Reducing Scope 2 Emissions with Energy Attribute Certificates (EACs): Strategies and Compliance

Scope 2 emissions arise from the consumption of purchased energy such as electricity, heat, or cooling. Companies can reduce these emissions by switching to renewable energy and using Energy Attribute Certificates (EACs). EACs certify that the electricity consumed comes from renewable sources, helping to reduce Scope 2 emissions on a market-based approach. According to the U.S. Environmental Protection Agency, EACs are a recognized tool for substantiating renewable energy claims and for Scope 2 accounting under the Greenhouse Gas Protocol (EPA, 2024). Reduce Scope 2 Emissions: Energy Efficiency & Cost Savings

Key points:

• Energy Attribute Certificates (EACs): Certificates such as HKN (Germany), GOs (EU), RECs (USA), or I-RECs (global) indicate the origin and characteristics of renewable energy. These certificates are essential for demonstrating the environmental attributes of purchased electricity and are widely accepted in sustainability reporting frameworks.
• Market-based reduction: Companies purchase EACs, retire them, and thus prove their use of emission-free electricity. This approach is endorsed by the GHG Protocol, which requires organizations to report both market-based and location-based Scope 2 emissions (GHG Protocol Scope 2 Guidance).
• Regulatory requirements: The CSRD obliges companies in the EU to report Scope emissions transparently. This aligns with a global trend toward stricter sustainability disclosure, as seen in frameworks like the SEC’s proposed climate disclosure rules in the U.S. (SEC, 2022).
• Strategic integration: EACs are most effective when combined with other measures such as Power Purchase Agreements (PPAs) or energy efficiency projects. For example, companies like Google and Microsoft have adopted 24/7 carbon-free energy strategies, pairing EACs with direct renewable energy procurement to maximize impact (Google 24/7 CFE Whitepaper).

The right EAC strategy, tailored to regional and regulatory requirements, helps companies achieve their climate goals and reduce costs in the long term. As EAC markets mature, prices and availability may fluctuate, making strategic planning and expert guidance increasingly important.

Types of Energy Attribute Certificates (EACs) for Germany

Herkunftsnachweise (HKN) for Germany and the EU

Herkunftsnachweise (HKN or GO) play a central role in tracking renewable energy sources as part of the net-zero strategy. They serve as official proof that the electricity purchased actually comes from renewable sources. In Germany, the Federal Environment Agency (UBA) manages the Herkunftsnachweis register (HKNR), where all German HKNs are documented. Since January 2013, electricity providers in Germany may only use retired HKNs in the HKNR, ensuring that the same electricity is not sold twice.

Although Germany produced around 250 TWh of green energy in 2023, only 37 TWh of HKNs were issued. At the same time, German energy consumers used HKN certificates totaling 185 TWh. The majority of these certificates—about 75%—were imported from Norway. This discrepancy is due to the German double marketing ban, which prohibits subsidized renewable energy plants from issuing HKNs. HKNs also meet the requirements of Article 19 of the EU Directive 2018/2001/EU and are internationally tradable. Registration in the HKNR requires a PostIdent procedure to verify the applicant's identity (UBA, 2024).

Next, we take a look at other types of energy attribute certificates used worldwide.

Other EAC Types: GOs, I-RECs, and RECs

In addition to German HKNs, there are various types of energy attribute certificates that vary by region and market. In most European countries, they are known as Guarantees of Origin (GOs), while in the UK they are called Renewable Energy Guarantees of Origin (REGOs). In North America, Renewable Energy Certificates (RECs) are used, and for global portfolios, International RECs (I-RECs) are available. Some countries also offer special mechanisms, such as Chinese GECs or Australian LGCs. Biomethane certificates are also available to prove the consumption of renewable gas.

Price trends for HKNs indicate that costs are expected to range between €1.77 and €3.36/MWh by 2040 (Agora Energiewende, 2023). Given this diversity, careful selection of the appropriate certificates is essential to meet a company's specific requirements and to ensure compliance with both local and international standards.

How to Choose the Right EACs for Your Company

The choice of suitable energy attribute certificates should be based on three main factors: regional compatibility, regulatory requirements, and your company's sustainability goals. A targeted selection not only supports sustainability reporting but also helps effectively reduce Scope 2 emissions. Companies seeking to make credible claims should use the market-based approach. This approach relies on contractual instruments to clearly define the characteristics of the electricity generated and to accurately calculate greenhouse gas emissions. In contrast, the location-based approach uses the emission factor of the regional power grid and thus provides less specific results (GHG Protocol Scope 2 Guidance). EU Deforestation Regulation Compliance & Geolocation ESG Benefits

To avoid double counting, EACs must be tracked and retired in the name of the reporting company. A particularly effective strategy is to enter into direct, long-term power purchase agreements (PPAs) with operators of renewable energy plants. In addition, the tradability of EACs can promote investment in renewable energy and thus contribute to the energy transition. Power Purchase Agreements (PPAs) & CSRD Compliance

Steps to Integrate EACs into Your Sustainability Goals

How to Document and Report Scope 2 Emissions

The Corporate Sustainability Reporting Directive (CSRD) introduces stricter reporting requirements for European companies. It requires disclosure of CO₂ emissions by Scope 1, 2, and 3. These reports must be included in the management report and comply with the European Sustainability Reporting Standards (ESRS). Demystifying ESRS: A Comprehensive Guide to European Sustainability Reporting Standards and CSRD Disclosure Requirements

The ESRS E1 Climate Change Standard requires companies to disclose the greenhouse gas emissions of their Corporate Carbon Footprint (CCF). Both the location-based and market-based approaches for Scope 2 emissions must be considered, reflecting best practices outlined in global standards (CDP Environmental Reporting Guidance).

