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The Biomethane Certification Scheme (BMCS) is an independent certification scheme (“ICS”) run by Green Gas Trading Limited, a private limited company.

Scope

Green Gas Trading’s (GGT) scheme certifies grid injected biomethane, but also gas which is liquefied or compressed for use as a transport fuel.

Our Aims

Our goal is to maximise the value and the liquidity of biomethane by enabling biomethane producers and consumers to transact in the “green” value of the biomethane at a market determined price, with the certainty that the certificate that they are trading evidences a unique unit of biomethane.

Compatibility with European Scheme

The BMCS has been designed to be compliant with the European Energy Certification Scheme (“EECS”) standard, which is administered by the Association of Issuing Bodies (“AIB”). The certificates also align to the requirements outlined in Article 19 (7) of the recast  Renewable Energy Directive 2018/2001/EU. The BMCS certifies all the data that is required for this standard and its registry is provided by the largest provider of EECS certificates in Europe, Grexel.

Philosophy

GGT’s core belief and reason for setting the scheme was set up is that the producer of the biomethane should be the beneficiary of any incremental “green” value for their ultra low carbon product. GGT also believes that the biomethane producer should not be put in the position that they become a price taker when monetising the value of their gas; divorcing the commodity product (methane) from the Biomethane Certificate allows the producer to be a price setter rather than taker.

The scheme also seeks to provide an easy to use platform with low fees for all members who can become owners of the scheme by investing in shares.

What is it?

The Biomethane Certification Scheme (BMCS) is an independent certification scheme (“ICS”) run by Green Gas Trading Limited, a private limited company. Green Gas Trading was set up to provide both a credible process for certifying biomethane and a trading platform to facilitate the trading of certificates.

The biomethane certificates issued under the scheme can be traded separately from the physical commodity gas. This allows the certificate owner to transact the physical commodity at the market price for that product whilst seeking the highest economic value for the Biomethane Certificate (“BMC”). Trading the gas and the certificates separately makes it possible to maximise the value of this exceedingly low carbon, green gas at a market determined price.

Why was it set up?

The BMCS provides the biomethane industry with a means of certifying and trading the “green” or “bio” value of biomethane. The commodity gas (methane) is relatively easy to price as there is a deep and liquid market price for the commodity. However biomethane has additional value by virtue of being produced from energy sources that do not involve the release of fossil carbon into the atmosphere. The fact that biomethane is produced from environmentally occurring carbon i.e. carbon already in the environment, means that it is an intrinsically ultra low carbon fuel – very little “new” (i.e. fossil) carbon is released in its production process. This is important, as much of the economic value of Biomethane Certificates (BMCs) is as a direct result of the carbon saving that is achieved by using biomethane rather than fossil gas.

Uniquely, BMCs can be traded separately from the physical commodity gas. This allows the certificate owner to transact the physical commodity at the market price for that product whilst seeking the highest economic value for their BMCs.

How to Join

Producers: Contact us for the ‘Producer Form‘.

Suppliers, Traders & End-Consumers: Contact us for the ‘ Trader Form‘.

  1. Once you have completed and returned the relevant form we will register your company or plant on the registry.
  2. Arrange a short phone call to explain the steps of accessing the platform.
  3. Once you have access to the platform GGT will organise a screen share or visit to show you how to use your account, transfer or cancel certificates and generate reports.

To request more information on how to sign up please contact us.

Joining Fees

The BMCS has been designed to keep the costs of certification to a bare minimum; the model being that the exchange will seek to take a commission from the re-trading of the BMC rather than taking a large up-front certification fee. The scheme has stuck by its initial promise and has the lowest lifecycle certification charges in the UK for biomethane. So, we have reflected this in our lifecycle fees that 15% lower than our not-for-profit competitors.

Members can either pay an annual membership or buy a dividend paying share in the company. The share model is similar to most commodity exchanges (CME etc.); this share acts as the “exchange seat” and allows producers to access the registry, be allocated BMCs to their account and to offer the BMCs for sale on the platform or bi-laterally.

  • Membership: £500 per annum, which is invoiced pro rata to the 1st June.
  • Shares: All members including producers can purchase shares in the company that can be paid for in one installment of £7,500 or 15 annual payments of £500. For more information on the type of share you could be applicable for please contact us.

