Market Drivers

The demand for energy certificates and their capabilities in general is driven by many factors. Within this page we outline some of the key motives which have encouraged the increase in renewable and sustainable energy demand. Here you can read about:

The UNFCCC & COPsThe Climate Group
The Kyoto ProtocolThe GHG Protocol
The Paris AgreementISO14064
UN Sustainable Development GoalsFuel Mix Disclosure
Renewable Energy TargetsUK FIT/CFD Exemptions
The Re-Diss Project

Oliver Germeroth

+49 179 6612 758

…and don’t forget, our Glossary and Abbreviations page is available if needed!

United Nations Framework Convention on Climate Change (UNFCCC) & Conference of the Parties (COP)

The objective of the UNFCCC is to ‘stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system’

Since its inception in March 1994 the UNFCCC has attracted 197 global members, all of whom seek to participate in measures and initiatives aimed at preventing such dangerous human [anthropogenic] interferences

Members of the UNFCCC are referred to as Parties to the Convention, and a COP is a Collection of the Parties. A list of these events can be found here

The first implementation of measures under the UNFCCC was The Kyoto Protocol

The Kyoto Protocol

In December 1997 the Conference held in Kyoto, Japan agreed the text of what is now called the Kyoto Protocol

The meeting was facilitated by the Earth Summit (1992) in Rio de Janeiro where countries initially joined the international treaty titled the United Nations Framework Convention on Climate Change (UNFCCC)

The United Nations Framework Convention on Climate Change by commits industrialised countries and economies to limit and reduce greenhouse gases (GHG) emissions in accordance with pre-agreed individual targets

It stipulated explicit and quantitative targets for countries to reduce their greenhouse gas emissions in the period of 2008 to 2012 when compared to 1990 levels

The Kyoto Protocol imposed legally binding emissions objectives on nations and allowed their national commitments to be met through mechanisms such as emissions trading

This could be achieved by trading emissions credits and were represented in the form of green certificates, emission reduction certificates and forms of renewable obligation certificates

The Kyoto Protocol commits industrialised countries to limit and reduce greenhouse gases (GHG) emissions in accordance with pre-agreed individual targets

In Doha (2012), the Doha Amendment to the Kyoto Protocol was adopted for a second commitment period, starting in 2013 and lasting until 2020

The Paris Climate Agreement (2015) replaced the Kyoto Protocol


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The Paris Agreement (COP21)

The 2015 Paris Agreement, also negotiated under the United Nations Framework Convention on Climate Change (UNFCCC), intended to stabilise greenhouse gas concentrations in the atmosphere

The overall objective of the Paris Agreement was to keep the global temperature rise well below 2 degrees Celsius above pre-industrial levels and to pursue causes which limit temperature increases even further to 1.5 degrees Celsius

Participating Government’s agreed to:

  • Meet every 5 years to set more ambitious targets as required by science
  • Report on how well they are doing to implement their targets
  • Track progress towards the long-term goal through a robust transparency and accountability system

The Agreement was the first-ever universal, legally binding global climate change agreement

It is the Katowice Package adopted at COP24 (2018) which contains guidance and procedures which seek to implement and standardise aspects of the Paris Agreement


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United Nations Sustainable Development Goals (UN SDGs)


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Renewable Energy Targets

Over 60 countries worldwide have established renewable energy policies and targets in relation to electricity. Those targets typically form part of a Government’s legislation which requires that electricity suppliers source specific proportions of their total electricity sales from renewable energy sources, within a given time frame

The purpose of such schemes is to promote renewable energy and reduce dependency on fossil fuels. As the cost of renewable power production becomes cheaper than those from using alternative sources, meeting and exceeding a renewable energy target will in turn reduce the cost of electricity to consumers

Renewable electricity can be produced by a wide variety of sources including wind, solar, hydro, tidal, geothermal, and biomass. By diversifying the renewable generation mix in order to meet energy needs, the EU lowers its dependence on imported fossil fuels and makes its energy production more sustainable

In Europe, all countries had adopted national renewable energy action plans to demonstrate the actions which they intend to take in order to meet their renewables targets by 2020

Countries within the EU had set their own individual renewable energy targets which ranged from 10% consumption in Malta to 49% consumption in Sweden. Furthermore, there had been a requirement for each nation to have at least 10% of its transport fuel sourced from renewables by 2020

In Europe, 28 European Union member states had set legally binding renewable energy targets. The EU had a baseline target of 20% by 2020, as the IRENA chart documents below

The RE-DISS Project

The RE-DISS project aimed to improve the reliability and accuracy of the information given to consumers of electricity in Europe. This was done through documenting the origin of the electricity which is consumed

