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Glossary · Energy industry & energy transition

Book-and-Claim

Book-and-claim certificate Guarantee of origin Carbon footprint electricity procurement supply chain

Concept and basic principle

Book-and-claim refers to an attribution model in which the physical delivery of a product, a form of energy or a raw material is separated from an attribute assigned for accounting purposes. A producer creates a specific attribute, for example renewable electricity, low-emission hydrogen or sustainable fuel. This attribute is registered in a tracking system ("book") and sold as a certificate or claim. Another market participant can acquire the claim and assert it in its own accounts ("claim"). This also applies if that participant physically receives a mixed product from a grid, a pipeline, a tank storage facility or a supply chain.

In the electricity sector, the guarantee of origin (GO; German: HKN) is the best-known case. A wind farm generates one megawatt hour of electricity and, upon application, receives a guarantee of origin for it. This certificate can be traded independently of the electricity. Later it is cancelled so that an electricity supplier or a company can report that megawatt hour as renewable for accounting purposes. Physically, the electricity does not flow specifically from the wind farm to the buyer. It enters the power grid, in which generation and consumption must be balanced electrically at every moment. One can picture this as a lake: many inflows feed it, many users draw from it, and no one can say which inflow their water came from. The certificate only documents who fed in how much of which quality and who claims that quality for themselves.

Unit and informative value of a certificate

For electricity, the reference quantity is an amount of energy, not power. Under the EU Renewable Energy Directive (EU) 2018/2001, a guarantee of origin by default covers 1 MWh. At most one certificate may be issued for each unit of energy produced. Since the amendment by Directive (EU) 2023/2413, the standard size may also be divided into fractions, provided these are a multiple of 1 Wh. A certificate for one megawatt hour initially states only that, somewhere within the scope of the certification system, a corresponding quantity of energy with the registered attribute was generated. It does not necessarily state whether this generation took place at the same time as the buyer's consumption or was located in the same grid area. Nor does it show whether the plant was built additionally or whether the purchase actually displaced fossil generation.

Which information a certificate must carry is determined by the respective system. In the EU, this includes, among other things, the energy source, the start and end of production, the location, type and capacity of the plant, the date of commissioning, and information on whether and which support the plant has received. Under the amended version of the Directive, the imbalance settlement period is additionally stated for renewable electricity. This makes a more precise allocation in time technically possible. For proof of consumption towards final customers, a guarantee of origin is valid 12 months after the production of the respective energy unit.

Distinction from physical delivery and mass balance

In a physical delivery, a product is transported along a supply chain and allocated to the buyer, for example gas through a pipeline or fuel via tank storage and logistics. In the power grid, individual electrons practically cannot be attributed, because feed-in and withdrawal balance each other through electrical states. A supply contract with a specific power plant, such as a corporate PPA, does not change this either. It can link payments, balancing groups and certificates with one another, but it does not determine the physical path of the electricity.

Book-and-claim must also be distinguished from the mass balance model. There, a sustainable share in a common production or supply flow is carried forward for accounting purposes, but remains tied to a specific chain. The quantity reported as sustainable must not exceed the quantity fed in. Book-and-claim is freer, because the claim is traded entirely without the physical commodity. This freedom facilitates the market but places higher demands on registries, rules and transparency. For fuels and hydrogen, it must therefore be checked case by case whether a particular set of rules recognises book-and-claim at all or requires a mass balance. Voluntary schemes and statutory quota rules sometimes differ markedly here.

Legal framework for electricity in the EU and in Germany

In the EU, Directive (EU) 2018/2001 defines the guarantee of origin as an electronic document whose sole function is to provide evidence to final customers of the share or quantity of energy from renewable sources. Member States must ensure that certificates are issued, transferred and cancelled electronically and that the same energy unit is taken into account only once. Where a producer receives support, the market value of the certificate must be taken into account appropriately. In that case, Member States may also refrain from issuing it altogether.

In Germany, the Federal Environment Agency (Umweltbundesamt) operates the guarantee-of-origin register under § 79 EEG 2023. It issues guarantees of origin per megawatt hour of electricity generated and supplied to final consumers, transfers them and cancels them. They are issued only for electricity for which no payment under § 19 or § 50 EEG is claimed, so for example no market premium and no feed-in tariff. Electricity from plants supported under the EEG therefore generally does not generate tradable guarantees of origin. The certificates are used mainly for suppliers' electricity labelling.

