Simone Accornero, EUSEW Young Energy Ambassador, has sparked a crucial debate by highlighting the rapid growth of corporate renewable energy procurement in Europe, which surged by over 52% in 2023, reaching 20 GWs. However, this growth is not without controversy. Academic papers and leading media outlets have questioned the genuine emission reduction behind these figures, casting doubt on the credibility of companies’ environmental claims. Critics argue that the current system, which allows companies to purchase certificates like Guarantees of Origin (GoOs) without strict rules on origin and timing, does not always result in tangible emission reductions or incentivise new renewable energy generation. This has led to market distortions, such as Norway exporting more GoOs than actual renewable electricity.
The debate is further complicated by the varying rules within the EU. The RFNBO Delegated Act imposes strict rules for proving renewable electricity use in green hydrogen and ammonia, requiring local generation, same-hour consumption, and new power plants. This aligns with recent US rules under the 45V Clean Hydrogen Tax Credit. However, the Carbon Border Adjustment Mechanism (CBAM) and the EU’s renewable electricity reporting rules for Data Centers (EU 2024/1364) have laxer rules. The EV Batteries Delegated Act takes an even stricter stance, not allowing renewable energy procurement to reduce embedded emissions, sparking outcry from companies and trade associations.
The Corporate Sustainability Reporting Directive (CSRD) introduces mandatory reporting for large companies, listed SMEs, and non-EU firms with significant EU activity. However, the rules for renewable energy usage claims are based on the GHG Protocol Scope 2 Guidelines, which are currently being revised, leaving uncertainty about future requirements.
This debate is pivotal as society strives to electrify energy usage, decarbonise electricity generation, and link financial and carbon markets. Accornero urges the EU to support renewable energy procurement with clearer and stricter rules that incentivise developing additional renewable energy capacity. Improved rules and stringent mandatory reporting can drive lasting climate impact and bolster the EU’s industrial resilience.
The EU’s approach to corporate renewable energy procurement will significantly shape the sector’s development. Clearer rules could enhance the credibility of companies’ environmental claims, drive real emission reductions, and incentivise new renewable energy generation. This could position the EU as a global leader in climate transition and policy innovation. Conversely, lax rules could undermine these efforts, leading to market distortions and undermining the EU’s industrial competitiveness. The EU’s decision will also influence global standards, as other regions look to the EU for guidance on corporate renewable energy procurement.
