Sustainability certification under different jurisdictions

1 © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited.

Sustainability certification under different jurisdictions

Dr Norbert Schmitz, Managing Director, ISCC System GmbH

Joint Workshop “Biofuels Sustainability - Focus on Lifecycle Analysis”

JRC and IEA Bioenergy TCP Task 39

May 16 – 17, 2019, Ispra, Italy


01

02

03

04

05

06

ISCC – Who we are

Verification of Sustainability Requirements with ISCC

GHG Calculation and Verification in Certified Supply Chains

Challenges

Integrity Measures

Conclusions


ISCC facts & figures

3

20,000+ certificates

3,300+ system users

Stakeholder dialogue:

116 ISCC Association

members

30+ certification bodies

360+ ISCC trained auditors

Discussion platform with

4 Regional

and 2 Technical

Committees

System users in

100+ countries

Innovative tools and

procedures to facilitate

audits

8 Voluntary

add-ons to address specific

customer requirements

Training Program (70+ Trainings so far for

auditors and system users)

Use remote sensing to

verify land use change

Integrity Program 3 auditors


ISCC is a multi-feedstock certification scheme applied in more than

100 countries


ISCC is a multi-stakeholder association with 116 members. The

association steers the overall development of the ISCC system

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ISCC principles – a balanced set of ecological and social criteria

Principle 1: Protection of biodiverse

and carbon rich areas

Principle 4: Compliance with Human,

Labour and Land rights

Principle 5: Compliance with Laws and

International Treaties

Principle 2: Good Agricultural Practice

Principle 6: Good Management

Practices and Continous Improvement

Principle 3: Safe Working Conditions

Agricultural feedstock Agricultural crop residues Forestry feedstocks Wastes/ processing residues Renewable non-bio feedstocks

Traceability, Chain of Custody and GHG emission calculation along the supply chain

9 © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited.

Biofuels represent the most important

market for ISCC

Large certified feedstock basis already available (e.g.

palm, soy, canola, cereals, sugarcane, waste/residues)

Feedstock mainly used for biodiesel, bioethanol, HVO

and co-processing (estimate of up to 18 mill. tons ISCC

certified biofuels and bioliquids in 2018)

Major fuel producers are certified System Users of

the ISCC system

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Nearly 70 million tonnes of raw material were ISCC certified in 2017

ISCC certified raw material/ feedstock

Note: Figures based on data collected for the calendar year 2017

Canola

Sugarcane

Soy Palm Sunflower Cereals Corn

Sugarbeet Wood Cotton Shea Nuts Camelina

Landfill gasUCO Tall oil Power-to-GasPower-to-Liquid

Municipal solid waste/

Mixes plastic waste

End-of-life tires

Crude glycerine

Forestry residue

CO2 HusksStraw

Waste and processing residuesRenewable non-bio feedstocks

Forestry / agricultural crop residue


ISCC certifies companies for advanced biofuels that use innovative

feedstocks as municipal solid waste or cellulosic raw materials

Raizen produces bioethanol from

bagasse

BioMCN converts waste-based

biogas into biomethanol

Enerkem produces methanol and

ethanol from municipal solid waste

UPM produces renewable diesel and

bionaphta from tall oil pitch / CTO

Selected companies producing biofuels

out of Palm Oil Mill Effluent (POME)


02 Verification of Sustainability

Requirements with ISCC


ISCC proves compliance with legal requirements for biofuels/

bioliquids in the EU and other important energy markets

Energy

Transport

RED

Compliance with legal requirements

and initiatives

Bioliquids

Heat & Power RED

Biogas /

Biomethane

Biofuels

Road

ISCC EU to show

compliance with

RED/FQD in all EU

Member States

RED

Solid

biomass

Recycled

carbon fuels Aviation

Maritime

Renewable

fuels of non-

biological origin

ISCC EU to show

compliance with

RED/FQD in all EU

Member States

Recognition for

AIREG – Aviation

for renew. energy

in Germany

ICAO – Participation

in CORSIA for

sustainable

alternative jet fuels

ISCC PLUS for

Japanese biofuel

sustainability

requirements

ISCC EU or PLUS

for compliance with

Liquid Fuel Supply

Regulation in

Queensland

Other


Also under RED II, categorisation will have implications with respect to

EU market access, certification and GHG calculation

Advanced biofuels

High iLUC risk biofuels

Low iLUC risk biofuels

Renewable fuels of non-

biological origin

Recycled carbon fuels

Sub-quota of 3.5% (Part A)

1.7% (Part B) but exemptions possible

0% by 2030!

