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What are Ecolabels

What is an ecolabel?

An ecolabel is a voluntary method of certifying environmental performance of a product. In the context of the renewable electricity market, ecolabels are used to further differentiate the quality of renewable electricity by the way of additional criteria. In general, the more stringent the requirement for the ecolabel, the higher the price.

Ecolabels are awarded by an impartial third party, as an independent assessment of the label gives further credibility to the process. The German Technical Inspection Association (TÜV) organisation is an example of an independent verifier of many renewable energy ecolabels.

The International Standards Organisation (ISO) standard 14024 "Environmental labels and declarations - Type I environmental labelling - Principles and procedures" covers the requirements and application of ecolabels.

Ecolabels and GOs

While GO certificates list many attributes for the renewable energy produced with restrictions on what is acceptable, first and foremost GOs are used as a reporting tool. Where an Ecolabel is associated with a GO certificate, the ecolabel places a higher standard on what is acceptable for the renewable electricity produced.

For example, the age of the plant producing renewable energy must be listed on the corresponding GO certificate (start of operation date), but an ecolabel might prefer to invest in new plants, thus place an upper limit on the plant age. An ecolabel might also stipulate requirements for attributes not normally listed on a GO. For example, ecolabels may insist that the producer contributes to environmental funds and/or renewable projects in developing countries.

The Swedish ecolabel Bra Miljöval (Good Environmental Choice) is an example of a scheme whose labelling requirements also meets the minimum standards for a GO, and as a result is often traded in a similar manner. In general however, GOs and ecolabels contain different information.

Usage

Companies will often buy ecolabelled GOs for a discerning customer base. These companies are typically electricity suppliers for households, or energy intensive service industries. For example, Deutsche Bahn (German Railways) purchased more than 1 TWh of ecolabelled GOs in 2018.

In Germany, a recent survey by Hamburg Institute of approximately 1 200 suppliers, showed about three quarters of them offered green electricity products, of which about half of these (500) offer ecolabels.

Examples of ecolabels

Some of the more common ecolabels in use in Europe are discussed below.

EKOeEnergy

EKOenergy is an international ecolabel covering renewable electricity and renewable gas, financing projects that combat energy poverty. It is an initiative of the EKOenergy Network whose secretariat is based in Helsinki, Finland.

TÜV SÜD

TÜV SÜD

TÜV SÜD’s ecolabel certifies electricity produced from renewable resources where generation can be attributed to a clearly identifiable source. It has two standards, EE01 which covers energy suppliers and EE02 covering energy carriers. It also promotes support to eco-friendly funds. Recently, TÜV SÜD ecolabelled GOs have been selling at a 5-10 Eurocent/MWh premium to Nordic Hydro GOs.

Bischoff and Ditze Renewable Plus

Bischoff and Ditze Renewable Plus

The Bischoff and Ditze Renewable Plus ecolabel is offered by the German company Bischoff and Ditze Energy. It aims to ensure funds from the sale of labelled GOs go towards green investments, including new, or expansions of existing renewable plants.

Naturemade

Naturemade

Naturemade is the Swiss quality label for energy from 100% renewable sources with two levels – star and basic. Basic is awarded for electricity and heat from waste incineration, while the star standard covers, amongst others, generation from hydroelectric, solar PV, wind turbine and biogas plants. Late 2019, Naturemade Star labelled GOs fetched a premium of around 10 CHF/MWh over Nordic Hydro.

OK POWER

OK POWER

OK POWER is a German ecolabel promoting generation from new, renewable energy plant. It also excludes providers associated with fossil fuel and nuclear generation. Recently, the OK Power ecolabel has been trading at 0.30 and 0.60 Euro/MWh for 2019 and 2020 renewable electricity production.

TÜV Nord

TUV NORD

TÜV Nord is a German ecolabel promoting energy from new power plants, ensuring certified plants do not receive support payments, that energy is derived from new or upgraded plants, and/or investments are made into new renewable plant.

For more information about specific ecolabels, check our glossary (https://www.greenfact.com/glossary). The German GO Market outlook is available from our report store, and gives further information on ecolabels specific to the German market.

If you wish to find out more, please get in contact with us.

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