Scheme Fees

  • Certificate Issuance Fee: £0.04 per MWh
  • Certificate Transfer Fee: No charge
  • Certificate Retirement/Cancellation Fee: £0.04 per MWh

More information on the economic benefits to producers of joining the Biomethane Certification Scheme and the structure of GGT is available on request. The fees charged by Green Gas Trading are reviewed annually. The costs we charge cover the costs for administering the BMCS, the registries hosting platform along with ensuring your enquiries are answered and reports generated.

EAC, GoO, Certs, RGGO or BMC?

Biomethane Certificates (BMC) are issued to biomethane producers who inject gas into the natural gas grid or liquefy or compress it as a transport fuel. The BMC provides the biomethane industry with a means of certifying and trading the “green” or “bio” value of biomethane.

The BMC is an EAC (Energy Attribute Certificate) that has multiple names or forms including: Certificate, Certs, Biomethane certificate (BMCs), RGGO, Green Gas Certificates, GoO and Gas Guarantees of Origin.

So, a BMC is a guarantee of origin certificate for biomethane. The recast Renewable Energy Directive 2018/2001/EU Article 2’s (12) definition of a ‘guarantee of origin’ means an electronic document which has the sole function of providing evidence to a final customer that a given share or quantity of energy was produced from renewable sources.

The certificates are denominated in MWh certificates, which are calculated from the gas flowed, net of any CV enhancement. MWh denominations is the same basis as energy companies are required to bill their consumers. The information on the certificate also aligns to the requirements outlined in Article 19 (7) in the recast Renewable Energy Directive 2018/2001/EU. This ensures BMCs are a reliable, audited way to ensure that the green gas you have purchased is genuine and that there has been no double counting. This provides certainty to gas users and ensures that gas consumers that wish to use their BMCs to evidence biomethane purchases in statutory compliance schemes may do so, knowing that there is a full audit trail for their certificate.

Each BMC contains information in code and text form about the energy that is certified on the certificate, about its origin, where and when it was produced, by who and data relating to its sustainability. Examples can be found below.

What does a BMC look like?

A certificate is created at each point in the process of the certificates lifecycle.

Issuance certificates‘ are automatically created by Grexel. They can be downloaded from the registry via your account or requested from Green Gas Trading.

Transfer certificates‘ are automatically created by Grexel for each and every transfer. They can be downloaded from the registry via your account or requested from Green Gas Trading.

Cancellation certificates‘ are automatically created by Grexel. They can be downloaded from the registry via your account or requested from Green Gas Trading. An ‘office friendly‘ version of the certificates can also be generated on request.

When Green Gas Trading conducts an issuance, transfer or cancellation transaction on behalf a scheme member it will send a confirmation of the certificate via email. If the transaction is charged then the certificate will also be attached to the invoice.

To All

Green Gas Trading, through the BMCS, offers a range of benefits to all involved in the industry. A few of the benefits offered to BMCS members are:

    • It has the lowest lifecycle certification costs of any UK registry
    • Lowest cancellation (retirement or end user) costs of the UK registries at £0.04/MWh
    • 15 years of membership payments then free access to the platform (can be paid upfront)
    • Options to buy shares instead of membership
    • 99 year certificate lifetime – currently under review due to Article 19 (3 & 4) in the recast Renewable Energy Directive 2018/2001/EU
    • Networking of producer, trader and consumer members
    • Quarterly update and report, which can be done for producer portfolios or companies on request
    • Training and support on the Grexel platform
    • Feed-in to government and regulator consultations through Green Gas Trading’s membership to the Anaerobic Digestion and Bioresources Associations

To Biomethane Producers

Biomethane certificates allow the biomethane producer to divorce the “green” value of their product from the more easily priced commodity gas (methane) price. The commodity gas is relatively easy to price as there is a deep and liquid market price for the commodity. However biomethane has additional value by virtue of being produced from energy sources that do not involve the release of fossil carbon into the atmosphere. The fact that biomethane is produced from environmentally occurring carbon i.e. carbon already in the environment, means that it is intrinsically an ultra low carbon fuel – very little “new” (i.e. fossil) carbon is released in its production process. This is important, as much of the economic value of Biomethane Certificates (BMCs) is as a direct result of the carbon saving that is achieved by using biomethane rather than fossil gas.