Counted only for 14% transport target, not for overall renewable

energy target

Directly 70% GHG savings required

Food/feed crops can continue to be used if categorised and

certified as low iLUC


03 GHG Calculation and

Verification in

Certified Supply Chains


Different options for producers are available to provide the GHG

emission information

17

1. Use of total default values

2. Use of disaggregated default values

3. Use of actual values (Individually calculated values)*

4. Combination of use of disaggregated default value and actual value

* Or for cultivation also NUTS2 values or typical regional cultivation values in kg CO2eq per dry-ton product.


Typical cultivation GHG values for Member States and third countries

Pre-ILUC Directive NUTS2 cultivation

emissions values

Recognition Australian and Canadian

typical GHG values for canola

Source: EC transparency platform.

Implementing Decisions (CAN, AUS)


All supply chain elements must report the respective components of

the GHG calculation formula. Calculation and values must be audited

19

Final processing Feedstock production Processing

Farm/

Plantation/

Central office/

FGP

Processing

unit

Final

processing

unit

Cultivation emissions eec

Land use change eI

Improved agricultural

management esca

Processing ep

Upstream transport etd

Excess electricity eee

CCR eccr

CCS eccs

E = eec + el + ep + etd + eu – esca – eCCS – eCCR – eee

Processing ep

Upstream & downstream

transport & distribution etd

Excess electricity eee

CCR eccr

CCS eccs


The correct application of the total default value (TDV) must be

verified during the audit at each supply chain element

20

Information on sustainability declaration (SD): “Use of total default value”

Final processing unit takes correct total default value and GHG saving from EU RED tables

Verification if TDV can be used:

• Crop and process

• GHG minimum saving requirement

• Correct handling of TDV in mass balance and on incoming and outgoing SD

Final processing

Processing

Processing

Feedstock production

Farm/

Central office/

FGP

Oil mill (with methane

capture)

Refining Trans-

esterification

SD: “Use of

total default

value”

FFB CPO RBDO PME

SD: “Use of

total default

value”

SD: “Use of

total default

value”

37 g CO2eq/MJ

PME

56% GHG saving

+ Date of operation

start

1. Use of total default values


The statement “Use of disaggregated default value” must be used

together with the respective calculation formula element

21

Within supply chain: Information on SD “Use of disaggregated default value for eec, etd and ep”

Final processing unit takes correct disaggregated default value from EU RED tables

DDVs for transport and distribution can only be applied if a respective value for the specific raw

material and pathway is provided within the RED

Verification if DDV fits:

• Crop and process

• Correct handling of DDV in mass balance and on incoming and outgoing SD

Farm/

Plantation/

Central office/

FGP

Oil mill Refining Trans-

esterification

SD: “Use of

DDV for eec”

FFB CPO RBDO PME

eec: 14 g CO2eq/MJ

etd: 5 g CO2eq/MJ

ep: 18 g CO2eq/MJ

E, savings (%)

SD: “Use of

DDV for eec,

etd and ep”

SD: “Use of

DDV for eec,

etd and ep”

2. Use of disaggregated default values


The correct forwarding of the actual GHG values must be verified at

each supply chain element

22

Within supply chain: Individual information on SD for each calculation formula element in kg

CO2eq per dry-ton product

Final processing unit converts values into g CO2eq per MJ biofuel and calculates total

emissions (E) and GHG savings compared to fossil reference (%)

Verification of:

• Correct transfer of GHG values from raw materials to products via feedstock- and allocation factor

• Correct handling of GHG values in mass balance and on incoming and outgoing SD

Farm/

Plantation/

Central office/

FGP

Processing

unit

Final

processing

unit

SD for crop:

eec: X kg CO2eq/tdry

SD for product:

eec: X kg CO2eq/tdry

ep: X kg CO2eq/tdry

etd: X kg CO2eq/tdry

SD for biofuel:

eec: X g CO2eq/MJ

ep: X g CO2eq/MJ

etd: X g CO2eq/MJ

E, savings (%)

3. Use of actual values (individually calculated values)


ISCC provides templates for sustainability declarations and proof of

sustainability (PoS) to facilitate correct forwarding of GHG information

24

Auditors must verify correctness of GHG information as provided on

sustainability declarations:

GHG emission value

GHG emission option

Separate proceeding of values (etd, ep etc.)


