The electricity market solved a version of this problem
Companies wanted to support renewable power, but they could not always buy clean electricity directly from their local grid. Renewable power producers needed demand, but that demand was often geographically separated from the companies willing to pay.
The solution was a market structure that separated the environmental attribute from the physical flow of electricity. Renewable Energy Certificates created a way for companies to support renewable generation even when electrons were physically mixed on the grid.
Scope 3 needs a similar mechanism
Industrial supply chains face a similar but broader challenge. A company may want to support lower-carbon ammonia, fertilizer, cement, steel, copper, plastics, or freight, but it may not be the direct physical buyer of that commodity.
Without a certificate mechanism, buyer willingness to pay may never reach the producer capable of reducing emissions.
From renewable electricity to industrial commodities
| Electricity market | Industrial commodity markets |
|---|---|
| Renewable electricity is generated. | Lower-carbon commodity production occurs. |
| The environmental attribute is represented by a certificate. | The lower-carbon production attribute is represented by a commodity EAC. |
| Electricity flows through a shared grid. | Physical commodities flow through complex, blended supply chains. |
| A buyer purchases and retires certificates. | A buyer purchases and retires commodity EACs. |
What EACs can do
EACs can aggregate demand from many buyers. They can direct funding toward specific low-carbon production. They can create a documented link between buyer action and producer output. They can help producers monetize environmental attributes.
In this sense, EACs are not a substitute for climate action. They are a way to aim climate action at the production systems that need it most.
How S3 Markets applies this to Scope 3
S3 Markets provides the infrastructure layer for commodity EACs across hard-to-abate sectors. The platform supports issuance, allocation, transfer, retirement, and documentation.