The CSRD affects around 50,000 EU companies and is based on data-driven reporting. Emissions reports must be audited by accredited auditors and submitted to the relevant authority.

Practical tip: Start early with trial runs of your CO₂ accounting processes. This allows you to optimize procedures and prepare for the first official reporting cycle. Careful preparation makes it easier to integrate EACs into your sustainability strategy.

How to Procure and Retire EACs

The acquisition of EACs takes place in three steps: Analyze your electricity consumption by market, purchase the required quantities of EACs, and retire them in the register.

Key steps:

• Determine the required amount of EACs based on your electricity consumption.
• Purchase certificates in the same country and for the same usage year.
• Retire the EACs in the register to clearly assign the environmental benefit.
• Choose only trusted providers.

EACs play a crucial role in proving the use of renewable electricity. Retirement ensures that the environmental benefit cannot be claimed more than once. The International REC Standard Foundation provides detailed guidance on best practices for EAC procurement and retirement (I-REC Standard).

Example: In March 2023, Philips signed a long-term agreement for renewable electricity from an innovative fishery-solar PV project in China, supported by South Pole. This highlights how global companies are leveraging EACs and innovative renewable projects to meet ambitious sustainability targets (South Pole, 2023). Once you have integrated EACs into your processes, it is important to comply with all regulatory requirements.

Compliance with EU and German Standards

In Germany, the goal of climate neutrality by 2045 has even been enshrined in the constitution.

"For the first time, our goal of climate neutrality by 2045 is anchored in the constitution,"
explained Matthias Miersch, SPD member of the Bundestag.

The Net-Zero Industry Act (NZIA) of the EU promotes investment in cleantech industries and opens up new market opportunities to achieve the goals of the EU Green Deal. Germany has ambitious plans: By 2030, 215 GW of PV capacity, 30 GW of offshore wind, and 10 GW of hydrogen electrolyzers are to be installed (BMUV, 2024).

Compliance note: The CSRD and the EU Taxonomy Regulation form the central legal framework. Companies should regularly check for updates to stay up to date. EU Taxonomy Omnibus Package 2025 Simplification

Maximizing the Impact of EACs in Decarbonization Strategies

Selecting High-Quality and Regionally Relevant EACs

Choosing the right energy attribute certificates (EACs) is crucial for achieving credible Scope 2 emission reductions. Companies should ensure that EACs come from the same region or country where the electricity is consumed. It is also important that the consumption period matches the generation period (vintage) of the EACs. The technology used also plays a role, as it can affect costs. International standards such as the GHG Protocol, CDP, and RE100 provide clear guidelines for the correct use of EACs. In addition, labels such as EKOEnergy can enhance impact, and hourly matching ensures more precise allocation. This careful selection forms the basis for effective integration into broader decarbonization measures. Notably, the RE100 initiative encourages companies to match renewable energy procurement with actual consumption on an hourly basis, a practice that is gaining traction among sustainability leaders (RE100 24/7 Renewable Electricity).

Combining EACs with Other Decarbonization Measures

EACs reach their full potential when they are part of a comprehensive climate strategy. When combined with energy efficiency measures, direct procurement of renewable energy, and the reduction of Scope 1 and Scope 3 emissions, a holistic approach emerges.

Many companies also rely on long-term measures such as expanding photovoltaic systems, entering into Power Purchase Agreements (PPAs), or implementing further efficiency projects. Unbundled EACs offer the advantage of being sourced cost-effectively from various providers. This allows companies to report all electricity consumption covered by EACs in their sustainability reporting as emission-free.

Strategic procurement of EACs also helps increase demand for renewable electricity and thus drive the energy transition. Modern platforms make trading and reporting EACs easier, promoting transparency and efficiency in renewable energy management. Specialized consulting services are available to support the implementation of such strategies. For example, Microsoft’s approach to matching renewable energy purchases with real-time consumption data has set a new benchmark for corporate decarbonization strategies (Microsoft, 2021).

How Fiegenbaum Solutions Supports EAC Implementation

Fiegenbaum Solutions helps you achieve your sustainable business goals with a well-thought-out EAC strategy. The company integrates EACs purposefully into ESG strategies and supports the transformation of business models to become climate-friendly.