Verification of a GHG Calculator

25 Source: Calculator from Meo Carbon Solutions

Based on

RED

methodology

Formulas and

calculation must

be transparently

displayed and

verifiable!

Annual

updates!

Detailed

reference to

literature or

databases used

All data

sources must

be provided

Input values

and

descriptions

should be

correct and

understandable


04 Challenges


Challenges in the context of RED I / II

Co-Processing

iLUC certification and verification Implementation of RED GHG calculation

methodology

Fuels of non-biological origin: RFNBOs,

recycled carbon fuels

E = eec + el + ep + etd + eu –

esca – eCCS – eCCR – eee


ISCC provides a guidance document for co-processing for ISCC

PLUS – Guidelines for biofuels in the European market rare

Relevant requirements from the EU for co-processing are

available in the Directive 652/2015. So far, requirements

are unspecific

In some Member States already requirements with respect

to co-processing exist. Examples are UK and Germany

How to calculate bio-yield and apply respective

implementation for GHG calculation and verification?

Different yields for fossil vs. bio-based feedstocks

Delegated Act from the Commission required to specify

details of GHG calculation methodology and subsequent

certification approach

Options for the individual calculation of processing emissions of

co-processed products


ISCC provides a guidance document for co-processing and specific

requirements and verification points in the audit procedures/APS

Audit procedure with specific

co-processing requirements

Challenges:

• How to calculate bio-yield and apply respective implementation for

GHG calculation and verification?

• Different yields for fossil and bio-based feedstocks

Three approaches to determine bio-yield available under ISCC

PLUS:

• Energetic Determination

• Determination through efficiency/losses

• 12C or 14C analyses

Calculation of bio-output of simultaneously co-processing is based

on the bio-yield of the process

Determination of bio-yield is always site-specific

Determination of bio-yield either under day-to-day operational

conditions or, where not possible, under specific test conditions


“Novel Fuels” of non-biological origin have been introduced in the

RED II

Liquid or gaseous fuels that are produced from non-

renewable waste streams

(e.g. waste plastics, flue gas)


details regarding GHG methodology and certification

Liquid or gaseous fuels used for transport whose energy

content comes from renewable energy sources other than

biomass (e.g. Power-to-X such as hydrogen made from

renewable electricity)

ISCC is currently developing a guidance document for the

certification of RFNBOs


details regarding GHG methodology and certification

Renewable Liquid and Gaseous transport fuels

of non-biological origin (RFNBOs): Recycled Carbon Fuels (RCFs)


The first Delegated Act for the RED II outlines requirements for iLUC-

risk biofuels

Low iLUC-risk biofuels:

Must comply “with the sustainability and greenhouse gas

emissions saving criteria set out in Article 29 of Directive

(EU) 2018/2001”

Must be “produced from additional feedstock obtained

through additionality measures”

“Additionality” can be achieved by cultivating unused

land and/or achieving yield increase

Waste, residues and forest biomass not classified as low

iLUC-risk

Delegated Act from the commission is necessary to

specify details of certification approach:

• Implementation and verification of iLUC fuels

• Smallholder integration

• GHG methodology and certification

The Delegated Act on low and high iLUC-risk biofuels was published by the European Commission on 13 March 2019


Severe consequences for proceeding

wrong GHG values

System Users, CBs and further market participants contact ISCC in

case of extraordinary GHG values (competitive markets)

Authorities approach ISCC if unusually low GHG values enter the

market

• E.g. quarterly GHG data from national authority

• RTFO UK plausibility of GHG information on proofs of sustainability

• European Commission

ISCC applies different measures to verify received requests:

• Contacts Certification Bodies to confirm the correctness of GHG values

• ISCC Integrity Audits, and verification of entire calculator

• Mailings, clarifications in System Updates to auditors and System Users

Consequences for proceeding wrong GHG values

• Withdrawal of certificate

• Suspension of companies and/or auditors depending on responsibility


Entire supply chains are being verified in respective cases

Farms/

Plantations/

Points of Origin

First Gathering

Point/Collecting

Points

Processing

Unit 2

Trader/Storage Market/

EU - Authortities

Processing

Unit 1

Proof of SustainabilityFor bioliquids pursuant to Arts. 15 et seqq. of the Biomass electricity sustainability ordinance (Biomassestrom-Nachhaltigkeitsverordnung(BioSt-NachV)), or for biofuels pursuant to Arts. 15 et seqq. of the biofuels sustainability ordinance (Biokraftstoff-Nachhaltigkeitsverordnung

(Biokraft-NachV))

Number of the proof of sustainability:

Interface: Recipient: Certification system:

1. General information on biomass / biofuels:

Type, potentialparts:

Energy content (MJ):

The bioliquids / biofuels have been produced from residues or by-products, with by-products not arising from agriculture,forestry, fisheries or aquaculture.

