How do Guarantees of Origin (GOs) support renewable energy policies?

As the continent pushes toward climate neutrality by 2050, ensuring transparency in renewable electricity sourcing has never been more critical. Guarantees of Origin (GOs) serve as the backbone of this effort, providing a standardised certification system that verifies electricity's renewable credentials.

Whether you're an energy buyer, policy advisor, or corporate sustainability leader, understanding how GOs support renewable energy policies is essential for navigating the evolving energy landscape and meeting climate targets.

What are Guarantees of Origin (GOs)?

A Guarantee of Origin (GO) is an electronic certificate proving that one megawatt-hour (MWh) of electricity was produced from a renewable energy source. Its core purpose is to disclose the renewable origin of electricity to end consumers, offering a mechanism for traceability in energy markets.

Introduced under the European Union’s original Renewable Energy Directive (2001/77/EC) and further strengthened in subsequent legislation, including RED II and RED III, GOs supported transparency in green energy use and allowed market participants to make informed choices. Unlike other certificate schemes such as the U.S.-based Renewable Energy Certificates (RECs) or the International Renewable Energy Certificates (I-RECs), GOs are specific to Europe and operate under a harmonised regulatory framework.

The legal basis for GOs is established in the Renewable Energy Directive (EU) 2018/2001 (RED II), which mandates that EU Member States issue GOs in response to a request from a renewable electricity producer. This ensures that renewable generation is tracked and accounted for in national and corporate energy disclosures.

How do GOs work in practice?

Every single time a renewable energy generator produces 1 MWh of electricity, a corresponding GO is issued through a national issuing body. These bodies are typically energy regulators or transmission system operators (TSOs) that maintain national GO registries.

The lifecycle of a GO involves several stages:

• Issuance: a GO is created for each MWh of renewable electricity produced. 

• Transfer: GOs can be traded across national borders or sold to third parties, typically via energy traders or suppliers.

• Cancellation: once a GO is used to prove renewable energy consumption, it is cancelled in the registry, ensuring it cannot be used again.

Key here is the Association of Issuing Bodies (AIB), which manages the AIB Hub, a centralised platform that facilitates cross-border GO transfers and ensures standardisation across Member States. This consistency is vital for energy procurement professionals coordinating renewable energy sourcing across multiple markets.

For example, a corporate buyer in Germany may purchase GOs linked to a hydropower plant in Norway. Once the electricity is consumed, the GO is cancelled in the central registry, and the business can report verified renewable energy use in sustainability reporting.

With these certificates in circulation, the next question is: how do they shape renewable energy policies?

What is the role of GOs in renewable energy policies?

Guarantees of Origin play a foundational role in renewable energy policy implementation by providing:

• Traceability: GOs allow stakeholders to identify the origin, type, and date of renewable electricity production, enabling trustworthy claims.

• Verification: national regulators and auditors rely on GOs to confirm corporate and governmental renewable energy usage, supporting accurate reporting and policy tracking.

• Transparency: by offering a clear audit trail, GOs help validate green marketing claims and environmental disclosures.

• Demand-side participation: by purchasing and cancelling GOs, consumers can support the market for renewables, even if direct physical delivery is not feasible.

For corporate sustainability teams and ESG managers, GOs are integral to annual emissions disclosures and carbon reduction strategies, especially as environmental standards become more rigorous.

GOs and European Union climate targets

The European Green Deal and successive updates to the Renewable Energy Directive (RED II and RED III) have reinforced the importance of GOs in achieving climate neutrality by 2050. Under RED III, the EU has raised its binding renewable energy target to 42.5% by 2030, with a goal of reaching 45%.

GOs support these goals by:

• Facilitating cross-border recognition: GOs allow countries to acknowledge imported renewable electricity, supporting internal market integration.

• Tracking National Energy and Climate Plans (NECPs): member States use GO data to measure progress against targets and report to the European Commission.

• Driving decarbonisation: by enabling market participants to purchase renewable energy voluntarily, GOs stimulate additional demand, indirectly supporting investment in clean generation capacity.

This is especially relevant for energy policy advisors crafting national frameworks and regulatory reforms aligned with EU climate targets.

How businesses use GOs to meet sustainability goals

For companies aiming to reduce their environmental footprint, GOs offer a flexible, scalable way to source green electricity without engaging in complex infrastructure projects.

Key applications include:

• Procurement strategies: GOs are often bundled with green tariffs or used in conjunction with power purchase agreements (PPAs) to evidence renewable energy sourcing.

• Scope 2 emissions reduction: under the Greenhouse Gas Protocol, GOs can be used in the market-based method to reduce reported Scope 2 emissions.

• ESG and CDP reporting: many ESG frameworks require disclosure of renewable energy use. GOs provide verifiable documentation for submissions to CDP, GRI, and other platforms.

• Distinguishing procurement methods: it’s important to note that buying renewable electricity through a green tariff includes both physical energy and the associated GO, while purchasing a standalone GO is a contractual claim, not a physical supply guarantee.

Energy procurement professionals and environmental consultants increasingly rely on GOs to deliver cost-effective decarbonisation strategies and maintain compliance with sustainability frameworks.

Benefits and criticisms of the GO system

Benefits

1. Market transparency: GOs provide a clear and standardised method of verifying renewable electricity use.

2. Demand stimulation: by assigning value to renewable energy consumption, GOs encourage investment and consumer choice.

3. Voluntary adoption: the system offers flexibility, allowing various players to participate and support the energy transition.

Criticisms

1. Additional concerns: GOs do not guarantee that renewable energy purchases lead to new generation capacity. But does buying a GO truly mean your electricity is green? That depends on how the system is structured. Critics argue that some purchases may merely shift existing clean power rather than drive new investment.

2. Risk of double counting: without robust registry systems, there is potential for the same unit of renewable energy to be claimed by multiple parties.

3. Consumer confusion: there is often a misunderstanding between purchasing renewable electricity and purchasing GOs, potentially undermining the perceived credibility of green claims.

These criticisms highlight the need for ongoing reforms and enhanced consumer education, particularly for corporate sustainability teams and ESG managers who must ensure accurate and defensible reporting.

Guarantees of Origin are a cornerstone of Europe’s renewable energy landscape. As a reliable, standardised tracking system, they enable transparency, support consumer choice, and underpin renewable energy policies across the continent. For energy policy advisors, renewable energy developers, and business leaders, GOs offer a practical means of evidencing green electricity use and contributing to long-term climate goals.

Despite limitations around additionality and market understanding, the value of GOs as a verification and reporting instrument is clear. As Europe accelerates towards its 2030 and 2050 targets, GOS will continue to serve as a vital tool, connecting the production and consumption of renewable electricity through a system of trusted certification.