The below information is relevant to RGGOs issued for biomethane within the GGCS. For more information about RGGOs issued for biopropane or RGGOs issued to GreenPower Renewable Gas Scheme participants please contact us.

What is a RGGO?

Renewable Gas Guarantees of Origin (RGGOs) are the name given by the GGCS to the certificates we issue. One RGGO is issued for each kWh of green gas produced and they capture information about the environmental attributes of that gas, allowing that information and value to be passed along a chain of custody from a gas producer to a gas consumer.

When a gas consumer is allocated a RGGO, they are matching the gas that they have withdrawn from a Distribution Network to a unit of green gas that was produced and placed into the same network. The RGGO will be cancelled and shown on a Cancellation Statement (see below). The RGGO will then be unavailable to any other gas consumer.

RGGOs do not track the physical flow of green gas. However, gas consumers who are allocated RGGOs can make a claim to have consumed green gas (see below for more information on the relationship between RGGOs and physical gas flows).

Although they include much of the same information, RGGOs are not considered a Guarantee of Origin (GoO) according to the framework of the European Union’s Renewable Energy Directive because:

• the UK is not a member of the European Union;
• there is no mutual recognition agreement on GoOs between the UK and the EU, and;
• the format of a RGGO does not exactly follow the 16325 standard for GoO referenced by the Renewable Energy Directive.

For more information about how the GGCS relates to the EU’s system for GoOs please contact us.

RGGOs issued for UK biomethane have a status within UK government policy, as a recognised instrument within the Green Gas Levy.

Please refer to our emissions reporting page for more information on use of RGGOs within other frameworks e.g. GHGP, SBTi, or SECR.

What information is included in a RGGO?

The data points included in RGGOs have changed over time as the system has developed and some fields are optional for gas producers to include at the point of issuing. Therefore not all RGGOs include exactly the same information.

More details are provided below and traders and consumers should check with sellers of RGGOs which data points will be included in any RGGOs they purchase.

All RGGOs include the following information:

Note that NDRHI and GGSS are both a type of Production Support and also contain a set of Sustainability Criteria. In order to claim the production support you must prove to the administrator (Ofgem) that you have met the criteria.

Potential Further information within a RGGO

From August 2024 we will be issuing biomethane RGGOs within the G-REX Registration Database which has improved functionality and allows for more information to be included in a RGGO. These data points include:

Net vs Gross measurement of Green Gas production

The Net (or Nett) measurement method means that you calculate the number of RGGOs to issue by subtracting any kWh of fossil based energy (gas or power) used in the production process from the kWh of green gas produced. For example, a biomethane plant may use natural gas (a fossil gas) to provide heat to its biogas-to-biomethane upgrading process. This is the method used in the UK to calculate payments under the Non-Domestic Renewable Heat Incentive (NDRHI) and Green Gas Support Scheme (GGSS) and is used by the GGCS to issue our RGGOs to producers registered with those subsidy schemes.

The Gross measurement method means that you issue RGGOs according to the total number of kWh of green gas produced without any subtraction for fossil based energy (gas or power) used in the production process. Although fossil based energy e.g. natural gas, use will be factored into any calculation of the greenhouse gas emissions arising from the production of the green gas. This method is used by Energinet in Denmark, DENA in Germany, and AGCS in Austria.

Production Support

Production Support is a financial incentive given to a producer by a national government at the point they inject their biomethane. In the UK Production Support is provided through the NDRHI or the GGSS.

This type of support is sometimes referred to as a “feed-in-tariff”, as it is provided at the point energy is “fed-in” to a network.

It is essential that consumers are given clear information on whether the RGGOs they have purchased are for gas that has been supported financially by a national government. Where the core incentive to produce the biomethane was Production Support, then claims that a purchase of RGGOs has led to any additional biomethane production, above the amount incentivised by government support, should be carefully considered – see here for more information.

GGCS RGGOs include a label of “Production Support – Yes/No”, “Yes – NDRHI”, “Yes – GGSS”, or “Yes – Unspecified”, which is visible to Producers and Traders when they transfer RGGOs within the Registration Database and to Consumers via the Cancellation Statements they are provided.

There may be times where producers receive Production Support for only part of their production over a given period, for example:

1. When a producer chooses to claim NDRHI/GGSS for less than 100% of their production, making the unsupported kWh available to be sold for use in the transport market and RTFC claims.
   
   
2. When a producer exceeds their agreed production capacity under the NDRHI or GGSS, in which case kWh produced up until a certain volume will receive Production Support, but kWh produced over that volume will not.
   
   
3. When more than 50% of a producer’s annual production comes from crop inputs, they may be affected by a “crop cap” on their NDRHI and GGSS payments. Note that in the terminology of the GGCS, the NDRHI and the GGSS, crops are referred to as “Product/Co-Product”.

The Production Support status for each kWh in examples 1 and 2 above is clear at the point that RGGOs are issued. However, under example 3, the “crop cap” scenario, the status of the Production Support payment is more complex.

At the point producers make a Production Declaration to the GGCS for gas injections for the fourth quarter of their compliance year, they must supply an Annual Feedstock Declaration to the GGCS so we can calculate the number of kWh (if any) for which they will be repaying their production support (NDRHI or GGSS payment).

If they are due to repay any of their Production Support, they will need to label the appropriate number of RGGOs for their quarter 4 gas injection as “No Support”. Those RGGOs will not be issued until evidence of a reconciliation payment is submitted to the GGCS.

