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Double-selling of certificates
Double-selling is the inadvertent or intentional sale of the same EAC to more than one buyer, resulting in the same MWh of renewable generation being claimed by multiple parties.
How does double-selling happen?
Double-selling typically results from operational error rather than fraud. The most common causes are: - a company sells the same certificates from a stale inventory view that has not been reconciled with the registry - a trader books a sale without realizing the certificates have already been allocated to another obligation - attribution rules are applied loosely so that certificates eligible for multiple obligations get attributed to more than one buyer.
What are the consequences of double-selling?
The consequences are both contractual and reputational. The first buyer who took good title to the certificates retains them, meaning subsequent 'buyers' of the same certificates have no valid claim and the seller is in breach of contract with them. Financial penalties under the breached contracts are typically significant, and reputational damage with counterparties can permanently affect future trading relationships.
How is double-selling prevented?
Prevention requires real-time, accurate inventory and position data, paired with strict allocation discipline. Best practice is to mark certificates as committed at the point of allocation (not at the point of cancellation), to maintain a single source of truth for what certificates are available, and to reconcile internal records continuously with the registry. Spreadsheet-based inventory systems carry a high risk of double-selling errors.
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Double-selling of certificates
