Every unit of energy generated has certain attributes, such as the source of the energy (wind, solar, coal), where the energy was generated, and when the production device first came online. These attributes can be documented into an Energy Attribute Certificate (EAC) which is issued to the producer and can be traded or transferred to a consumer. By cancelling the EAC, the consumer can claim to be using energy with those specific attributes. Because there is informational and economic value to EACs, they must be accurate and securely managed. For more information, see Energy attribute tracking system.

Energy Attribute Certificates (EACs) are the vehicle used to carry energy attributes certified via an attribute tracking system. In Europe, the primary certificate used by attribute tracking systems is the Guarantee of Origin or “GO”. In other locations, like the United States, the certificate used is the REC (Renewable Energy Certificate). An EAC is often bought, sold and cancelled with prices determined by a supply and demand market.

The Guarantee of Origin (GO or GoO) is the tracking certificate regulated by the EU Renewable Energy Directive 2023/2413 (RED-3). The GO is the carrier of energy attributes. The trade, cancelation and use of GOs are further governed by the European Standard CEN EN 16325, as referenced in the RED-3. In addition, the European Energy Certificate System (EECS) rules, maintained and enforced by the Association of Issuing Bodies (AIB) provides further rules that serve to harmonise and standardise GO markets (for more information see AIB). GO prices are determined by a voluntary the supply and demand market.

Energy attribute tracking systems are needed because it is impossible to track energy via grids or pipelines. Therefore, the attributes of an energy source are ‘booked’ when the energy is injected into a grid or pipeline, and ‘claimed’ when the energy buyer cancels the certificates – taking them out of use. Electricity tracking systems based on such book and claim system exist across the world, in an increasing number of countries. In the case of electricity, a certificate issuer takes meter readings to issue EACs for generation from a specific power plant and uses them to issue an EAC to the generator. This certificate contains all the required attributes of the generation and can then be transferred or traded to an end-user who will own this certificate. The end-user then claims the use of the attributes of the certificate by cancelling it, which makes it impossible to further trade or transfer the certificate or claim the use of its attributes. To learn more about end-user claims, see Claims / unique claims / credible claims.

It is impossible to track electrons or molecules through power grids or gas pipelines. This is why the tracking of energy attributes is done through book and claim systems (See Energy attribute tracking system). Book and claim systems are the best method for tracking energy attributes because Energy Attribute Certificates, such as GOs, can be transferred and traded separately from the physical energy. Energy attribute tracking systems based on the book and claim methodology exist across the world.

“Bundled” refers to the procurement of both energy and energy attributes together, for example in a green supply contract or a renewable power purchase agreement that includes EACs.

“Unbundled” refers to the procurement of energy and energy attributes separately, for example buying energy in a standard supply contract and buying attributes over the counter in the form of EACs.

Cancellation is the physical ‘use’ of an EAC and is the only means for allocating the attributes of that electricity to a single end-user. Cancelling an EAC removes it from the market and allows the canceller to claim the energy attributes in the EAC. Cancelling ensures that the certificate will not be traded, given, sold, or used by another end-user, which could lead to the attributes being counted twice. To learn more, see Claims / unique claims / credible claims and Double counting / double attributing / double claiming.

Claims refer to disclosure regarding the use of a specific type of energy, such as a public announcement of using 100% renewables or using data about renewable energy use for reporting, marketing or other purposes. Claims about renewable energy can be made after an end-user has cancelled, or had cancelled on his/her behalf, an EAC from a reliable tracking system. After the cancellation of an EAC such as a Guarantee of Origin, the consumer can claim the use of a type of energy and its attributes. Unique claims and credible claims refer to claims backed with proper proof (such as cancelled EACs, see Cancellation) which leaves out the possibility of double counting (see Double counting / double attributing / double claiming) Additionally, supplier disclosure rules ensure that the general public is given correct information about their energy usage.

The use of an Energy Attribute Certificate such as the GO is not limited to renewables, EACs can document the attributes of any type of energy, including non-renewables. Allowing the issuance of EACs to all energy sources does not count as establishing a full consumption disclosure system, which can only be established by making it mandatory for market participants to prove the origin of all their electricity or energy consumption through the cancellation of EACs. There are other types of full disclosure, such as full production disclosure and full supplier disclosure. You can learn more about full disclosure in RECS’ publications: What full disclosure means, and why it is so important and Full disclosure in the Netherlands.

Double counting, double attributing, and double claiming all refer to energy attributes being allocated intentionally or unintentionally to two separate end-users. The main use of EACs (such as the GOs in Europe) is to make all forms of double counting, attributing and claiming impossible. For more information, see Cancellation.

The EU first legislated for the promotion of renewables in 2001, with the original Renewable Electricity Directive (2001/28/EC). This landmark law has subsequently been updated by the European Institutions three times:

• The 2009 Renewable Energy Directive (RED-1) (2009/28/EC) explained the basic regulations behind the Guarantee of Origin system (Art.15).
• The 2018 RED-2 ((EU) 2018/2001) extended the scope of the GO system and added detail to the article on GOs (Art.19).
• The 2023 RED-3 ((EU) 2023/2413) amended the RED-2 by further extending GO schemes, allowing for greater granularity, and adding clarity on specific points. However, the RED-3 missed an opportunity to build on the success of the current GO scheme and ensure total transparency for energy consumers through full consumption disclosure.

