Why should you get excited about the changes in the Guarantees of Origin –landscape?

With REDII several new energy carriers have started to receive Guarantees of Origin. Member countries already do, or soon will recognize Guarantees of Origin for gases, hydrogen as well as heating and cooling in addition to the well-established ones for electricity.

Another large change concerning the Guarantees of Origin relates to market entry for countries outside of the European Union. A non-Union country needs approval from the European Commission to trade their Guarantees of Origin in the European market. This naturally requires adaptation of EU-level regulation and European standards (namely CEN-EN 16325 and EECS), but today the ability to enter the European market is not guaranteed even if these boxes are checked. This has led to for instance Energy Community-countries building their own, EECS-compatible trading scheme.

As the case often is with big changes, the process has not been without issues for the Union members, either. The goal of the new regulation is to further harmonize the Guarantees of Origin system in the European Union. Thus, the RED II refers to the European standard CEN-EN 16325. As the CEN-EN 16325 is currently being revised, and the publication of the updated standard has been delayed, some parts of the regulation on the data content of Guarantees of Origin in the future are still clouded.

Growing pains aside, the extension of the GO system is mainly good news. The functioning market extends to new energy carriers, which increases both the liquidity of the market as well as the credibility of energy disclosure. Even though the RED II has been in force for a while already, the new Guarantees of Origin are not yet available in several large markets. As the European Commission is putting pressure on national governments to fully implement the REDII, we should see significant growth in the supply of GO for new energy carriers in 2023. This also means upcoming changes to the market infrastructure. For instance the AIB v.80 schema update and ExtraVert Hub will allow easier international trade of these new guarantees of origin.

As the new geographical and energy carrier markets are only just emerging, we have not yet seen the private sector response to these new products. For electricity, the RE100 companies have committed to maintaining a steady market demand for GO for renewable electricity. Interestingly, the RE100-companies have chosen to approve only EECS GOs, which excludes the Guarantees of Origin from some major European Union energy producers, like Poland. As consumer consciousness of renewable energy production increases, it is interesting to see who will take the lead in demand generation for these new products.

As Grexel, we are excited about the change. Already now, in June 2022, we are hosting all RED II energy carriers on our new registry platform, G-REX. We have also consulted the Energy Community on the creation of their trading scheme and are providing the willing Energy Community members with EECS-compatible registry platforms.