Real time certificate inventory management in Brady’s Igloo
The handling of certificates has become increasingly critical in the era of energy transition technologies. With the rapid evolution of regulations and sustainability frameworks, new types of certificates are emerging alongside established ones. In addition to CO₂ certificates such as EUAs, the market now includes voluntary carbon credits, Guarantees of Origin (GoOs), Proofs of Sustainability (PoSs), and green or blue certificates, among others.
Regulatory frameworks differ significantly between North America and Europe, resulting in diverse certificate trading schemes. Despite these differences, most CO₂ certificates share common characteristics: they can be traded, banked, transferred, and retired or surrendered for compliance purposes.
As compliance deadlines tighten and certificate prices become more volatile, the need to manage certificates as commodities alongside power, natural and renewable gas, and other commodities within ETRM systems become essential. ETRM platforms must support the full deal lifecycle, from trade capture to valuation and retirement as well as market communication across a wide variety of certificate types.
Certificates present unique challenges due to their specific deal characteristics, asset classes, and regulatory requirements. One of the key functionalities related to certificates is inventory management, which tracks the certificate inventory throughout the lifecycle and ensures accurate reporting and compliance readiness.
Brady has taken a significant step forward in this space by introducing real-time certificate inventory management in its Igloo solution, as detailed in a recently published paper
https://www.bradytechnologies.com/media/maximise-efficiency-in-emissions-inventory-management/.
Inventory management for certificates is inherently complex both from a lifecycle perspective and in terms of valuation. Maintaining accurate records requires tracing the underlying trades that contribute to it, as well as monitoring surrendered or expired certificates. Managing the inventory in real time raises the bar even higher. In Igloo, real-time inventory positions are tracked alongside wholesale energy positions, while daily opening and closing balances are maintained separately for clarity and control.
The solution enables users to value inventory against selected market indices, offering full visibility into inventory content and traceability of transactions, including serial numbers, transfers, and retirements. In addition, a complete and auditable transaction history is maintained, supporting both operational transparency and regulatory compliance. Traders benefit from the ability to view certificate positions in the same context as energy positions, facilitating more informed trading and portfolio management. The inventory workflow is fully integrated with the wholesale trading book, delivering a unified view of physical energy and certificate positions.
This development represents a strong foundation for a more comprehensive treatment of environmental certificates. Currently supported certificate types include EU Allowances (EUAs), UK Allowances (UKAs), and California Carbon Allowances (CCAs). However, the architecture is designed for extensibility, with support for Renewable Energy Certificates (RECs) and Guarantees of Origin (GoOs) already on the product roadmap and will be available soon.
By embedding certificate management directly into the ETRM platform, Igloo eliminates the reliance on external spreadsheets, ensures alignment with evolving regulatory requirements, and empowers traders to treat certificates as fully tradable commodities as required in realities of today’s energy markets.
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