As an independent consultant, Johannes Fiegenbaum brings extensive market knowledge and regulatory expertise to achieve measurable progress in transitioning to sustainable business models. This includes developing the optimal EAC strategy, integrating it into existing sustainability programs, and ensuring compliance with CSRD and EU taxonomy requirements. In this way, EACs are used not only for compliance, but also as an effective tool for transformation towards net-zero emissions.

Monitoring, Reporting, and Continuous Improvement

Best Practices for Monitoring and Data Management

Systematic monitoring of EAC transactions is essential to meet the requirements of the GHG Protocol and ESRS. With modern software solutions, you can automate and efficiently manage the entire process—from purchase and retirement to reporting. ESRS Compliance: Practical Steps for VSMEs

Accurate and clearly recorded data are key to deriving concrete actions. Where possible, current and specific emissions data should be used. Automated systems also make it easier to allocate data to specific consumption periods and support both location-based and market-based reporting methods.

This thorough data collection forms the basis for transparent communication with stakeholders and effective further development of your strategies. The use of digital tools and blockchain-based registries is increasingly being explored to enhance traceability and trust in EAC markets (IEA, Digitalisation and Energy).

Transparent Reporting to Stakeholders

The CSRD brings expanded reporting obligations for more than 50,000 companies in Europe, including the requirement for external audits. ESG-relevant information must be disclosed in the management report in accordance with ESRS.

For Scope 2 emissions, it is important to apply both the location-based and market-based methods. All energy consumption in Scope 2 should be documented using market instruments such as Guarantees of Origin (GOs) and RECs. It must be ensured that all recorded metrics are validated through a verified process that covers all scopes.

"The growing urgency of climate change means carbon accounting will be with us for the foreseeable future, with demands for disclosure and aggressive emissions reduction only getting louder."

In addition to reporting, it is essential to regularly review strategies and adapt them to new regulatory and market developments. The increasing scrutiny from investors and stakeholders makes transparency and accuracy in reporting more critical than ever (CDP, 2023).

Updating EAC Strategies for Regulatory and Market Changes

Continuous review of EAC strategies is crucial to respond to regulatory requirements and market changes in the long term. The Federal Cartel Office is increasingly relying on software-based market monitoring and plans to expand the use of AI. These developments could increase the complexity of monitoring and enforcing EAC strategies.

It is important to actively monitor legislative changes and assess their impact on business operations. Regular adjustments to strategies ensure they remain aligned with evolving regulations and market conditions.

At the same time, decarbonization targets should be reviewed regularly, and measures such as energy savings or efficiency improvements should be implemented. Since almost 40% of global greenhouse gas emissions are caused by energy generation (IEA, 2023), continuous reassessment of the EAC procurement strategy is essential.

Fiegenbaum Solutions offers companies support in optimizing their EAC strategies. Through data-driven analyses and in-depth knowledge of regulatory requirements, the company helps ensure that EAC programs contribute to achieving net-zero goals in the long term.

Location- and market-based approach for emissions from electricity use

Key Takeaways for Reducing Scope 2 Emissions with EACs

Energy Attribute Certificates (EACs) can reduce Scope 2 emissions—but only if they are used purposefully and transparently.

"EACs remain a powerful tool for reducing scope 2 emissions - but only when used thoughtfully and transparently" – South Pole

The key lies in integrating high-quality certificates into a comprehensive decarbonization strategy. Quality, combination with additional measures, and regulatory developments all play a decisive role.

EAC Quality: More Than Just a Certificate

The impact of EACs depends heavily on their quality. Certificates with additional sustainability benefits, such as EKOEnergy or Green‑e certified EACs, offer significantly more impact than standard certificates. It is important that they come from the same market area and match the actual electricity consumption period. These requirements support Germany's ambitious goals: 80% renewable energy by 2030 and 100% by 2035 (BMUV, 2024).

Combining EACs with Additional Measures

Successful companies do not rely solely on energy attribute certificates but combine them with other climate protection measures. For example, PepsiCo achieved 100% renewable electricity for its production sites in 40 countries in 2023 by combining EACs with long-term solutions (PepsiCo, 2023). Another example: Google is pursuing its 24/7 Carbon-Free Energy approach, aiming to use carbon-free electricity around the clock, and achieved a global CFE score of 64% (Google 24/7 CFE Whitepaper). These examples show that EACs deliver their full benefit, especially as part of a holistic climate strategy.

Regulatory Developments: A Dynamic Environment

Requirements for EACs are continuously increasing. Germany's target of 51.8% renewable electricity and the EU-wide goal of at least 42.5% renewable energy by 2030 increase the pressure on companies to regularly adapt their strategies. Standards such as RE100 and recognized tracking systems help ensure the quality and traceability of certificates and prevent double counting (RE100 24/7 Renewable Electricity).

Future Perspectives: Hourly Matching and Data-Driven Strategies

A look into the future shows that hourly matching of EACs (24/7 CFE) can maximize transparency and impact. Companies like Fiegenbaum Solutions support the optimization of EAC strategies and, through data-driven analyses, ensure that certificates contribute to achieving net-zero goals in the long term.