Benefits of the model

Book-and-claim makes attributes tradable that could not be delivered separately in physical terms at all, or only at high cost. Renewable attributes thus also reach customers without direct access to a particular power plant. Companies can structure their electricity procurement for accounting purposes, suppliers can offer green electricity products, and operators of renewable plants gain an additional source of revenue. In international supply chains, demand for lower-emission products can also be pooled without physically tracking every movement of material.

Limits and typical misunderstandings

This advantage is at the same time the central weakness. A book-and-claim system reflects an accounting attribution, not a physical supply. Whoever buys a certificate has not thereby proven that their site was supplied with renewable electricity at the times of consumption. At the connection point, the real mix of generation, imports, storage and load flows continues to arrive. For physical supply, what counts is frequency maintenance, grid bottlenecks, power plant dispatch, residual load and available flexibility. Who subsequently holds a guarantee of origin plays no role in this.

A common misunderstanding equates green electricity in accounting terms with immediate freedom from emissions. A company can purchase guarantees of origin for its annual consumption and report its market-based electricity footprint with low emissions under the applicable rules. It does not follow, however, that its consumption was covered emission-free in every hour. An example: a data centre draws a high load at night and covers it, in accounting terms, with solar certificates from midday. Annual quantity and claim then match, but the physical supply at night comes from a completely different generation mix.

Quality requirements: registry, cancellation, residual mix

How robust a book-and-claim system is depends on its rules. The registry must ensure that each attribute is issued, transferred and cancelled only once. Only cancellation prevents the same claim from being used several times. In addition, clear system boundaries are needed: which plants may participate, which geographical area and which period apply, and which information on technology, commissioning and support is carried along. For electricity certificates, the residual mix is added. EU law defines the residual energy mix as the annual total energy mix of a Member State excluding the share covered by cancelled guarantees of origin. Expired certificates are included in its calculation. Without this adjustment, the same renewable generation would be counted once for the certificate buyer and a second time in the average mix of all other customers.

Significance for climate accounting

Book-and-claim is particularly important for climate accounting because the Greenhouse Gas Protocol distinguishes between two methods for Scope 2 emissions (location-based and market-based accounting). The location-based method uses an average emission factor of the grid. The market-based method takes into account contractual instruments such as guarantees of origin, electricity supply contracts or comparable certificates. The first describes how a consumer is integrated into the real electricity mix at its location. The second shows which procurement-related claims it has acquired and cancelled.

These rules are currently being revised. In July 2025, the Independent Standards Board of the GHG Protocol approved proposals for public consultation. Accordingly, contractual instruments in the market-based method are in future to be matched to consumption on an hourly basis and to originate from a grid region into which the electricity can actually be delivered. Relaxations are envisaged, for example load profiles instead of measured hourly values, thresholds exempting smaller organisations, and transitional rules for existing contracts. The proposals are not yet in force. Until the process is completed, the 2015 Scope 2 Guidance with annual matching continues to apply.

Economic incentives and additionality

When certificates are scarce and valuable, they improve the revenues of plants with the proven attribute. When they are very cheap, for example because older hydropower plants generate large quantities of certificates, the additional investment incentive remains low. This is why additionality is often asked about: does a buyer's demand help to enable additional renewable generation, new production capacity or lower-emission processes? Book-and-claim alone does not guarantee this effect. It can arise through stricter procurement criteria, for example long-term contracts with new plants, more precise matching in time, or regional proximity to consumption.

From annual accounting to temporal and spatial matching

An annual certificate can offset one megawatt hour of generation in May against one megawatt hour of consumption in December. Under existing accounting rules, this may be permissible. For the operation of a power system with a high share of weather-dependent generation, however, this offsetting says little. What matters there is whether consumption can be shifted to hours with high renewable feed-in, whether storage is available, whether grids can transport the power, and which power plants cover the remaining load. Approaches of temporal matching with hourly or even finer allocation are intended to narrow this gap. The EU requirement to state the settlement period for electricity GOs creates a technical basis for this.

Assessment

Book-and-claim is neither mere labelling fraud nor proof of physical delivery. It is an institutional instrument that makes attributes tradable and orders claims. Its informative value extends only as far as the rules of the registry, the quality of the certificates and the transparency of the accounting. Whoever uses the term properly separates four levels: physical electricity flow, contractual procurement, accounting attribute and actual emissions impact. It is precisely this separation that shows what effect a booking may claim and where technical supply, market incentive and climate accounting must be considered separately.

Sources

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Edited by eCMS on 11.11.2026 16:15

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