Carbon reporting when using renewable gas certificates.
Many companies now have ambitious carbon reduction targets and switching to renewable gas can play an important role.
There may be some limited opportunities to physically receive renewable gas and that type of consumption can easily be recorded. But in most cases it will be inefficient or impossible to receive renewable gas this way. This is especially true for biomethane as it is rarely practical to install and operate a biomethane plant on or close to the point of consumption and grid injection and consumption is still needed to allow the continuous matching of supply and demand.
When gas is injected into the grid it mixes with the other gas within the system, making it impossible to physically track those biogenic molecules to consumption points.
Instead consumers can purchase renewable gas certificates that match the gas they have consumed via a mixed grid to renewable gas placed into that same system. Certificates ensure there is no double counting of the gas produced and only one company can claim the use of the renewable gas.
GHG protocol and SBTi
There is no single set of rules on what types of claims consumers can make when they purchase renewable gas certificates.
Each consumer will have different stakeholders to consider, such as national reporting guidelines, the rules of the EU ETS, biofuel quotas and voluntary reporting and target setting programmes. Different guidelines and schemes may be governed by different regulations. For example, renewable gas certificates might be recognised in one place but not another.
Two very common frameworks are set out in the Science Based Target Initiative (SBTi) and the Greenhouse Gas Protocol (GHG Protocol).
At present both organisations are in the process of developing clear rules on the use of renewable gas certificates to reach climate targets and calculate GHG emissions. While more clarity is expected, below is the latest public statement by the GHG protocol regarding the use of biomethane certificates:
In the absence of guidance, companies purchasing certificates may wish to consult with their auditors and consider rules provided by relevant target-setting programs or applicable regulatory schemes in their jurisdiction(s) on how to report these purchases in their reports, while ensuring full transparency and following all GHG accounting and reporting principles.
(https://ghgprotocol.org/blog/interim-update-accounting-biomethane-certificates)
There is a strong precedent for using renewable gas certificates to report reduced Scope 1 emissions (based on the GHGP guidance in place from 2015-2019). In EU countries this is complemented by the EU GO framework, the EU ETS and the rules of biofuels quota which recognise certificate-backed consumption.
However, companies will need to consult with their auditors to agree that this approach can be taken.
Does purchasing renewable gas certificates lead to additional renewable gas production?
The sale of renewable gas certificates is an important income source for renewable gas producers and are factored into the financial planning for new renewable gas projects. This income can make the difference between a project being built or not. For existing plants it can be used for further investments in new technologies such as CO2 capture. Income from renewable gas certificates will sit alongside sale of physical gas and the potential receipt of government subsidy (production support).
Renewable gas certificates will often provide information about any government support that has been provided so that consumers can understand the role they are playing alongside government in driving additional production. Moreover, according to the Renewable Energy Directive, Member States may decide not to issue a GO to a producer that receives financial support from a support scheme. It is also the duty of the Member States to ensure that when a producer receives financial support from a support scheme, the market value of the GO for the same production is taken into account appropriately in the relevant support scheme. In some cases, this means a certificate might be issued after government support is provided, while in other cases it might be the instrument for government support to be claimed. If investment or production support is received, this should be indicated on the GO to inform the consumers. In the UK, RGGOs issued for biomethane produced with subsidy at the point of injection will be labelled accordingly as well. A more detailed analysis of the additionality of biomethane certification income in the UK can be found here.