Guarantees of Origin: Explaining the Difference Between Futures & Forwards

Forwards and futures are a massive point of confusion in the Energy Attribute Certificate (EAC) market. Not least because they sound similar, but also because they both describe a very similar thing: forwards and futures both allow parties to lock in a price for delivery at a future date, for certificates that are not yet issued. But how that contract is structured is where the core differences lie, and this article will walk you through them clearly. You’ll leave with a solid understanding of the distinction, ready to make an informed decision on whether EAC forwards or futures are right for you, and explore venues for each.

To start, go back to basics: What is “selling spot”?

Selling spot is straightforward. It just means selling the certificates as they are generated or from inventory, at whatever the market price is at that time.

The certificates already exist, whereas with futures and forwards, crucially, the certificates do not need to exist at the point of agreement due to monthly issuance being the common standard for nearly all registry operators (exceptions include Brussels , and Poland).

What is an EAC forward contract and how does it work?

An EAC forward contract is a private, bespoke, bilateral agreement between two parties, either to buy or sell a defined quantity of Guarantees of Origin at a fixed price on a future delivery date.

Entering into a forward contract (or, more commonly, “buying/selling forward”) means agreeing now to sell future certificates at a fixed price. EAC issuance generally happens monthly, so agreeing ahead of time means you are entering a transaction for certificates that are yet to be generated. To understand the “freshness” appeal that dominates the GO market, see our articles on expiry and disclosure deadlines that go into greater detail.

Deal participants usually think about forwards in this way:

• Forwards give the buyer more price certainty, but mean they risk overpaying if the market falls later.
• Forwards give the producer (seller) more price certainty, but also mean they might miss out if market prices rise later.

A major distinguishing feature is that the forward’s contract terms, including quantity, price, delivery date, and certificate characteristics/ attributes such as technology, COD, and country of origin, are all fully negotiable between counterparties (as is the nature of a bespoke OTC contract).

How are EAC futures different from forwards structurally?

GO futures , available on regulated venues, are standardised exchange-traded contracts that are cleared through a central counterparty. They’re a static, unchanging instrument with no room for negotiation. For instance, each EEX lot is fixed at 1,000 GOs , with each GO representing 1 MWh of electricity attributes, and the contract is priced in EUR per GO. Exchange venues are not integrated with registries themselves , causing a fragmented user experience for those who are just looking for a single place to buy, trade and store GOs.

Additionally, unlike forwards, futures have taken a more conventional route to eliminate bilateral counterparty credit risk. For instance, with EEX, a central clearing house, the ECC ( European Commodity Clearing ), sits between buyer and seller on every trade. Their job is to ensure settlement - dropping out is not a simple feat; in order to trade on EEX, posting collateral is mandatory. This is a universal, defining characteristic for futures exchanges of any commodity or type.

The standardisation seen with futures also means no custom terms: technology, country, and vintage flexibility available in forwards simply are not as readily available in futures, because the instruments are defined in exact instrument-level terms. This can be constraining for buyers who are looking for specific energy attributes, and forward contracts are more accommodating if you’re looking for a complex or higher-credibility mix (as per additionality and biodiversity criteria), such as EKOenergy Eligible GOs .

Common Contractual Terms for Forwards

The actual contents of the forward sale are highly customisable and can be very different from deal to deal, but because forwards aren’t standardised, you’ll need to have a loose idea of what to expect when looking at forward contracts. Generally, everyone agrees on how these transactions should be structured.

Most forward contracts include, to some extent:

1. Payment: Generally, contract terms specify that the buyer must pay after receiving the goods and within a set timeframe.
2. Liability: Typically, for a forward sale, the liability is usually limited to the equivalent of the Deal Value, which is essentially how much money is expected to change hands across the course of the entire deal. It is what a counterparty is obligated to buy: if the buyer agreed to pay €10,000 for 10,000 GOs, then the liability is set at €10,000.
3. Penalty / Damages: If the buyer eventually does not buy or the seller does not sell, the defaulting party may also be required to pay a penalty. By nature, penalties are not included within the liability limit. Interestingly, depending on market conditions, the penalty might not amount to anything. In order to compensate their counterparty, the defaulting party has to pay the difference between their deal value and what it now costs to complete the same sale/purchase.

Which instrument suits corporate GO procurement better?

Forwards suit buyers looking to populate an inventory with GOs that meet specific compliance requirements under GHG Protocol Scope 2 , CSRD , LEED , or RE100 . Typically, this means they are seeking a specific combination of attributes, like technology, vintage, and country of origin, or are looking to secure a very specific quantity of GOs in order not to overshoot their projected consumption figures, which isn’t possible with the fixed sizes of a futures deal. Forward buyers are also not concerned with selling their forward position, accepting that they complete as they are written or via consensus agreement to terminate.

On the other hand, futures can be offloaded very quickly and are themselves liquid. They mostly suit participants who are much larger and therefore are more comfortable with standardised sizes; they don’t care about overshooting their consumption (large trading houses are not buying GOs to match their own consumption, after all). These participants prioritise exchange-level price discovery, capital efficiency, and the ability to hedge without bilateral credit exposure thanks to a central counterparty (clearing party). You also need to be able to stomach fees : On EEX, a buyer faces the traded certificate price, exchange transaction fees, ECC clearing fees, delivery fees if they hold to expiry, and potentially also membership, market-data, broker, clearing-member and registry-related costs.

It’s not either/or:

The two instruments are also complementary in practice and how they slot into the market: informationally, futures are fundamental to establishing benchmark forward-in-time price signals for the broader market , while forwards handle the attribute-specific, finer-detailed procurement that corporate sustainability frameworks require.

Note on regulation: From a regulatory standpoint: futures are standardised, exchange-traded, and centrally cleared contracts, so they sit within formal exchange and derivatives regulation, which participants should be aware of. By contrast, forwards are privately negotiated “over-the-counter” (OTC) contracts, so they are substantially more flexible but, as a result, usually carry more bilateral counterparty and delivery risk. The specific terms and provisions of a contract (and their ability to enforce it) are the only recourse an aggrieved buyer or seller might have.

Where is the best venue for buying EAC forwards?

Futures vs forwards, admittedly, is rarely the explicit, well-defined dichotomy that most buyers end up facing. A more realistic tension that causes buyers to inevitably investigate whether forward vs futures procurement is right for them is the fact that spot market prices are volatile and it’s nice to lock in prices for compliance purposes ahead of time.

For multinationals to do this well, that means securing ahead-of-time certificate coverage across multiple European markets in order to prepare for Scope 2 compliance in advance. Instead of coordinating separate counterparties and hopping between different registries, forward procurement on a platform like Soldera enables market access to the EAC volumes of 4,000+ renewable energy producers. Sustainability teams only have to deal with one counterparty, one invoice, and can have unlimited account seats for their whole team. Not only this, but the platform consolidates scheduled deliveries, global registry execution, and local cancellation statements , all from a single workspace. When it’s time to report, they can export registry-sourced , device-level documentation for their energy consumption, as well as an audit trail with all of their platform activity. If you want to lock in future coverage cleanly now, book a demo with Soldera.