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Biofuels Sustainability Schemes: reassessment time

Sustainability Schemes were first approved five years ago and they are now being reassessed for the next five years. What will happen to sustainability certification into the future?

In August 2011, the first Voluntary Sustainability Schemes were recognised by the European Commission for verifying compliance of biofuels with the sustainability requirements of the Renewable Energy Directive (RED). Approval runs out after five years so the initial Schemes are currently being reassessed. Now is a good time to reflect on the first five years of operation and what the future holds. The purpose of the EU approved Voluntary Sustainability Schemes is more than just showing compliance with the RED, they should also reassure the public that certified biofuels are sustainable and that they can fulfil a valuable role in de-carbonising transport. This article explores if the Voluntary Sustainability Schemes have fulfilled their role.

Since 2011 a total of nineteen Schemes have been approved with a wide range of attributes[1].  Some Voluntary Schemes are specific to one particular feedstock e.g. Bonsucro for sugarcane, Roundtable on Sustainable Palm Oil (RSPO) and Roundtable on Responsible Soy (RTRS). Others cover all feedstocks and technologies e.g. ISCC (International Sustainability and Carbon Certification) Red Cert, 2BSvs (Biomass Biofuels voluntary scheme) and RSB (Roundtable on Sustainable Biomaterials). Right from the start, the ‘Roundtable’ Schemes with NGO members, included social and environmental sustainability principles, which go beyond the requirements of the RED.  So safety, workers rights, biodiversity and land rights are protected in areas of the world where they are not necessarily enshrined in law. These Schemes, which are more difficult to comply with, have gained more credibility, not only for their multi-stakeholder involvement but also for their robust assurance and transparency. This is in contrast to narrower Schemes, which are criticised as not going far enough to ensure biofuels are sustainable.  These conclusions come from studies that have been carried out over the past few years assessing the different Schemes.[2]

With a free market in sustainability certification, growers, processors and biofuel companies can, in theory, choose the Scheme that fits with their level of commitment to sustainability. So all Schemes should have a chance to flourish with consumers making a purchasing decision based on a real choice. However over the past five years it has become apparent that sustainability certification has evolved in a way that was not predicted.

From the beginning, the European Commission allowed all Schemes to decide whether to accept material certified by other approved Schemes into their chain of custody, even though the RED indicates that mutual acceptance is the desired outcome. Most Schemes chose not to follow this lead of mutual acceptance, worrying about their reputation. One Scheme (ISCC) adopted the opposite strategy and did initially accept all biomass and biofuels certified by any other EU approved Scheme. Their approach appealed to downstream operators like processors, traders, storage companies and blenders, who only needed one chain-of-custody certification to accept biofuels or biomass certified by any Scheme. ISCC quickly became the market leader. If growers had another approved certification e.g. Bonsucro or RSPO, then that Scheme’s brand identity was lost when biofuel passed to a transport, storage, processing or blending facility.

Wastes and residues are now the preferred biofuels feedstock in Europe. ISCC has prohibited its certificate holders from accepting biofuels made from waste and residues certified by other Voluntary Schemes, with the exception of Red Cert. This cemented their market dominance. ISCC also said at their Annual Meeting this year that they might extend this ban to all types of biomass and biofuels, which would go even further to limit market access for other Schemes.

So is a functioning free market for biofuel certification important? Aside from the economic risks of a market dominated by one provider, it is perhaps also contributing to the public’s scepticism about the benefits of biofuels and the bio-economy in general. People understand that the NGO supported Sustainability Schemes are sidelined in biofuels, and have scarcely penetrated the biomaterials sector.  It is understandable then if the public and politicians are not convinced about the sustainability of biofuels and the part they should play post 2020.

There are also Voluntary Sustainability Schemes owned by individual biofuels operators. It is not clear how a Scheme run by one company for assessing the sustainability of the biofuel it produces could increase public confidence in the sector.

So how can the situation be remedied and the best Sustainability Schemes increase their uptake? The successor to the RED, the ILUC Amendment to the RED (ILUC Directive), does not really offer a solution. The only change to the status quo is that all Voluntary Schemes have to accept any Member State Scheme that is approved as a Voluntary Scheme. Change will therefore have to come from elsewhere.

One idea is that the ‘Roundtable’ Schemes could work together as an alliance to provide a common chain of custody certification that gives them more visibility. Launching a common chain of custody certification would involve some compromises by participating Schemes, and it may have to be approved by the Commission, but it offers a route to increasing their market presence and a real choice to consumers. It would offer a practical alternative to companies who want to support the best biofuels. Operators processing waste materials may still need an ISCC chain of custody certificate as well.

Another idea, put forward by the European Biodiesel Board is that verification of wastes and residues should be an industry wide initiative, which they call the Register of Biofuels Origination (RBO). This would dovetail with the current Sustainability Schemes. In practice it would function as an online chain-of-custody verification with the benefit that it could offer equal access to all Schemes, approved by the EU for wastes and resides. Such a register would only work if it were compulsory for all operators. It would entail an extra layer of administration and cost, as all transactions down the supply chain would have to be logged. Up to now the European Commission has said that it cannot act to make such a register compulsory, so the RBO is in discussion with France and other Member States to try and gain the necessary acceptance.

The need for some sort of EU wide register of sustainable biofuels is also being driven by the aviation sector, which is part of the European Emissions trading Scheme (ETS). Biofuel qualifies for a zero emission factor in the ETS if it is compliant with the sustainability requirements of the EU RED. Airlines fly between all EU countries and want an easy way of fulfilling their obligations under the ETS. Biofuels are the best option for reducing greenhouse gas emissions from aviation and airlines are particularly conscious that their customers want them to use the most sustainable biofuels. Any EU wide register or scheme should treat all Sustainability Schemes equally and not allow one Scheme to block market access for the others. At a recent meeting of the aviation biofuels sector in Brussels, the German system Nabisy used for road transport biofuels, was discussed as a possible answer. Although Nabisy itself allows equal access for all EU approved Sustainability Schemes, it has not prevented the market dominance of ISCC in road transport biofuels.

Conclusions

The first EU approved Voluntary Sustainability Schemes are going through the process of reassessment. The re-recognition of ISCC was published on the 10 August, in the Official Journal of the European Union. All decisions will also be posted on the Voluntary Schemes webpage 1.  Measures to strengthen upstream verification of wastes and residues are expected. Extra reporting and transparency are also now required by the Commission, which may deter some of the small Schemes from continuing.

 A continuation of the status quo, with the certification market dominated by ISCC and the relegation of the NGO supported Schemes to the sidelines does not improve the public reputation of biofuels. Action is needed to open up the biofuels certification market so that there is a real choice and the brands identities of the ‘best’ sustainability schemes can increase their visibility, provide market pull for the most sustainable biofuels and thereby improve the reputation of biofuels in Europe.

This article was first published in Biofuels International

Published: 18 August 16

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