is little space for sustainability decisions that fail to deliver the impact they promise.