Why Hourly Matching Misaligns with Market Design

Electricity systems operate within two distinct realities: physical reality and market reality. In physical terms, power grids continuously balance supply and demand in real time. Electrons do not travel directly from a specific producer to a specific consumer but instead oscillate across the interconnected system to maintain frequency and stability.

In market terms, these physical flows are represented through structured mechanisms that ensure reliability, efficiency, and transparency. In Europe, electricity is traded in integrated wholesale markets across several timeframes, including day-ahead and intraday markets where energy is bought and sold before its actual delivery, balancing markets used by system operators to correct real-time deviations, and capacity and ancillary service markets that ensure sufficient resources are available to maintain system security.

Alongside these wholesale markets, book-and-claim energy attribute certificate systems, such as the European Energy Certificate System (EECS), track how and where electricity is generated, enabling consumers to support renewable generation and make credible claims about their electricity use. These two layers work together in a mutually reinforcing way, even though they have distinct functions. The physical grid ensures that electricity flows safely and reliably at every moment, while the market layer supplies the pricing signals, investment incentives, and tracking systems that support long-term efficiency, transparency, and the expansion of renewable energy.

Mandating hourly matching conflates these realities, turning the GHGP into a grid operations standard rather than an accounting framework. It introduces artificial scarcity of "compliance hours" without improving actual emissions integrity.

Hourly EACs would duplicate the time and location price signals already embedded in power markets, while fragmenting liquidity in the EAC market itself. This overlap risks confusing market participants, increasing transaction costs, and discouraging participation in renewable certificate trading. Over time, such fragmentation could reduce the voluntary demand for renewable energy certificates, weakening one of the most effective financing mechanisms for new renewable projects.

Practical and Technical Overcomplication Without Added Integrity

While the idea of hourly matching may appear to improve temporal accuracy, in practice it introduces major administrative, equity, and market challenges that undermine the efficiency and inclusiveness of corporate decarbonization.

Implementing hourly matching would require companies to track, verify, and reconcile 8,760 hourly certificates per facility per year, often across multiple sites, suppliers, and grid regions. The process is highly complex, data-intensive, and costly, demanding new digital systems, integrations, and verification protocols. Instead of focusing on emissions reduction and renewable investment, companies would be forced to divert significant resources toward record-keeping. In short, the system risks prioritizing accounting precision over climate impact.

Only a handful of large corporations, such as global tech or data center operators, have the technical and financial capacity to manage this level of complexity. For small and medium-sized enterprises (SMEs), the administrative and financial burden would be prohibitive. A mandatory hourly system is exclusionary by design and would create an uneven playing field, concentrating participation among the largest energy buyers and undermining the open access nature that has made voluntary renewable procurement so successful.

Strengthen What Already Works: Standard EAC Systems

Standard EAC markets already demonstrate a strong and proven track record of delivering real climate impact. They channel billions in revenue to renewable energy generators, creating stable and predictable income streams that support both the operation of existing projects and the development of new ones. By enabling consumers to choose and financially back clean electricity, these systems drive measurable additionality.

Beyond their environmental benefits, EAC markets are designed for scale and accessibility. They function seamlessly across borders, integrate with a wide range of energy systems, and remain accessible to companies of all sizes, which is why they have become one of the most powerful global tools for driving the energy transition. Tools such as strict annual matching and full consumption disclosure further enhance credibility and transparency while building on what already works, without disrupting market liquidity or participation. Strengthening and expanding this well-functioning foundation is a pragmatic, equitable, and high-impact pathway for continued decarbonization.