Settlement (of a certificate)

What does EAC settlement involve?

Settlement of an EAC usually involves three main steps: 1. Identifying which certificates from inventory match the obligation's criteria (vintage, technology, country, contractual specifics) 2. Transferring or cancelling those certificates in the relevant registry 3. Providing the counterparty or compliance regulator with evidence of completion, typically a cancellation statement.

How is EAC settlement different from financial settlement?

Financial settlement is the cash payment side of a trade, the point at which money moves between counterparties. EAC settlement is the certificate side, the point at which certificates move or are cancelled in a registry. The two are independent: a trade can be financially settled but operationally outstanding for weeks if certificates have not yet been issued or transferred.

How is settlement different from cancellation?

Settlement is the broader operational process of fulfilling a delivery obligation, which may include cancellation as one step but also involves identifying the right certificates, transferring them where needed, and confirming delivery. Cancellation is the specific registry action of permanently removing a certificate from circulation. Many obligations are settled through cancellation, where the buyer wants to make the renewable claim; some are settled through transfer, where the buyer is taking the certificates for onward sale.

How do companies handle EAC settlement?

Settlement is typically owned by operations or middle office teams. When an obligation comes due, the team identifies which certificates from inventory match the obligation's criteria, executes the necessary registry actions (transfer or cancellation) in each registry where certificates sit, and produces evidence of completion such as a cancellation statement. In organizations without dedicated EAC platforms, this is done manually across multiple registry portals and spreadsheets, with one workflow per registry.