For more in-depth explanation of the EU’s renewable energy directives, become a RECS member and benefit from a full briefing, including detailed analysis of the RED-3 and our 10-point plan for the anticipated RED-4.

The AIB is an umbrella organisation association made up of national issuing bodies who may voluntarily join. The AIB develops, maintains, and enforces the European Energy Certificate System (EECS) rules which govern the issuance, transfer and cancelation of European energy attribute certificates, usually known as guarantees of origin (GOs). The AIB also manages an inter-registry hub to facilitate the trading and transfer of GOs among AIB member countries. Finally, the AIB website is an excellent place to find the rules implemented by each AIB member country in what is known as a domain protocol.

EU electricity suppliers must specify in bills the contribution of each energy source to the electricity purchased by the final customer in accordance with the electricity supply contract, in line with annex 1, section 5 of the EU directive on in the internal market for electricity ((EU 2019/944). The information to consumers must include the contribution of each energy source to the overall energy mix of the supplier over the preceding year, information on the environmental impact (e.g. CO2 emissions and radioactive waste) of the supplier’s energy production. The law specifies that the disclosure of electricity from renewable sources procured through the grid shall be done by using Guarantees of Origin.

The residual mix is the grid average of energy attributes that are not allocated to a specific individual or end-consumer by means of issuing, trading/transferring and cancelling an EAC.. If a consumer uses grid electricity where a tracking mechanism to claim the use of renewable energy is not available, then they are obligated to use the residual mix when calculating/reviewing their carbon emissions resulting from purchased electricity (see Scope 2).

The EECS (European Energy Certificate System) is a standardization system for European Guarantees of Origin (GOs). Nations that are voluntary members of the AIB and choose to adhere to the EECS system are easily able to trade GOs cross-border with no risk of double counting, claiming or attributing. When most stakeholders refer to the GO voluntary market, they are referring to the standardized EECS-GO market.

The European Committee for Standardization (CEN, French: Comité Européen de Normalisation) is a public standards organisation whose mission is to foster the economy of the EU by development, maintenance, and distribution of coherent sets of standards and rules. CEN’s thirty-four national members, representing Member-States and Accession Countries, work together to develop these European Standards in various sectors.

The EU’s Renewable Energy Directive requires all EU Member States to adhere to the CEN EN 16325 Standard on Guarantees of Origin. This standard is in the process of being updated and seeks to increase the standardisation and harmonization of GOs in the European single market.

Granular EAC tracking and matching aims to allow energy consumers to buy renewable energy that was produced and added to the grid at the same time as they were taking energy from the same grid. You can learn more about RECS’ position on this topic in our members only position paper Granular electricity tracking and matching.

The GHGP is an initiative of the WRI and WBCSD and aims to standardising carbon accounting and disclosure practices. Their corporate guide, including the guidance documents for scope 1, 2 and 3 was published in 2014 after an extensive consultation process. The standard is being updated to reflect the recent developments in the field.

The GHGP requires reporting of scope 2 emissions on a dual-reporting basis, using both a location-based and a market-based methodology. The GHGP scope 2 guidance states that: “Companies with any operations in markets providing product or supplier-specific data in the form of contractual instruments shall report scope 2 emissions in two ways and label each result according to the method: one based on the location-based method, and one based on the market-based method: ‘dual reporting’. For more information on RECS’ advocacy for the ongoing update of the GHGP, see these documents.

The GHGP Guidance puts forward two methods for calculating a corporation’s emissions from purchased electricity. The location-based method and the market-based method. The location-based method reflects the average emissions intensity of grids on which energy consumption occurs (using mostly grid-average emission factor data). Using this method, a corporate can multiply its total electricity consumption (in MWh) by the average level of emissions per MWh of the grid area from which they take power.

The GHGP Guidance puts forward two methods for calculating a corporation’s emissions from purchased electricity. The location-based method and the market-based method. The market-based method reflects emissions from the energy that companies have purposefully chosen by buying from a specific generator or supplier. A corporate can prove such power purchases by acquiring and cancelling the relevant energy attribute certificates (EACs).

Under the GHGP, an organisation’s emissions are calculated within three scopes. Scope 1 covers onsite emissions (e.g. natural gas usage), scope 2 covers off-site direct emissions (e.g. electricity use), and scope 3 covers indirect emissions (e.g. employee travel or supply-chain emissions). GOs provide organisations with a way to reduce their Scope 2 emissions by buying non-emitting renewable energy. For more information on carbon reporting visit the website of the Greenhouse Gas Protocol.

A PPA is a contract between the purchaser and supplier of energy or electricity. The PPA contract lays out how much electricity the supplier has promised to place on the grid and how much the consumer will take off. A PPA also sets out the price or price-range that the consumer will pay the producer for the energy covered in the contract. A PPA can be for any energy, and it is an EAC for renewable energy that can put the ‘renewable’ into a ‘renewable PPA’.

The RE100 is a joint initiative of the Climate Group and CDP. I It is a global corporate renewable energy initiative bringing together hundreds of large and ambitious businesses committed to procuring 100% renewable electricity. Corporates make a pledge to use 100% renewable electricity within a specified time-period to join the RE100 and report their progress. Learn more on the RE100 website.