Guarantees of Origin
A key tool for accounting renewable energy
A Guarantee of Origin (GoO) is an electronic document which has the sole function of providing evidence to a final customer that a given share or quantity of energy was produced from renewable sources.
GoO’s help businesses prove their eco-mindedness in front of investors, customers, and the broader public.
What you need to know about Guarantees of Origin
The information described here is provided as a guide only and is not professional or legal advice. It should not be assumed that it is comprehensive or that it provides a definitive answer in every case.
DIRECTIVE (EU) 2018/2001
Art.2 (12) A Guarantee of Origin (GoO) is an electronic document which has the sole function of providing evidence to a final customer that a given share or quantity of energy was produced from renewable sources.
DIRECTIVE 2012/27/EU
§39 To increase transparency for the final customer to be able to choose between electricity from cogeneration and electricity produced by other techniques, the origin of high-efficiency cogeneration should be guaranteed on the basis of harmonized efficiency reference values. Guarantee of origin schemes do not by themselves imply a right to benefit from national support mechanisms. It is important that all forms of electricity produced from high-efficiency cogeneration can be covered by guarantees of origin. Guarantees of origin should be distinguished from exchangeable certificates.
Electricity Market Directive [(EU) 2019/944], Annex 1 (5) Disclosure of energy sources
The disclosure of electricity from renewable sources shall be done by using guarantees of origin.
- The GoOs system complies with the GHG Protocol Scope II Accounting Guidance, which is the most widely used international accounting framework to understand, quantify, and manage greenhouse gas emissions.
A Guarantee of Origin has the following characteristics:
- A financial instrument – representing a derivative.
- A non-tangible commodity (do not confuse it with a “good”).
- VAT – for cross-border transactions we always apply the “reverse charge mechanism” (RCM).
Council Directive 2006/112/EC(3) provides that Member States can use, on an optional basis, the reverse charge mechanism (RCM) for the payment of VAT on supplies of pre-defined goods and services that are susceptible to fraud, in particular, Missing Trader Intra-Community (MTIC) fraud. That Directive also provides for the Quick Reaction Mechanism (QRM) special measure, which offers Member States, under certain strict conditions, a faster procedure that allows for the introduction of the RCM, resulting in a more adequate and effective response to sudden and massive fraud. The application period of both mechanisms has expired.
COUNCIL DIRECTIVE (EU) 2022/890 amended the above-mentioned directive, extending the period until 31 December 2026.
| Carbon credits (offsets) | Energy Attribute Certificates (EAC) | |
|---|---|---|
| Unit of Measure (UoM) | Metric tons of CO2 | MWh |
| Scope | Projects (incl. Renewable energy generation) | ONLY Renewable |
| Purpose | Represent GHG emission reductions Lower Costs for GHG emissions mitigation Provide financial support for emission reduction and carbon removal activities |
Convey use of renewable electricity Gives a choice to end consumers Support renewable energy development |
| GHG Inventory | Reduce or “offset” an organization’s scope 1 or 3 emissions, as net adjustment | It lowers an organization’s scope 2 emissions from purchased electricity |
| Consumer Claims | Can claim to have reduced or avoided GHG emissions outside their organization’s operations | Can claim to use renewable electricity from a low or zero emissions source |
For renewable energy producers
Lock your second stream of income
Guarantees of origin are the second stream of income for every solar power plant, wind farm, hydro electric plant or biomass power generation plant.
We can assist you in your revenue management strategy.
For eco-minded businesses
You are on your challenging way of building the ESG report
According to the GHG protocol, Scope 2 guidance, companies shall account for and 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.
We can be your partner in securing the required volume of Guarantees of Origin.