This information is ultimately given to all consumers through the regime disclosure, which is a requirement on all European suppliers of electricity

The first phase of the RE-DISS project was launched in 2010 and resulted in recommendations on how to implement and correctly administer guarantees of origin as the mechanism of disclosure. Guarantees of Origin (GOs) were created by the RES Directive and the Cogeneration Directive

RE-DISS II saw the introduction of the annual electricity residual mix and subsequent calculation methodology, which is to be used in all European countries where the origin of consumed electricity is unknown through disclosure. It also saw the development of best practice recommendations towards the Competent Bodies that regulate disclosure systems, and saw the development of country profiles for the EU28+CH+IS+NO nations. These described the respective national systems for guarantees of origin

The overall objectives of RE-DISS were to:

– Support Competent Bodies in improving their GO and disclosure systems

– Allow for a coordinated operation of tracking and disclosure policies by providing centrally processed data to Competent Bodies and market actors

– Monitor the implementation of policies related to tracking of electricity as imposed by EU Directives

– Develop methods, processes and governance structures needed for central coordination of a European Tracking System

– Develop recommendations and guidelines both to Competent Bodies and to other stakeholders helping to improve the informative value of disclosure for end consumers

The Climate Group

RE100 was launched in New York in 2014 and since then has grown on a global scale

The initiative is committed to seeing to its members use 100% renewable electricity and therefore increase the global demand of renewable power

Companies which join the initiative are strongly encouraged to set public goals in their drive to source renewable power for their consumption

The initiative is driven by The Climate Group in partnership with CDP


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The Climate Group’s global EP100 initiative in partnership with the Alliance to Save Energy aims to bring together energy-smart companies that are committed to

  • Using energy more productively
  • Lowering greenhouse gas emissions
  • Accelerating a clean economy

EV100 is a global initiative bringing together forward looking companies committed to accelerating the transition to electric vehicles (EVs) and making electric transport the new normal by 2030

The transport sector is the fastest-growing contributor to climate change, accounting for 23% of global energy-related greenhouse gas (GHG) emissions

Electric transport offers a major solution in cutting millions of tons of greenhouse gas emissions per year, as well as curbing transport related air and noise pollution


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The GHG Protocol

Created by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) in 1998, the Green House Gas Protocol (GHGP) provides an international standard for, and guidance towards, corporate accounting and emissions reporting

It provides provides guidance in the areas of accounting, reporting, calculation tools and offers training services

The GHGP is well known for classifying an entity’s emissions within the categories of either Scope 1, 2 or 3, based on the emission source and as such has become the most widely used accounting tools to track GHG emissions

GHGP Scope Summary


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ISO 14064

ISO 14064-1:2006 specifies principles and requirements at the organisation level for quantification and reporting of greenhouse gas (GHG) emissions and removals

It includes requirements for the design, development, management, reporting and verification of an organization’s GHG inventory

ISO launched the development of ISO 14064 in 2002 as a solution to the problems posed by the fact that governments,

business corporations and voluntary initiatives were using a number of approaches to account for organization- and project-level GHG emissions and removals with no generally accepted validation or verification protocols

Fuel Mix Disclosure

An electricity fuel mix considers the volumes consumed within a period of time and the volume of certificates that are presented to evidence this consumption to a specific fuel source

In Europe, the most common approach is for the consumed volume of year X to be documented in origin with GOs cancelled up until the end of March year X+1. However, there are several variations

The Netherlands are able to cancel GOs until the end of December year X+1 for year X consumption whilst Luxembourg has a deadline of May 15th in year X+1 for volumes consumed in calendar year X

The European Guarantee of Origin (GO) system has enabled accountable interchange of electricity attributes between national markets

Most EECS member states are able to trade their GO production openly and they can be used for disclosure purposes, within the associated disclosure period, in other member states. However, this means that differences arise between the generation mix and fuel mix of a nation

Where GOs are not presented to document consumption the volume in question is subject to the residual mix calculations of the AIB

The AIB explain that “A residual mix is needed for reliable disclosure of electricity consumption where Guarantees of Origin (or in some cases other legally accepted tracking instruments) are not used. Due to the international nature of both the power market and the Guarantee of Origin (GO) market, centrally calculated residual mixes and the European Attribute Mix is needed. Energy authorities use the results of the calculation either directly or to calculate the residual mix for their respective country using national rules

UK FIT/CFD Exemptions

There is demand for Guarantees of Origin certificates in the UK from generators which meet certain criteria

If correctly administered, a licensed electricity supplier is able to reduce their market share contribution within the Feed in Tariff and/or Contract for Difference levelisation process