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Allocation (of a certificate)
Allocation is the process of assigning certificates from your inventory to fulfill specific delivery obligations, based on each obligation’s contractual or regulatory criteria.
What criteria drive allocation?
Allocation is guided by the requirements of each delivery obligation. These typically include certificate type (GoO, REC, I-REC, etc.), generation technology (wind, solar, hydro, biomass), country or region of origin, vintage, generator commissioning date or capacity limits, and any scheme-specific criteria. Requirements can differ a lot between obligations, even within the same portfolio, so only some certificates in inventory will be eligible for each one.
Who sets the allocation criteria?
The criteria come from the obligation itself. A counterparty sales contract specifies what must be delivered, for example '1,000 MWh of Dutch wind GoOs from vintage 2025'. A compliance scheme such as the UK Fuel Mix Disclosure sets its own rules, and a voluntary framework like RE100 can add further requirements.
What happens when a certificate fits several obligations?
A single certificate is often eligible for more than one obligation. The portfolio manager then has to decide where it creates the most value, weighing the price of each obligation, its deadline, and whether other certificates are available for the remaining obligations. Certificates with premium attributes, such as a specific technology, vintage or country of origin, can command higher prices. Using them for an obligation that would have accepted a more generic certificate leaves that premium on the table.
How is allocation done in practice?
In many companies, allocation is still manual: operations teams pick certificates from spreadsheet inventories one obligation at a time as deliveries come due. Platforms like CerQlar can automate this by matching certificates to obligations based on contract criteria, and some also allocate expected incoming certificates to future obligations.
How is allocation different from attribution?
Allocation is a forward-looking decision about which certificates in the inventory will be used to fulfill each delivery obligation. Once allocation is done, the transfer or cancellation can be executed in the registry. Attribution looks at transactions that have already happened, linking the certificates in them to the right trades in the company’s trade book.
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Allocation (of a certificate)
