Hourly matching
Hourly matching, or granularity for renewable certificates, remains a hot topic. While hourly matching has been discussed as a theoretical concept in the field for years already, the Renewable Energy Directive III (REDIII) left the door open for EU-member countries to start adapting this approach in practice.
REDIII allows member countries to issue GO as fragments of the default size of 1 MWh. This change is fundamentally important to the adoption of hourly matching, as those certificates would have to be issued on an hourly basis.
It is, nevertheless, still unclear how EU countries will use this opportunity. As already discussed in a previous blog post, the introduction of hourly matching would require significant investments in IT infrastructure by National Issuing Bodies. Furthermore, It is not impossible this could lead to regional variations in GOs legislation.
In 2024, we will see how national regulators approach both REDIII and Renewable Fuels of Non Biological Origin (RFNBO). These regulations will require hourly matching in 2023 for claims made relating to renewable fuels for the transportation sector.
Demand drivers: ESRS, CSDRD, Green Claims directive
The European Union has taken a firmer approach towards greenwashing and lax sustainability reporting. These changes are reflected in the new regulation that will effect an increasing amount of European companies in the coming years. These changes are discussed in more detail in this blog post.
These changes will affect a significant number of European companies. For instance, the sustainability reporting criteria set out in the Corporate Sustainability Directive will influence the reporting duties of over 50,000 European companies.
As sustainability reporting becomes an increasingly integral part of financial reporting (as outlined by the Sustainable Investment Taxonomy) related matters such as using renewable power will have a level of influence like never before.
For instance, procuring Guarantees of Origin to evidence a business' renewable energy guarantees could profoundly impact the financing terms a business receives.
Additionally, the Green Claims Directive requires any green claims made to be precise, scientifically verifiable and relevant to the product as a whole.
While energy origin related claims have been backed up GOs for years, it is possible that the green claims directive could makes the use of Guarantees of Origin more attractive to companies that have sought to reduce their carbon footprint in other ways up until now.