Editor’s note: This is the third post in the five-part series, ‘Market instruments explained’, where we examine the prospects and risks of market instruments in corporate emissions accounting. In the series, we cover key debates around chain-of-custody models, commodity certificates, multi-statement GHG inventories and transition targets. By bringing together perspectives from standard-setters, companies and civil society, we aim to bring more clarity to this complex but increasingly central topic.

Key takeaways

• Book-and-claim has a compelling theoretical rationale. It serves a different purpose to mass balance accounting. Positioning it as inherently less credible because it lacks physical connectivity overlooks its distinct role and could legitimise weaker mass balance approaches.
• The credibility of book-and-claim depends on why it is being used. Different use cases, such as addressing traceability constraints or supporting the scale-up of emerging technologies, may require different rules and safeguards.
• Robust governance is essential for scaling book-and-claim. Its credibility ultimately hinges on robust oversight that can ensure consistency, transparency, and integrity as these systems expand.

Book-and-claim appears to be growing rapidly in importance within corporate climate strategies, particularly in sectors facing traceability challenges and restricted access to nascent low-carbon technologies. Companies are already using these systems despite the absence of clear, widely agreed rules. Their treatment in GHG inventories and target-setting remains under debate in ongoing revisions of the Greenhouse Gas Protocol (GHG Protocol), Science Based Targets initiative (SBTi) and International Organization for Standardization (ISO) frameworks.

However, without clear guardrails, the risks are significant. The inappropriate use of book-and-claim systems can enable misleading claims, weaken or delay direct supply chain transitions by offering a lower-cost alternative and ultimately undermine the credibility of corporate climate action. The central question is therefore not whether book-and-claim is inherently good or bad, but under what conditions its use can deliver credible, real-world impact.

In this blog, we explore what book-and-claim systems are, why companies use them, the risks associated with integrating them into corporate climate accounting without robust guardrails and what robust guardrails could look like in practice.

What book-and-claim is and why companies use it

Book-and-claim systems separate the environmental attributes from the physical product. Similar to renewable energy certificates, one actor purchases a ‘green’ attribute, such as a certificate for low-emissions steel or sustainable aviation fuel, while another receives the physical product without the associated claim. This decoupling enables companies to support product decarbonisation without needing to purchase the physical product itself, which may be physically not accessible to the buyer, too costly or lead to an increase in emissions due to long-distance procurement.

Book-and-claim is often compared to mass balance (see the second blog in this series on mass balance) and portrayed as less credible because it lacks a physical connection between the decarbonised product and the claimant. However, the two approaches serve different purposes. Book-and-claim serves as a financing and allocation mechanism where traceability is infeasible or where companies support nascent technologies that are inaccessible in their direct supply chains. Comparing the two solely on the basis of physical connectivity overlooks these distinct roles and risks oversimplifying the debate, potentially legitimising weaker mass balance approaches.

Different uses of book-and-claim may require different rules

Different applications of book-and-claim rely on different theories of impact, and the rationale for using these systems varies significantly across sectors and supply chains. Some aim to address traceability constraints, while others are designed to support the scale-up of emerging low-carbon technologies. This distinction matters because the credibility, risks and appropriate guardrails for book-and-claim depend heavily on the challenge the system is intended to address. 

There are two fundamentally different rationales for allowing companies to use book-and-claim in emissions inventories.

First, book-and-claim can be used to claim outcomes for interventions in supply chains where physical traceability is not technically feasible. This applies in cases such as electricity consumption, where electrons cannot be traced through the grid to specific generators, or complex agricultural supply chains, where commodities are highly mixed and fragmented, making other accounting systems infeasible. In these contexts, certificates are used to allocate the outcomes of real interventions that physically occur within a defined system boundary but cannot be directly linked to specific buyers.

Second, book-and-claim can be used to support the emergence or scale-up of low-carbon technologies that are not yet physically accessible to buyers, either because they are still nascent or geographically constrained. This logic is particularly relevant in sectors such as freight and aviation, where sustainable aviation fuels (SAF) and marine fuels are both limited in supply and unevenly distributed. In such cases, book-and-claim is positioned as a mechanism to bridge the gap between distributed demand and highly concentrated, limited supply.

The risks: why strong and differentiated guardrails are important

As there are fundamentally distinct rationales for using book-and-claim, different use cases may require different rules and safeguards. Without strong and differentiated guardrails, book-and-claim can create significant risks for the credibility and effectiveness of corporate climate action. These include:

• Misleading signals on progress: Without transparent and accurate communication, book-and-claim can create an inflated impression of decarbonisation within the value chain. This may mislead investors and policymakers by distorting the true level of progress. 
• Disincentivising supply chain transformation: While certificates can offer a lower-cost or more practical solution, they may reduce companies’ incentives to actively engage in meaningful emissions reductions across their value chains. This could slow real transformation efforts and result in higher emissions over the long term.
• Double claiming and inconsistent accounting: Where the environmental attribute is sold separately from the physical product, there is a risk that multiple actors claim the same emissions reduction outcome. This risk is heightened if downstream users of the physical product, now stripped of its attributes, are not required to adjust their emissions factors accordingly.