If Yes has been indicated, no further particulars are required for

2. Sustainable production of biomass and/or sustainable production of biofuels pursuant to Arts. 4-7BioSt-NachV/ Biokraft-NachV:

3. Greenhouse gas savings pursuant to Art. 8 BioSt-NachV/ Biokraft-NachV:

Delivery/shipment based on a mass balance system pursuant to Art. 17 BioSt-NachV/ Biokraft-NachV**:

Quantity (t/kWh/m3):

Country of cultivation / Country oforigin*:

Xyes no

X yes noThe biomass complies with the requirements pursuant to Arts. 4-7 BioSt-NachV/ Biokraft-NachV.

Blank by the Federal Office for Agriculture and Food

*Advice:

**Advice:

In the case The proof of sustainability contains materials from multiple countries of cultivation or countries of origin, the

to be completed by the last supplier

- Greenhouse gas emissions (g CO2eq/MJ):

X

The proof of sustainability is valid without signature. The interface is responsible for accuracy of the proof.

Advice:

The greenhouse gas emissions savings potential has been complied with as follows:

Comparator for fossil fuels (g CO2eq/MJ):

X

X

Xfor electricity generationfor combined electricity/heat generation

as fuels

for heat generation

- Compliance with the greenhouse gas savings when used

when used

- Compliance with the savings potential

in the following countries/regions (e.g. Germany; EU):

Identification of the proof takes place by means of its non-recurring number.

Place and date of issuance:

Documentation has been carried out by means of the database of the BLE:

Documentation has been carried out according to therequirements of the following certification system:

Documentation is carried out pursuant to Art. 17 para. 3 Biokraft-NachV.

Documentation has been carried out by means of the following electronic database:

Last supplier (name, address):

X

EU-BM-13-SSt-10001299 Totsa Total Oil Trading S.A.,Geneva, EU-BM-13-Lfr-10000921

ISCC System GmbH, www.iscc-system.org,EU-BM-13

86.186 m³ 2,930,324

100.00% HVO ID

EU-BM-13-16020901

Espoo, 22.02.2016

ISCC System GmbH

83.836.1

Europäische Union

Delivery/shipment has been documented in a mass balance system.X

only two countries with the highest ratios are displayed.

Sustainability

Declaration:

eec + etd

Sustainability

Declaration:

eec + ep +

etd

Sustainability

Declaration:

eec + ep +

etd

OR

Proof of

Sustainability:

- Total E in

gCO2eq/MJ

- Savings

- Start date of

operations

Certification

scheme

Self-

declaration

Requesting clarification for

untypical GHG values

ISCC sets up

Integrity

Assessments

along the complete

supply chain to

verify GHG

correctness


Example negative emissions from land

use change

ISCC was approached by Federal Office for Agriculture and Food (BLE)

because a Nabisy PoS outlined a bonus for emissions from land use

change (negative value for “eL”)

Theoretically possible if conversion of non highly biodiverse

grassland, shrubland, or other land into a plantation increases carbon

stock of the area („net sequestration of carbon“)

ISCC identified all market participants of the relevant supply chain

and clarified, if correct application of requirements for calculation of eL

including the determination of the correct land category had taken

placed

Result: Violation of ISCC principle 1 could not be confirmed, but it was

found that the applied IPCC land category “other land” was not

correct. Consequence: withdrawal of certificate and suspension of

company

Learnings were integrated into ISCC training and communicated to

auditors: if negative GHG emission values for eL or for any other part of

the GHG calculation methodology are detected special attention must

be paid during the verification process!

