The Evolving GO Market and Its Bright Future

On September 12th, Landsvirkjun, in partnership with RECS Energy Certificate Association hosted a national Guarantees of Origins (GO) day, titled GO Conference. The event was a resounding success, attracting over 150 attendees from across Europe, including power producers, power consumers, regulators, GO brokers, and news outlets on energy markets.

With a spotlight on the evolving GO market and Europe’s changing regulatory landscape, the conference featured expert presentations and an engaging panel discussion with key stakeholders.

The event underscored the growing importance of GOs as the leading tool for reporting Scope 2 emissions. With the EU increasingly integrating GOs into various regulations, these certificates are becoming essential not only for sustainability reporting but also for renewable PPAs, green claims, and RFNBOs.

However, a need for further harmonization across regulations remains critical for the GO market to reach its full potential. While the impact of these regulatory shifts is still unfolding, it is clear that legislative drivers will play a crucial role in boosting demand for GOs.

The GO market is experiencing growing demand, driven by new regulations and the emergence of renewable hydrogen producers. A noticeable shift toward greater market flexibility is underway, with generic trading becoming more prevalent. Despite this, GO prices have remained relatively inelastic. While uncertainties persist—particularly regarding the implementation of various regulations—demand continues to rise.

The optimism about the GO market’s future was clear throughout the event, underscoring the increasing recognition of GOs as a key pillar in Europe’s energy transition.

One of the most notable discussions at the conference was the changing perspective on GOs in Norway. Once considering an exit from the GO system, the Norwegian government has now reversed course, with the Energy Minister recently confirming that Norway will remain a participant. This shift is likely driven by the EU’s pressure for Norway to implement RED II and the Clean Energy Package, solidifying its participation in the GO system. Additionally, the financial implications are significant, with potential billions in revenue through state ownership and tax proceeds from GOs.

A growing number of power-intensive companies in Norway have started to buy GOs for their consumption, leading to an increase in domestic GO usage.

Historically, Norway's developments in the GO market have provided valuable insights into future trends for Iceland, and it is encouraging to see that energy-intensive industries are increasingly adopting GOs to support an energy transition.

A key theme of the event was the critical role of market-based reporting for Scope 2 emissions, particularly for energy-intensive industries. The growing exploration of GOs by these industries as part of their sustainability strategies marks an important step towards achieving climate goals. The conference reinforced the importance of GOs in driving the energy transition and shaping the future of sustainability reporting.

Looking ahead, reporting requirements for Scope 3, or supply chain emissions, are expected to become more stringent. This will compel small and medium-sized enterprises (SMEs) to report their emissions, both from Scope 1 or Scope 2, further integrating GOs into broader sustainability efforts.

One of the most rewarding aspects of the GO Conference was the opportunity to network with industry peers, exchange ideas, and learn from one another. Meeting so many professionals who are equally passionate about advancing the shift towards a sustainable energy future was both inspiring and energizing. These connections are invaluable as we work together to drive progress in the energy sector.

For further insights into the discussions at the conference, I encourage you to listen to Montel’s podcast, Is regulation holding back GO adoption? In the episode, Halldór Kári Sigurðarson, Business Director at Landsvirkjun, along with other experts, delves into the latest developments in the GO market and regulatory landscape.