Sustainable Solutions for the Green Transition

RED II, art.2 (12) A Guarantee of Origin (GoO) is an electronic document that provides evidence to a final customer that a given share or quantity of energy was produced from renewable sources.

The most common abbreviation mentioned is EAC (Energy Attribute Certificates). It certifies that 1 MWh was produced from a renewable source and injected into a grid. EACs are a tradable, non-tangible commodity that complies with Greenhouse Gas Protocol Scope 2 Guidance. Globally, there are three main EAC systems for claiming the use of renewable energy:

• Guarantee of Origin (GoO), representing the rules of EECS (EU)
• Renewable Energy Certificate (REC), the official standard in North America
• International Renewable Energy Certificate (I-REC), the internationally used standard.

Energy attribute certificates are a category of contractual instruments that represent certain information (or attributes) about the energy generated but do not represent the energy itself.

A Power Purchase Agreement, or PPA, is a contractual arrangement that brings together a renewable energy producer and a customer. The primary purpose of this agreement is to ensure a steady level of revenue certainty for the asset owner, making the project bankable. On the other hand, it assures fixed long-term costs for the energy consumer, enabling the company to receive “green attributes,” which allow it to claim adjustment of its Scope 2 emissions.

Power Purchase Agreement contracts are mostly known in two forms:

• A physical PPA refers to the purchase of energy at the meter point where the customer consumesthe electricity from the existing transmission grid.
• A virtual (or financial) PPA is a simple cashflow or can also be defined as a CFD (Contract for Difference). In this case, the seller and the buyer buy and sell from the spot market. If the mark-to-market price is above the agreed one, the seller pays the difference. If the mtm-price is below the strike, then the buyer pays the seller.

One of the most accurate definitions of carbon accounting is that it is an exercise in constructing a time series of quantities. In practice, we recognize three types: economic, physical, and performance GHG accounting.

Carbon accounting enables businesses to measure their carbon footprint and quantify their climate impact by converting measurable business activities into CO2e values. This provides vital data for both mandatory and voluntary reporting. Perhaps more importantly, it provides insight to help companies offset and reduce their environmental footprint and help combat climate change.

“Carbon offset” is a record for GHG emission reductions or removals that compensate for CO2 emissions. A carbon offset credit is a transferrable instrument certified by governments or independent certification bodies to represent an emission reduction of one metric tonne of CO2. Because GHGs mix globally in the atmosphere, it does not matter where exactly they are reduced.

Public companies and large businesses are legally obligated to report their GHG emissions every year. This is the first step in becoming truly carbon neutral, part of a business’s CSR (Corporate Social Responsibility) strategy, or a way to improve consumer trust and create powerful differentiation.