Reporting Zero Emissions for (Market-Based) Energy Consumption
Energy Attribute Certificates (EACs) are a well-established way of enabling companies to report zero emissions for electricity consumption by showcasing that all applicable consumption has been accounted for by renewable generation. In recent years, a similar market has been developing to enable companies to procure EACs for the generation of renewable gas. As companies seeks to decarbonise electricity and gas through proactive measures such as on-site solar PV, electrification, energy efficiency etc, EACs can play a key short-term solution in reducing emissions from energy across global portfolios.
EACs for Electricity Consumption
Contractual instruments (generally known as Energy Attribute Certificates - EACs) are a market-based approach to track and show origin, ownership, type and vintage (year) of renewable electricity generation. EACs are issued per 1 MWh of electricity from eligible renewable sources and are governed depending on global/regional/national schemes, i.e., Renewable Guarantees of Origin (REGOs) in the UK, Guarantee of Origins (GOs) in the EU, Renewable Electricity Certificates (RECs) in the USA, International Renewable Electricity Certificates (I-RECs) in markets such as Brazil, China and India.
'Bundled' and 'Unbundled' EACs
EACs can be purchased 'unbundled'. i.e., separate to existing non-renewable electricity supply contracts in order to offset carbon emissions associated with electricity supply. 'Bundled' EACs refer to renewable electricity supply contracts with accompanying EACs. For companies with existing non-renewable electricity supply, EACs can be purchased on an 'unbundled' basis to offset electricity emissions.
Supporting Carbon Reduction Reporting
A central role of the use of EACs is to allow for the reporting of zero-carbon electricity consumption under scope 2 emissions, subject to meeting GHG Protocol Scope 2 Quality Criteria. Companies purchasing suitable EACs can report zero emissions for electricity consumption (if requirements are met) in order to report lower/zero emissions for market-based electricity consumption.
EACs are often used as a key tool to address short-term decarbonisation efforts while carrying out longer-term strategic actions such as on-site generation or Power Purchase Agreements (PPAs), which also enable the direct creation of EACs through funding new renewable generation ("additionality"). As companies seek to develop overarching decarbonisation/net zero plans to decarbonise energy usage up to 2030-2040, EACs are typically selected as an interim measure during the development of on-site/more technically complex decarbonisation levers.
EACs for Gas Consumption
While EACs have typically related to the generation of renewable electricity, there is now a growing market and availability for renewable gas/biomethane certificates. Renewable Gas Guarantees of Origin (RGGOs) (EACs for gas consumption) are a market-based approach to track and show origin, source type, carbon intensity, sustainability credentials etc of renewable gas generation (similar to EACs for renewable electricity). Each RGGO represents 1 kWh of renewable gas and are issued as batches according to the characteristics of the gas produced across a given time period by a producer.
The price of biomethane certificates are subject to significant variance, taking into consideration a number of key factors, including the source of biomethane, location, carbon intensity (CI) and sustainability credentials. Unlike the certification market for electricity which enables companies to directly report zero emissions through the purchasing of electricity EACs, the market for RGGOs remains in the early stages of development. As of September 2023, the GHG Protocol and SBTi do not allow the purchasing of RGGOs to enable a company to report zero emissions for associated gas consumption – this is subject to potential change in 2023/2024 following an expected update from the GHG Protocol.
How NUS Can Help
NUS are able to support clients with the procurement of a range of EACs in order to report zero emissions for associated consumption. By working with our Energy and Sustainability Services (ESS) team, NUS can guide your company through the entire process of purchasing EACs for national and global operations, including:
- Renewable Energy Guarantees of Origin (REGOs) for UK operations
- Guarantees of Origin (GOs) for European operations
- Renewable Electricity Certificates (RECs) for North American operations
- International Renewable Electricity Certificates (I-RECs) for other international operations
- Biomethane certificates/RGGOs for gas consumption (subject to availability in different markets)
To discuss your opportunities relating to the purchasing of EACs, get in touch with your NUS consultant or email firstname.lastname@example.org.
More: Energy Market Commentary, Energy Attribute Certificates (EACs), Renewable Energy, Renewable Energy Certificates (RECs), Science-Based Targets initiative (SBTi), Sustainability