The Energy Attribute Certificate (EAC) market stands out among comparable industries due to the increasing environmental consciousness in today’s society. This factor has led to remarkable expansion, surpassing the typical growth expectations for an industry in its early stages. The EAC market is highly dynamic, with its growth trajectory greatly influenced by shifts in environmental awareness, social, and political factors. Although the shifts in the EAC market are largely positive, with exponential growth, they also bring new challenges. As the EAC and Guarantee of Origin (GO) markets continue to grow, stakeholders such as CFOs and Chief Risk Officers are calling for more transparent reporting and effective portfolio management solutions.
Market growth creates new opportunities and new challenges
The GO market has experienced remarkable growth in recent years, and prices have skyrocketed. To meet new climate goals set by the EU, such as cutting greenhouse gas use by 55% by 2030, certificate volumes must increase 20-25% annually until 2030, ensuring the market’s growth remains steady. In 2022, the GO market was valued at around €6 billion and, with a predicted annual growth rate of 10%, is expected to reach over €130 billion by 2030.
While the market was still developing, general tools such as spreadsheets, macros, and ETRMs were sufficient. However, as the market grows and trades become more complex, these systems have become limited and unsustainable. A long-term solution is necessary to keep pace with current and future market growth.
As prices have significantly risen, stakeholders are demanding sustainable transparency solutions designed to specifically manage EAC market pain points. As a GO portfolio manager, you work closely with your risk manager to align your GO holdings with corporate risk requirements and company policies. But most data storage and management actions are performed manually, making the process time-consuming and vulnerable to human error. This can make it challenging and almost impossible for you to access the accurate data you need, in real-time.
Navigating the EAC market with a single source of truth
To effectively manage a volatile GO market, it’s crucial to have your business prepared. For transparent and advanced risk analytics, standardized data is essential. As large and complex trades become more common, it’s increasingly important to have real-time access to the big picture of your GO portfolio and the ability to instantly view individual certificates. A single source of truth (SSoT) ensures everyone in the organization has access to the single reliable source of data they need to make data-driven decisions.
Having an SSoT eliminates debates over data accuracy and provides an easily-accessible view of your positions, making it simple to share critical insights with key stakeholders, whether they are GO experts or not. CerQlar provides that single source of truth by gathering all your portfolio data from various registries and other sources and presenting it in a single, navigable interface. Other features such as position view and certificate filtering help streamline the entire post-trade lifecycle, making it easier to navigate the quickly growing market.