IPCC guidelines define the climate region and soil type

that a country/ area belongs to

Source: EC(2010), 3751, Commission Decision of 10 June 2010, guidelines calculation land carbon stocks


Overview on shortcomings based on

key learnings: ISCC Integrity Audits

Many companies put much effort in improving GHG

performance by applying complex actual calculations, investing in

new technology and optimizing internal processes

Detected mistakes reflect complexity of indiviudual scenarios

Incorrect, inaccurate or non-transparent calculation of GHG

emissions:

• Incorrect emission factors and missing / outdated sources of emission factors

• Missing downstream combustion emissions of methanol /update respective EF

• Incorrect allocation of GHG emissions to main output product and to co-products

• Incorrect or inconsistent use of conversion factors

• Missing waste water treatment emissions

• Incorrect default value used

• No use of design data and unrealistic assumptions as basis for GHG calculations

• Calculation of processing emissions although not part of scope (e.g. at Collecting

Points)

• Negative values for emissions from cultivation / very low emissions for processing

• Use of software allowing only the visualization of inputs and final GHG results.

Calculation method and correctness of GHG calculations cannot be verified (e.g.

OFGEM)

• Adjusted GHG calculations not send to CB. CB must adjust audit procedure and send

to ISCC


05 Integrity Measures


ISCC Integrity Program 2018: Overview and results

Non-conformities and sanctions:

• Withdrawal of five certificates

• Suspension of seven System Users for a period of 12-60

months

• Two „yellow cards“ and one “red card” have been issued to

CBs by ISCC

• Suspension of one auditor

ISCC analyzes the results from the Integrity Program and

derives adequate measures:

• Adaptations of existing ISCC system documents, audit

procedures, templates

• Development of new documents

• Communication in System Updates, CB meetings, ISCC

trainings, specific mailings to clarify requirements

66 independent on-site integrity audits have been conducted by ISCC in 2018

Increased additional focus on desk audits, e.g. to verify individual GHG calculations or LUC analyses that

are realized in addition to on-site audits

Growing importance of risk-based audits (e.g. in case of allegations of non-compliance or fraud)


Besides the RED methodology, ISCC provides an extensive list of

emission factors and LHV to support GHG calculations of System Users


ISCC has implemented a comprehensive set of measures to

guarantee high quality of GHG calculation and verification

Specific ISCC GHG Trainings for auditors and

system users

Audit procedures with detailed guidance on

GHG requirements

Specific System Updates on ISCC GHG

requirements

ISCC Integrity Program with focus on GHG

calculations

Application of the GRAS tool with lists and

maps of regional agricultural values and

carbon stocks


To verify compliance with Principle 1 ISCC uses innovative tools such

as GRAS, a remote sensing tool to identify risks and land-use change

www.gras-system.org


GRAS analyses sustainability risks globally on different levels,

depending on specific strategies, goals and local conditions

Sourcing areas with a specific radius

Detailed field analysis

Administrative level and cluster analysis


Within GRAS, all NUTS2 values are provided Regional GHG values

for canola in Australia and Canada are also integrated into GRAS


GRAS provides official datasets on biodiversity and recognizes them

as one of the four main pillars in the GRAS assessment

Biodiversity Datasets of Australia

• CAPAD Protected Areas

• Intact Forest Landscapes

• Ramsar Sites

• No Go Areas

• Risk Areas


Using high resolution satellite imagery and EVI time series, GRAS can

identify exactly when and what type of land use change took place 2005 2010 2016

2 1 3

Grassland conversion in 2011

Grassland

2

1

3

Arable land

Image Source: ANCPI Image Source: ANCPI Image Source: Google © GRAS GmbH © GRAS GmbH © GRAS GmbH

Romania, 6.3 ha


GRAS uses this methodology to identify the conversion of forest to

cropland and verifies zero-deforestation criteria of ISCC Principle 1

2011 2013

Left area: 2.4 ha / right area: 6.5 ha


05 Conclusions


Summary

RED is a success story with respect to GHG awareness

and measures to improve GHG performance of entire

supply chains

Biofuels as the only market with mandatory GHG

savings; non-regulated markets (food, feed, industrial

applications) show improvements only in snail speed

ISCC applies strict rules for calculating GHG and data

forwarding, supported by templates, documents and

procedures

Risks and fraud prevention is addressed with a resource

intensive Training and Integrity Program

ISCC supports the GHG calculation for innovative

feedstocks, fuels and processes

Further guidance needed from EC with regards to

implementation of GHG in co-processing supply chains,

low iLUC certification approaches, RFNBOs and recylced

carbon fuels


Follow us on

Thanks for your attention!

Dr Norbert Schmitz, Managing Director,

ISCC System GmbH

[email protected]

Sustainability certification under different jurisdictions

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