As it is the kWh from product that are subject to the crop cap, then it is the RGGOs with the biomass information label “GGCS – Biomass (Unspecified) Classification (Product)” that must be labelled as “No Support”.

GGCS is aware that there are regular delays with reconciliation payments being administered by Ofgem. If a producer would like to be issued with all eligible RGGOs at the soonest opportunity, they can label all their RGGOs as “Production Support – NDRHI or GGSS”. This information will be correct at the time of issuing as payment will have been made by Ofgem at that stage (or will be due to be made). The producer will not be able to change those labels at a later date (when a reconciliation payment is made) however GGCS does not believe that the producer, trader, or end-use consumer using those RGGOs will gain any undue value from this anomaly.

The GGCS will continuously review this policy and monitor the frequency with which Production Support labels are changed.

Contractual terms between producers, traders and consumers are outside the scope of the GGCS; however, we recommend that all parties account for the status of the Production Support label and any potential changes to that label within the terms they agree.

Is a Renewable Transport Fuel Certificate (RTFC) Production Support?

RTFCs have a market value determined by the need of certain fuel suppliers to fulfil the requirements of the Renewable Transport Fuels Obligation (RTFO). Producers are unlikely to be awarded an RTFC and sell it, but the payments made to them by counterparties for the delivery of biomethane that has not been awarded NDRHI or GGSS payments, are enabled by the value derived from RTFC sales.

As these payments are not directly from a national government, or de facto government body, to a producer for the injection of units of renewable gas, they are not considered to be “Production Support”. However, biomethane production that is sold to counterparties for RTFC claims is likely being driven by the RTFC value and not the RGGO value and any additionality claims should be made in that context.

For further information on the topic of additionality see here.

RGGOs, the physical green gas, and the wholesale gas market

When a gas consumer buys a RGGO (or its equivalent in another country) they are matching the gas that they have withdrawn from a Distribution Network (a network) to a unit of green gas that was produced and placed into the same network.

Aside from the units of biopropane that GGCS track within the network of bottles and tankers operated by Calor Gas Ltd and Flogas Britian Ltd, the network that RGGOs relate to is the system of pipeline gas transportation in the UK (the GDNs, NTS and IGTs), and the pipeline network this is connected to in Europe. The type of green gas they represent is biomethane.

While RGGOs must link producers and consumers of gas that are part of the same network, they do not represent the physical movement of a green gas from injection point to withdrawal point. This is because once a green gas is injected into a network, it mixes with all the other gas within the network, and it is impossible to track the actual molecules as they move within the pipes according to local conditions of supply and demand.

Neither do RGGOs relate to units of gas traded on the wholesale market. The wholesale market (the National Balancing Point in the UK) is for trading units of gas within the GDN, NTS or IGTs (the grid) and makes no distinction to whether the gas was from a fossil or renewable source or what its green credentials are e.g. GHG emissions arising from its production and combustion. The structure and rules of the wholesale market are complex and National Grid (now called National Gas), who are the System Operator, provide an explanation here.

According to the conventions of greenhouse gas reporting and consumer disclosure for green tariffs, it is the RGGOs which represent the environmental attributes of the biomethane, and a wholesale gas contract has no standing with regards to whether gas can be sold as “green”.

RGGOs are traded separately from wholesale gas and almost all claims of green gas use are made on the basis of generic gas supplied from the wholesale market, matched to RGGOs which link the customer back to green gas production and injection.

However, in some cases, gas shippers and gas suppliers may coordinate their RGGO and wholesale gas activity if they see value in doing so.

For example:

Biomethane Producer A injects biomethane into the grid. It transfers the RGGOs it has been issued to its Gas Shipper, who is also responsible for arranging entry for the physical units of gas into the National Balancing Point (NBP) market in the UK.

The Gas Shipper then has ownership of both the wholesale gas on the NBP and the RGGOs and it sells both to a Gas Supplier serving the Small to Medium sized Enterprise (SME) market.

The Gas Supplier then retires the RGGOs, allocating them to one of its SME customers and this is matched, within their internal systems, to the wholesale gas on the NBP they have purchased from the Gas Shipper that represents gas injected by Biomethane Producer A.

The actual molecules of biomethane have mixed with the other gas in the network, but both the RGGOs and the NBP contracts show a chain of custody between the biomethane producer and a gas consumer.

What kind of green gas does a RGGO represent?

GGCS can issue RGGOs for any type of green gas which meets our Scheme Rules.

To date the Scheme has issued almost all its RGGOs for biomethane injected into the UK Gas Distribution Network.

As further types of green gas such as bio-SNG (Synthetic Natural Gas) and green hydrogen begin to enter the market we will update our Registration Database and create guidance for how RGGOs related to these gases can be issued, traded, and cancelled.

GGCS also issues RGGOs for biopropane entering into LPG Distribution Networks composed of of bottles and tankers. These RGGOs are transferred and retired in a distinct area of the GGCS Registration Database and must be allocated to LPG customers and not those consuming methane from the gas grid. It is clearly shown in the relevant Cancellation Statements when RGGOs are for biopropane and not biomethane.

We currently issue RGGOs for biopropane that enters the Distribution Networks of Calor Gas Ltd and Flogas Britain Ltd.

For further information, please visit Calor’s website here or Flogas’s website here.