Guarantees of Origin, Renewable Energy Certificates, the Residual Mix
and carbon offsetting in LCA

Guarantees of Origin and Renewable Energy Certificates

A Guarantee of Origin (GO) is an numbered electronic green label in the EU, that guarantees that one MWh of electricity has been produced from a renewable energy source. GOs are traded independently from the electricity trade. When an end-user buys a GO for electricity consumption from the grid, it is cancelled at the issuing body’s registry in the country of consumption. Most of the issuing bodies of EU member states are member of the Association of Issuing Bodies (AIB), where they jointly agreed upon the EECS (European Energy Certificate System) rules to make sure GOs are issued and traded in the same way. This system makes it possible to track ownership of GOs, and ensures that there no more GOs created than that renewable electricity is produced. A GO is issued in a month that follows the production month of the electricity (not always in the month direct after production), and is valid for a period of 12 month to enable trading.

In the USA, a similar system exists: the Renewable Energy Certificates (RECs) [1]. This system is smaller, but seems to be a bit more elaborated than the European system, since there are two types of RECS: bundled and unbundled.
Buying a bundled REC – i.e. electricity + REC – from a (yet-to-be-built) project allows your company to make the “additionality” claim, meaning that your company’s money is directly added to new renewable energy, in order to displace fossil power. Such a transaction is called a PPA (Power Purchasing Agreement). In Europe, these PPAs become also popular for (offshore) wind power and solar energy. Companies are Google, Microsoft, Air Liquide, DSM, Borealis, Philips, Akzo Nobel, Yara. Although the electricity and the GOs are going via different trading platforms, they are bundled in the PPA.
In fact, the ISO 22095 [2], about “chain of custody”, describes “book and claim”  as a system with bundled certificates (the first paragraph Annex B.4.1).