Biomethane guarantees of origin: how they work and how to avoid double counting

A guarantee of origin (GO) is an electronic document confirming that a specified quantity of energy – usually 1 MWh – was produced from renewable sources, including biogas and biomethane. Its sole task is to show the end customer what the share of renewable energy is in the product being sold. A GO is neither a sustainability certificate nor an instrument of support, but it is the basis of reliable trade in "green gas", because it separates the environmental attribute from the physical gas and allows it to be sold separately.

Legal basis

The provisions of the RED II directive (Article 19) oblige Member States to introduce a system of guarantees of origin for energy from renewable sources, at the request of the producer. The system covers the issuing, transfer and cancellation of guarantees, rules of mutual recognition between states and protection against double counting. For renewable gas these requirements are implemented by national registers and supplementary European systems.

The life cycle of a guarantee

1. Production: the installation feeds biomethane into the grid, and the measurement confirms the quantity of energy.
2. Issuing: at the producer's request, the competent body or register operator issues GOs in a quantity corresponding to the energy produced (1 MWh = 1 GO).
3. Transfer: a GO can be sold independently of the gas. The buyer acquires the right to declare the consumption of renewable energy.
4. Cancellation: when consumption is declared, the guarantee is cancelled, so it cannot be used again.
5. Expiry: an uncancelled guarantee loses validity after the period specified in the regulations (in principle 12 months from the production of the energy).

What a GO does not do

• It does not determine the sustainability of feedstocks and GHG emission reduction – that is the task of certification (e.g. ISCC).
• It is not an instrument of financial support (it does not replace tariffs, auctions or premiums).
• It does not guarantee physical delivery of gas to a specific customer (mass balance in the grid).
• It is not used for accounting for transport targets (separate mechanisms serve that), although it is often supplementary evidence.

Double counting

The greatest risk is a situation in which the same energy is used in two places: e.g. as biomethane in transport (for an emission reduction target) and as renewable energy in heating on the basis of a GO. To avoid this, the following are used:

1. Registers: one GO – one consumption.
2. Separation of attributes: when the green attribute has been used for one purpose (e.g. in transport), GOs are not issued for the same quantity or they are marked.
3. Mutual recognition and databases: in the EU, systems for exchanging information between registers and databases of renewable fuels are being developed.
4. Audit: certification bodies check whether the quantity of energy in the declaration corresponds to the volume.

Calculation example

Assumptions: a biomethane plant injects 36 GWh a year. 36,000 GOs are issued. The producer sells 24,000 GOs to an industrial customer, which cancels them in the register as proof of consumption of 24 GWh of green gas. The remaining 12,000 GOs it keeps or sells to another entity. If it were to sell this remaining volume of 12 GWh at the same time as biomethane for transport fuel with sustainability documentation, it must ensure that GOs for this volume have not been issued or have been appropriately marked. Otherwise 12 GWh would be counted twice.

How a GO affects revenue

The price of a GO depends on demand and quality (country of origin, type of feedstock, year of production). It is an element of the premium for green gas. In a PPA it is worth specifying who owns the GOs and by when the producer transfers them. A provision prohibiting "double sale" protects both parties.

Practical tips for the producer

Register the installation in the appropriate register before start-up, so that the first volumes can be covered by guarantees. Maintain consistency of measurement data: the volume from the gas meter, the gross calorific value from the chromatograph and the data in the register should agree. Make sure that gas sales agreements state clearly whether GOs are the subject of the sale or remain with the producer, and by when they are transferred. For international sales, check whether the registers are connected to each other and whether the buyer recognises the GOs of the given country.

Summary

Guarantees of origin are a simple tool that enables trade in green gas and provides information to customers. For it to work reliably, registers, control and clear rules on combining GOs with other instruments are needed.