What are renewable gas certificates?
Renewable gas certificates assure the end-user that the product they are using comes from a renewable source and is produced sustainably. Different renewable gas certificates are available. While they differ in some aspects, they are all designed to avoid double counting and provide information about the environmental characteristics of renewable gas consumption to regulators and consumers.
These certificates are used for two main reasons. Firstly, they serve as proof of compliance with the legal obligations, such as renewable energy or emission reduction targets.
Secondly, companies and organisations that are trying to lower their carbon emissions might use them voluntarily to show they use renewable gases and make the appropriate claims in their emission reports.
What type of renewables gas certificates exist?
In the framework of the EU Renewable Energy Directive (Directive (EU) 2018/2001) there are two types of renewable gas certificates: Proof of Sustainability and Guarantee of Origin. Alongside these are national certificates in countries such as Germany, UK, Austria.
Although these are mainly issued for biomethane, they can also be issued for hydrogen or other Renewable Fuels of Non-Biological Origin (RFNBO).
Guarantees of Origin (GOs)
The Guarantee of Origin (GO) derives from article 19 of the Renewable Energy Directive. Its main purpose is to provide information to the final consumer, primarily to show they have used renewable and not fossil gas. It will indicate the type of renewable gas used as well as the location of the production facility, if public support was given for the production, and the feedstock used.
All EU Members States must appoint an issuing body to operate a GO registry and only registries with that status can issue GO certificates. In most Member States a GO registry is now in place for renewable gas but some are still under development.
The GO registry issues the GO at the request of the producer following strict rules set in the legislation and relevant standard (EN 16325). After issuance, the GO will be in the registry account of the producer. If the producer sells the certificate, it can transfer the GO to the registry account of the buyer. These certificates can be traded irrespective of the physical flow of the renewable gas via a so-called book and claim system. However, if a PoS and GO have been issued for the same consignment of gas, they cannot be traded separately to different companies. In the final phase of the process, the GO must be cancelled before the final consumer can claim the usage of the renewable gas.
Certificate of Origin (CoO)
Certificates of Origin is an umbrella scheme used by the European Renewable Gas Registry (ERGaR) that includes various national biomethane certificates and GOs. The ERGaR CoO scheme accounts for GO registries or registries issuing other national certificates. These other registries are:
- Green Gas Certification Scheme (GGCS) in the UK
- Dena Biogas Register in Germany
- AGCS Biomethan Register in Austria
These systems work in a similar way the Guarantee of Origin (GO), with a digital database tracking issuance and ownership. However, there can be differences with GoO, such as the expiration date and the unit of energy measured.
Proof of Sustainability (PoS)
A Proof of Sustainability (PoS) is a certificate that proves that a renewable gas such as biomethane meets the sustainability requirements of the EU Renewable Energy Directive. For example, there are sustainability requirements for the area in which the feedstocks of biomethane are sourced or the origin of the renewable electricity used to produce hydrogen. PoS certificates also record the greenhouse gas emissions attributed to different parts of the production process and transporting the renewable gas. These need to be calculated as part of the process to issue the PoS and are included on the certificate.
Renewable gas with a PoS can be used to prove compliance with the targets set in the EU Renewable Energy Directive for the transport sector or according to the national renewable energy goals.
A PoS can be issued by a producer of biomethane if they are certified by one of the relevant EU Voluntary Schemes: ISCC, REDCert, 2BS, Better Biomass for biomethane. As of September 2024, ISCC, REDCert and CertifHy can also certify for RFNBOs.
Furthermore, biomethane with a PoS can be traded only by traders that are certified by one of the EU Voluntary Schemes. These are recognised in the European Union by the European Commission and must adhere to strict standards set out in the Renewable Energy Directive (RED). Producers and traders are regularly audited to ensure they comply with standardised rules.
Importantly, the PoS must be linked to the trade of physical gas and is therefore considered to be “Mass Balanced”. Traders and producers are free to send the PoS in any form to a buyer or seller, either as a PDF attachment or using a digital database such as NABISY in Germany. Annual audits check there is no double counting and the biomethane is properly mass balanced.
