AIB adds feedback to two EU Commission's public consultation

Sustainability reporting standard for voluntary use

"The Association of Issuing Bodies (AIB) welcomes the opportunity to comment on the proposed voluntary sustainability reporting standard for SMEs. Regarding Disclosure B33 (b), It must be noted that, in EU, the location-based method by methodology risks to double-count the renewable energy that is already allocated elsewhere through guarantees of origin (GOs).

Furthermore, it causes an inconsistency with the reporting of electricity and gas suppliers to the SMEs, who are obliged to prove renewable electricity and gas supply with cancellation of guarantees of origin, leading to confused SME owners and their stakeholders and an risking overall societal distrust in any renewable energy consumption claims.

AIB notes that the location-based method may lead to renewable energy claims that are not linked to exclusive ownership of the corresponding renewable attributes, while these attributes may already have been allocated elsewhere through guarantees of origin. Instead, we propose market-based reporting to be mandatory. This ensures consistency with Article 19 of the Renewables Directive (EU) 2018/2001, Annex I, point 5 of the Internal Electricity market Directive (EU) 2019/944 and Annex I, point 5 of the Gas and Hydrogen Directive (EU) 2024/1788.

We recommend the use of the GO for disclosures, since the GO is adequately managed by member states, specifically for ensuring unique ownership tracking and preventing double counting. Note that GOs contain much more detailed information than just the energy source. The guarantee of origin instrument can be used for proving geographic origin, age and capacity of production devices, support types granted, and much more information.

AIB notes that undertakings may receive a different energy source mix from their suppliers disclosure under the Internal Electricity Market Directive (EU) 2019/944 and the Gas and Hydrogen Directive (EU) 2024/1788, than what they choose to disclose themselves under ESRS for the same quantity of energy. This should only be acceptable where the undertaking complements the supplier mix through its own cancellation of guarantees of origin in proportion to its renewable energy claim.

Note on this input: The Association of Issuing Bodies (AIB) is a bottom-up harmonisation initiative of national competent authorities, bringing together 42 issuing bodies for Guarantees of Origin (GOs) in an international nonprofit association. All AIB members are appointed by their national government to administer a GO system. They do so in line with Article 19 of Directive (EU) 2018/2001 (as amended by Directive (EU) 2023/2413).

This document reflects the expert views of AIB as an association, based on its experience in administering the GO system. It does not represent a formal position of individual AIB members. The views expressed should not be attributed to individual members unless explicitly stated."

Revised European sustainability reporting standards

"The Association of Issuing Bodies (AIB) welcomes the opportunity to comment on the revision of the European Sustainability Reporting Standards (ESRS) in particular on the provisions related to renewable energy reporting under AR18 for paragraph 26. AIB would like to highlight the importance of consistency between the ESRS framework and the existing EU framework for energy attribute tracking and disclosure.

1. The draft text allows undertakings to report renewable energy consumption using either a location-based or a market-based approach. AIB notes that this may create inconsistencies with existing EU legislation, where disclosure of renewable electricity and renewable gas towards final customers is based on cancellation of guarantees of origin, in line with Article 19 of Directive (EU) 2018/2001, Annex I point 5 of the Internal Electricity Market Directive (EU) 2019/944 and Annex I point 5 of the Gas and Hydrogen Directive (EU) 2024/1788. The location-based method by methodology risks to double-count renewable claims that are already allocated elsewhere through guarantees of origin. AIB therefore recommends to remove the option of choosing between market based and location-based reporting. Instead we propose market-based reporting to be mandatory. This ensures consistency with the Article 19 of Directive (EU) 2018/2001, Annex I point 5 of Directive (EU) 2019/944 and Annex I point 5 of Directive (EU) 2024/1788.

2. Where the market-based method is backed with a contractual arrangement with the supplier, it is needed that such contractual arrangement is backed with GOs. Indeed, should the supplier rely on contract-based tracking (PPA) while the GOs issued for such production would be sold elsewhere, this would cause double counting of the same renewable attributes.

3. AIB notes that undertakings may receive a different energy source mix from their suppliers disclosure under the Internal Electricity Market Directive (EU) 2019/944 and the Gas and Hydrogen Directive (EU) 2024/1788, than what they choose to disclose themselves under ESRS for the same quantity of energy. This should only be acceptable where the undertaking complements the supplier mix through its own cancellation of guarantees of origin in proportion to its renewable energy claim.

4. AIB notes that guarantees of origin contain significantly more information than only the energy source. GOs can provide information on the geographic origin, production technology, commissioning date and capacity of the production installation, support schemes, and other relevant characteristics. AIB encourages the use of information contained in guarantees of origin for sustainability disclosures, as the GO framework is managed by Member States specifically to ensure reliable tracking of energy attributes, unique ownership tracking and prevention of double counting.

Note on this input: The Association of Issuing Bodies (AIB) is a bottom-up harmonisation initiative of national competent authorities, bringing together 42 European issuing bodies for Guarantees of Origin (GOs) in an international nonprofit association. All AIB members are appointed by their national government to administer a GO system. They do so in line with Article 19 of Directive (EU) 2018/2001 (as amended by Directive (EU) 2023/2413, "RED").

This document reflects the expert views of AIB as an association, based on its experience in administering the GO system. It does not represent a formal position of individual AIB members. Though members were consulted, not all members were involved in drafting the paper, and not all have competence or decision making authority on the matters addressed. The views expressed should not be attributed to individual members unless explicitly stated."