Uniquely, BMCs can be traded separately from the physical commodity gas. This allows the certificate owner to transact the physical commodity at the market price for that product whilst seeking the highest economic value for their BMCs.

In practice the buyer of the physical commodity gas may not be the best buyer of the “bio” or “green” rights which the BMC represents; the fact that the BMC allow for two separate transactions, one in the physical gas and one in the green rights, means that the biomethane producer should have the ability to identify and transact the different elements with the most suitable buyer.

To Biomethane Buyers

To decarbonise grid gas supply
The BMC allows a “brown”, fossil gas buyer to decarbonise their gas supply without having to buy a specific green tariff. The BMC has been designed to be a European Energy Certification Scheme (EECS) compliant certificate, which allows the buyer to evidence their “green gas” purchases, without the need to change any contractual arrangements as regards their existing gas supplier.

To decarbonise transport fleets
Biomethane as a transport fuel in heavy transport fleets is arguably the best use of the product. Its low output of airborne pollutants relative to diesel makes it increasingly likely that Government will use environmental policy to favour biomethane as a transport fuel in the coming years. This is in addition to the simple economics of the likely continuing divergence in the price of oil and gas in the coming years. The UK Government is very focussed on its carbon reduction commitments and it is very likely that the fuel duties imposed upon CNG and LNG will remain favourable for an extended period of time.

The ability for transport operators to use BMCs is a key driver of their price. The ability of operators to buy BMCs and to use them to offset their carbon footprint presents the operator with the ability to retain their existing grid gas supply contracts and use BMCs to decarbonise.

The fact that many biomethane producers sell their production directly to transport operators at local sites, without going via the gas grid is the key driver as to why the BMCS also certifies biomethane that is compressed or liquefied as a transport fuel. Biomethane suppliers already are disadvantaged by the relatively low level of subsidy provided by the RTFO relative to the RHI; the aim of including CNG and LNG in the scheme seeks to redress this, at least in part.

BMCs and CSR compliance
The growing requirement for Corporate and Social Responsibility (“CSR”) criteria in UK business is an important use of BMCs.

Fundamentally, the creation of a multi-source, homologous certificate which divorces the certificate from the physical gas supply allows a deep and liquid market to develop, which gives a security of supply to the CSR buyer which an individual bi-lateral purchase agreement with a biomethane plant will never allow.

To the UK

The creation of a private sector, market determined price for biomethane certificates is a key contributor to the overall economics of biomethane production. Given the likely digression over time of the support that will be available via the RHI for new AD plants, it is vital, if the UK is to meet its renewable energy targets production, that all sources of revenue are maximised.

Creating a liquid market for BMCs allows an open and transparent price to develop for the “green” element of biomethane. The market price of fossil natural gas is easy to value as it is a highly traded liquid product – it is the combination of a liquid market for both the bio element and the methane element of biomethane that ensures that this premium product is properly valued by the market.

The fact that BMCs are tradable separately to the physical methane is key to price transparency developing. Private, bi-lateral off-take agreements for biomethane as a “bundled” product of certificate AND physical gas, do nothing to aid price discovery. The fact that BMCs can be traded on an exchange in 1MWh certificates is fundamental to raising awareness of biomethane and ensuring the development of a broad and transparent market in biomethane.

The nascent market for biomethane will only develop if potential buyers understand that as a product, it is available, cheap to transact, and properly audited. The advantage to the UK of having a well developed pricing mechanism for biomethane is the longer term ideal to transfer (in part) the need for public subsidy for the industry to the private sector. Willing buyers exist for the product if it were more widely available; liquidity and access are the keys to unlocking this demand.

What is the price of Certificates?

Green Gas Trading circulates Cornwall Insight’s quarterly survey to all members of the BMCS. The quarterly green certificate market survey is designed to provide greater market transparency for the Renewable Energy Guarantees of Origin (REGO), Guarantees of Origin (GoOs) and Renewable Gas Guarantees of Origin (RGGO) certificate markets. The survey results provide aggregated views on certificate pricing levels, demand and supply trends and sentiment on the future market trajectory.

The figure provides a snapshot of the high-level results of the quarterly green certificate market surveys to-date. For further information on the value of certificates please contact Cornwall Insight.

Who are Cornwall Insight?