The European Commission developed the EU Union Database (UDB) to track and trace the ownership of the PoS. At the moment it is unclear when the UDB will become mandatory to use.
Renewable Gas Certificates Trading
Different renewable gas certificates are also traded in different ways depending on the underlying database (or if they are PDF attached to emails) and the regulations with which traders must conform.
Proof of Sustainability
Proofs of Sustainability (PoS) are traded with the renewable gas. The concept comes from liquid biofuels and the principle is that the physical gas is traded together with the PoS. The exact rule on how physical gas must be traded varies between regulator of different biofuel quota schemes and EU ETS administrators. In most countries, the PoS can be sent in any form including as a PDF via email from the seller to the buyer. There are exceptions in countries with dedicated national databases, such as NABISY in Germany and eLNa in Austria. This whole process will change when the Union Database (see below) becomes mandatory. All parties trading the PoS (except the final customer) must be certified according to the rules of one of the voluntary schemes.
From an infrastructure perspective, biomethane with PoS can be traded within the European Union without any restrictions to all companies connected to the European gas grid as this is considered one single logistical facility.
Union Database for Biofuels (UDB)
Trading of PoS will change significantly with the Union Database (UDB). It is yet uncertain when the UDB should becomes mandatory for gaseous fuels and will function as a database that tracks the ownership of the PoS. When the UDB becomes operational the PoS will be kept in the account of the owner of the certificate and can be transferred to another account after a transaction. At the final phase certificates can be redeemed against gas consumption.
For transactions where the gas is flowing within the EU gas grid there are no internal boundaries and the PoS can be traded across the EU, provided there is a connection to the European gas grid. However, rules are still being developed for imports and exports.
DISCLAIMER: At the time of writing, there are still open questions about the UDB and certain aspects might change. It is therefore recommended to always check the latest status on the UDB wiki.
Guarantee of Origin
A Guarantee of Origin (GO or GoO) for renewable gas will be issued in national GO registries. According to EU legislation each country should appoint one issuing body to manage a GO registry in that country. The owner of the GO will need to have an account at the GO registry. When trading, the GO can be sent from the account of the seller to the account of the buyer. It is not needed to trade any physical gas although some market participants may wish to do so. At the final stage the GO can be cancelled or redeemed and a consumer can claim the use of renewable gas. This cancellation needs to happen before the expiration date of the GO, which is 18 months after production.
Cross-border trade
It may be possible to transfer a GO from one registry to another if those registries have a bilateral agreement or if they are both participants in a multilateral cross-border transfer scheme. Two parallel cross-border schemes exist currently: the ERGaR (European Renewable Gas Registry) CoO scheme and AIB (Association of Issuing Bodies) Gas Scheme. Registries connected to one of the schemes can transfer GOs relatively easily with other participants in that scheme. However trading with a registry connected to the other scheme can only be done with a bilateral agreement. AIB and ERGaR recognise the desire to have a fully open market that allows for transfers between all registries. They are in ongoing discussions to make this possible.
Combination Guarantee of Origin and PoS
It is possible that both a GO and PoS will be issued for the same consignment of gas, however the two certificates must be “bundled” and never sold separately to different companies. When this part of the UDB becomes operational the PoS and GO will be linked within its database, meaning that where PoS are issued for biomethane the GO will also move via the UDB and not within national registries.
Certificate of Origin
A Certificate of Origin is the umbrella term for various certificates including GOs and national certificates from the UK, Germany and Austria. Trading of GOs is explained above. Trading of the national certificates from the UK (RGGO by GGCS), Germany (dena) or Austria (AGCS) is equivalent to trading the GO. The certificates in a digital database and can be moved from between different accounts.
Important differences with GO exist. For instance, the dena biogas registry allows a mass balance function to be applied, which requires proof of gas withdrawal. Expiry dates can also vary, such as in the GGCS registry where the national certificates are valid for up to 3 years and 3 months. More details on the rules of these registries can be found on the respective websites: AGCS, GGCS, dena.
Amount of GWh transferred and quarterly number of CoO transfers via ERGaR registries
ERGaR and AIB Scheme members