What strong and differentiated guardrails look like in practice

Conditions for scaling nascent technologies

Where book-and-claim supports emerging technologies, its credibility depends on two conditions being met simultaneously.

First, the technology must be genuinely nascent or geographically constrained. If it is already widely available, there is no clear justification for using certificates instead of direct procurement.

Second, the technology must be aligned with net-zero pathways. Nascency alone is not sufficient; support should not reinforce incremental improvements that risk locking in high-emitting systems. For example, the possibility of using biomethane certificates to claim emission reductions from gas heating in manufacturing processes overlooks, and potentially distracts from, the fact that replacing gas-based heating systems is the long-term transition needed in these cases.

These are joint conditions: one ensures that book-and-claim is used only where it is needed, while the other ensures it contributes to long-term decarbonisation. Treating them as alternatives undermines the rationale for this use case.

One way to operationalise this may be through technology allowance lists linked to transition pathways and regularly updated. While promising, such approaches also raise governance challenges, as decisions on eligibility can define transition trajectories and may be subject to competing interests.

Additionality requirements should differ by use case

If book-and-claim is intended to finance interventions that would not otherwise occur, then certificate procurement should have a demonstrable causal impact on outcomes. However, the way this is demonstrated varies across use cases.

For truly nascent or constrained technologies, additionality may be largely implicit and further additionality tests may not be needed. This logic relies on a high bar for demonstrating technology nascency and limited access.

In contrast, for mature systems with traceability constraints, additionality cannot be assumed. Evidence from existing renewable energy certificate markets suggests that short-term or spot purchases do not reliably drive new supply or system-level change in such cases. Further additionality tests are therefore needed.

There are many different types of additionality tests, each with its own advantages and limitations. Simple additionality tests, such as demonstrating that an intervention is not common practice or  goes beyond regulatory requirements, may offer a practical screening function, but they do not necessarily ensure that interventions lead to meaningful system-level change. A combination of multiple tests could offer more confidence that system-level impacts will occur. 

In some cases, additionality may be more credibly demonstrated where certificate procurement is linked to long-term offtake agreements or financing structures, as seen in fuel supply agreements for SAF, or long-term purchase power agreements (PPAs) for new renewable electricity installations. These arrangements can provide clearer evidence that revenues are directly enabling new production capacity, rather than simply reallocating existing supply.

Accounting integrity depends on preventing double-counting and misattribution

A central challenge for book-and-claim is ensuring that certificates reflect real, attributable emissions reductions without enabling double-counting or overstating impact. 

Many frameworks seek to address the potential risk of double-counting by applying residual emissions factors to products once their low-carbon attributes are sold. While this can preserve formal consistency in theory, ensuring its application is challenging and sometimes unrealistic in practice, particularly where companies rely on averaged rather than verified supplier data. 

This double-counting challenge is not uniform across use cases. For nascent technologies with very limited market penetration, the risk of distortion may be relatively small, as residual emissions factors would not differ significantly from sector averages.

However, for more mature technologies used in the context of traceability constraints, the risk of double-counting and misattribution becomes substantially more pronounced, and these tensions may be difficult to fully resolve in practice. This implies that, in such use cases, the application of book-and-claim may need to be limited to a relatively narrow set of cases where the potential for real impact is highest, and the use of residual emission factors remains practically feasible. In other contexts, the challenges to accounting integrity may outweigh the benefits.

A related issue is how certificates are generated. Some approaches propose aggregating, or ‘stacking’, incremental improvements across multiple units to generate a single, larger claim. This risks overstating impact by attributing more emissions reduction than any individual intervention achieves, potentially delaying more transformative shifts. Robust approaches should therefore ensure that certificates only reflect what can be credibly demonstrated within the defined system boundaries and mirror the actual technology or process change implemented.

Robust governance matters for scaling book-and-claim

A number of standard-setting processes and initiatives (including the GHG Protocol, the SBTi, the AIM Platform, the Task Force for Corporate Action Transparency (TCAT), and sector-specific perspectives such as those from Rocky Mountain Institute and the Smart Freight Centre) are actively developing guidance on book-and-claim. These efforts increasingly reflect a shared understanding of key challenges, including additionality, technology maturity, supply chain association and double counting. However, current approaches do not always distinguish clearly between different use cases and underlying impact logics for book-and-claim, and some proposed guardrails remain too flexible to sufficiently mitigate associated risks. Even if robust safeguards can be defined, an important question remains: how can they be governed at scale? To date, experience is limited to a small number of energy and commodity certificate systems in GHG accounting, each with well-documented limitations. Ongoing revisions to the GHG Protocol may help consolidate this fragmented landscape by introducing clearer criteria. However, this process is also likely to legitimise and significantly expand the use of these mechanisms.

This raises a broader governance challenge: what happens when such commodity certification schemes are used for many more commodities? Who provides oversight that certification schemes meet the criteria for use set by standards, and how can consistency and integrity be ensured at scale? Alongside further work on the technical design of such systems, it is essential to address these governance questions head-on. While book-and-claim has a compelling theoretical rationale, its credibility ultimately hinges on robust oversight that can ensure consistency, transparency and integrity as these systems expand.

The next blog post in this series will explore the multi-statement GHG reporting structure proposed by the Greenhouse Gas Protocol.