Cornwall Insight are a pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders in the Great British, Irish and Australian energy markets. They are regarded as a market leader in a wide range of businesses and were recently awarded the 2020 FT Management Consultancy Award in the energy, utilities and environment sector, for the second year running.

As well as the quarterly market report Cornwall Insights work includes:

  • Consultancy: Bespoke research and advisory service that gives deep insight and analysis to help businesses understand the energy market, policies and develop business strategies.
  • Training: Provision of Energy Institute-accredited courses designed to boost the knowledge and skills of attendees.
  • Market Intelligence Reports: Covering the full breadth of the UK and Ireland energy industry.
  • Publications: Weekly and monthly publications keep pace with the fast-moving complex and multi-faceted market.

How do BMCs get issued?

Biomethane producers sign up to the scheme to receive the certification of their gas production that enters the grid or is liquefied or compressed as a transport fuel. This production is on the same basis as the RHI in that it is based upon the gas flowed, net of any Calorific Value (“CV”) enhancement of propane which is required (if applicable) in order to bring the CV of the biomethane up to the applicable grid minimum. Thus the energy value on a Biomethane Certificate is 100% “green”.

Once the producer has produced, injected and submitted the periodic data on gas which is eligible to be certified through their production supports portal the following steps should be taken:

  1. Ensure GGT has view-only access to your submission portal or another data sharing agreement
  2. Notify GGT of your periodic submission, feedstocks amounts and sustainability and what account the certificates should be transferred into
  3. GGT will confirm and issue certificates, meter readings and feedstock codes to the production account
  4. GGT will transfer certificates on your behalf should you provide details at the start of the process

The BMCS has been designed to be compliant with the standards and rules of the European Energy Certification Scheme (“EECS”), thus the certificates are denominated in their energy value rather than as a volume of gas. This, in conjunction with a registry which is fully integrated with the other European energy registries, means that as Biomethane Certification standards solidify in Europe, the BMCS should be deliverable and interoperable with other European biomethane schemes.

How to buy certificates?

BMCs may have several sources, all of which relate back to Green Gas Trading Limited and the Registry, which is the issuing body. As a gas consumer you may be sent an end user certificate by your energy supplier as evidence of your green energy use as a part of a green gas tariff you have purchased from them. This energy supplier may have purchased them directly from a biomethane producer or via an exchange.

A commercial user of BMCs can join the exchange themselves, which allows them to trade directly in the exchange and have access to the trading platform. This would allow them to buy BMCs for their own use or to act as an intermediary in order to buy and on-sell these certificates to their customers. This is the route by which most of the energy companies will acquire BMCs for on sale to consumers. So, how else can you purchase certificates:

  • Using the tendering platform on the website.
  • Contractual agreements with traders or producers of BMCs.
  • GGT can also introduce producers, traders, and consumers of certificates but does not become involved in pricing of the certificates.

How to use certificates?

In order for a gas user to use their certificate for compliance or reporting, it needs to be cancelled, retired or “notified” to the exchange. When this is done Green Gas Trading will issue an End User Certificate to the beneficial owner of the certificate. This End User Certificate can be issued in electronic or paper form (or both) and evidences that the energy on the certificate has been cancelled as used. The Registry entry for that certificate is blocked and that particular BMC as evidenced by its specific identifier may never be re-used.

An example of the End User Certificates can be provided on request. More information can also be found on the ‘End User’ section.

How does cancellation work?

When a gas consumer buys a biomethane certificate to decarbonise their gas supply the BMC needs to be cancelled to ensure it can be claimed against their consumption.

Members on the scheme can carry out cancellations or instruct GGT to if they are not confident to do so. To cancel a certificate the following steps are taken:

  1. Select the certificate (bundles) in your account you wish to cancel
  2. Enter the: volume, country of consumption, name, type and location of beneficiary, consumption period, usage category and cancellation purpose
  3. Submit the above information and you can then save a PDF version of the certificate
  4. Once cancelled the certificates cannot be traded again but a record of them will be kept in your account should you require them for reporting purposes
  5. You will be invoiced by GGT for the cancellation fee with a copy of the End User Certificate attached.

How do I verify my certificate as genuine?

You can check the validity of your certificate at by contacting us and putting the certificate ‘Transaction Number’ or ‘Certificate Number’ in the message.

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