A Green Certificate is a tradable economic instrument that embodies the environmental benefit of renewable electricity production. This environmental benefit is global, and thus can be traded separately from the physical power, across power systems and national boundaries.

Generators of electricity from renewable resources are awarded a certificate for a predetermined unit of energy produced. Each unique certificate is concrete evidence of renewable energy production.

Certificates have a market value, meaning that renewable generators can obtain additional money for their power, in addition to straight electrical power sales.

Markets for Green Certificates are created by enlightened electricity customers buying 'green power' or more importantly, government targets which obligate electricity supply companies or consumers to buy a certain amount of clean power by law.

Due to its market-based nature, a Green Certificate trading system has the potential to lead to greater renewable energy production for the same investment. Such a system can contribute to the EU objective of generating 22% of Europe's electricity from renewables by 2010 in the most cost-effective way.

A TGC system:

• removes the physical barriers to the trade in the benefits of renewable energy.

• facilitates the effective exploitation of renewable resources.

• enables competition to drive down prices.
• enables market participants to fulfil their obligations to government and renewable energy customers in a practical and cost effective way.

• allows monitoring of renewable electricity production and use.