Bio Peleti Energija, a Croatian producer of wood pellets, completed, in partnership with Ecohz, the first-ever transaction in which the environmental attributes of this type of biomass were sold separately from the physical commodity. The sale not only increased the profitability of Bio Peleti Energija’s product based on its environmental credentials, but also pioneered a market based on the core principles that govern Energy Attribute Certificates (EACs), such as Guarantees of Origin (GOs).
Wood pellets are used as a high-density biomass fuel for heat and electricity generation. The raw material for Bio Peleti Energija’s product is sourced from sustainably managed forests, in line with the EU’s Renewable Energy Directive (RED II), within approximately 30 km of their facilities in Žakanje, Croatia.
“We specialise in producing high-quality, sustainable pellets. What we didn’t have was a way to bring the full value of that sustainability profile to the right buyers,” says Egil Bråthen, co-owner and partner of Bio Peleti Energija.
Ecohz applied the principles of electricity tracking systems to this renewable energy carrier. Each megawatt-hour of wood pellet energy has an identifiable source and production facility. Bio Peleti Energija also prepared a comprehensive life-cycle greenhouse gas assessment using actual operational data and conservative assumptions.
Based on this data, Ecohz found a suitable corporate buyer for the environmental attributes associated with a specific volume of wood pellets, which were sold separately from the physical product. To prevent double counting, contracts for the physical wood pellets reference the buyer of the environmental attributes and specify that the emissions of the physical product must be reported as fossil.
“Ecohz brought unique expertise in an area we had never navigated before, deep knowledge of renewable attribute markets, and access to corporate buyers,” Bråthen continues. “They identified the business opportunity, structured a framework we could work within, and guided us through the process. The result is something we’re genuinely proud of, and proof that the right partnership can unlock value that neither party could have created alone.”
This innovative transaction shows that the fundamentals of EAC markets can be applied to more energy carriers, making renewables more competitive against less desirable energy sources.
“Market actors can be creative while still aligning with the core principles of attribute trading to unlock new revenue streams for clean energy producers,” Holta adds. “We believe that energy buyers want to choose and support renewable energy, even if the independent registries and third-party verifiers to do so are currently lacking. Ecohz’ role is to enable this type of exchange.”
For Bio Peleti Energija, participation in this transaction is about more than enhanced profitability. “We’re contributing to something bigger: a secure, renewable energy supply for Europe, produced right here on European soil,” Bråthen concludes.