Green energy

Using green electricity is a relatively simple way to reduce a company's CO2 emissions. Many companies opt for this measure. The CO2 Performance Ladder sets strict requirements for what is meant by “green electricity”, see page 34 of Handbook 3.1. Below we give a brief explanation of what green electricity means according to the Ladder and we explain the most important concepts.

What is green energy according to the CO2 Performance Ladder?

Green electricity is understood to mean electricity generated by sun, wind, water or biomass. Two things are important for green energy in the Ladder: additionality and demonstrability with Guarantees of Origin (in Dutch: GvOs).

Additionality

De Ladder considers it important that the purchase of green energy actually leads to the production of green energy. This is called "additionality" in jargon of the Ladder and means that the purchase of green energy by a company leads to more production capacity of green energy. This ensures that the market for green energy is stimulated.

Demonstrable with GVOs

All green energy sources receive certificates that show that they produce green energy. For every MWh of renewable electricity produced, a certificate is issued, a Guarantee of Origin (in Dutch: GVO). It must be demonstrable to the Ladder that your green energy is actually green energy. This is demonstrable with these GVOs, which are issued by CertiQ.

Green energy products

With the Green Power Checker from the HIER foundation you can trace the origin of green power products. The information in the Green energy checker is based on the energy labels that energy suppliers must publish annually in May, supplemented with information that HIER requests from energy suppliers about the origin of these energy products. The checker was updated in May 2020 in response to the electricity labels for 2019. It is the responsibility of the customer to check whether the green energy product meets the requirements of the CO2 Performance Ladder.

Can I also purchase green energy from abroad for the CO2 Performance Ladder?

The short answer is no. The reason for this is that the purchase of foreign green energy GVOs does not in practice lead to an increase in the production of green energy.

Suppose we look at Norway. That country only has green electricity, partly due to their large hydropower plants. As a result, no Norwegian is interested in a GVO of green electricity, because everyone uses green electricity. A number of Dutch energy companies buy the GVOs from Norway for a negligible amount and sell them in the Netherlands as green energy. In practice, the purchase of this electricity by companies does not lead to the production of extra green electricity, not in the Netherlands and not in the country of origin.

In theory, this problem can be solved by ensuring that green energy IMPs in Norway get a higher price. The logical way to do this is by linking the GVOs to a country's renewable energy obligation. This means that if a green energy GVO for Norwegian electricity leaves the country, because it has been sold to the Netherlands, for example, it will be deducted from the sustainable energy production in Norway. And if this electricity is used in the Netherlands, it will be added to the Dutch sustainable energy production. After all, the electricity is then used in the Netherlands, so trade fairly.

If this link were to exist, the sale of green energy GVOs from Norway to the Netherlands could result in Norway having to produce extra green energy to meet its obligation (and the Netherlands less), because of additionality.

Based on this reasoning, we have included requirement 3.2 in Handbook 3.1:

“3.2 The electricity is imported from a member state of the European Union or another country that has agreed an EU renewable energy target with the European Commission. The Netherlands does not have these agreements. In all cases under 3.2, it must be demonstrated that the exporting country deducts (not counts) the emission reduction as a result of the exported electricity under the EU renewable energy directive in the reports to the European Commission. " (Handbook 3.1, page 35)

This shows that we are not fundamentally against imports, but that we are sticking to the principle of additionality.

Why are the requirements so strict?

The idea behind the CO2 Performance Ladder is "to reduce CO2 together". By ensuring that certified organizations only purchase green energy that actually stimulates the production of green energy, a larger market for green energy is created. After all, more demand means more production. And this reduces CO2 emissions.

As explained in the previous questions, we can only demonstrate this at the moment for GVOs for green energy from the Netherlands.

Emission factors

Only green energy from the Netherlands can be counted with the emission factor for green energy. For green energy from abroad, the emission factor for gray energy applies. For the emission factors, see www.co2emissiefactor.nl

Green energy from biomass

When green energy is obtained from biomass, the default value for the gray energy emission factor applies, unless the supplier of the biomass energy has determined a different value according to a specific method. The accepted methods for biomass are described in Handbook 3.1, page 36.

How much space does requirement 3.2 from the Manual 3.1 of the CO2 Performance Ladder offer?

 The reality is that the system of green energy certificates in the EU is currently not linked to the sustainable energy obligation of countries, see the explanation for question 2. The discussion about this link is regularly recurring because practice shows that one country can relatively easily fulfill its obligation and also produce more, while the target is more difficult to achieve for another country.

This means that foreign green energy GVOs are currently no proof that the purchase of green energy by a company leads to more production capacity for green energy.

If there is a specific case in which you believe that you are unable to comply with the above, you should contact SKAO (via [email protected] or 0307116800). In very exceptional situations, an exception may be made to this rule. The alternative can then only be realized in consultation with and with the approval of SKAO.

As soon as something changes about this situation, SKAO will communicate this extensively and adjust it in the Handbook.