EU Requires Sustainable Biofuels

How U.S. ethanol producers can become certified
By Antje Grzesik | April 11, 2012

The U.S. has been a net exporter of ethanol since 2010, when more than 350 million gallons of ethanol going to overseas markets, according to the Renewable Fuels Association. In 2011, U.S. exports reached nearly 900 million gallons, with the European Union one of the top destinations.

The EU has a target of deriving 10 percent of transportation fuel from biofuels by 2020. Thus, ethanol consumption in the EU will increase significantly in the future. The EU 27 Annual Biofuels Report published by USDA’s Global Agriculture Information Network states that the consumption of ethanol for conventional and advanced fuels in the EU will reach 1.498 billion gallons in 2011, whereas only 1.271 billion gallons will be produced domestically. The gap has still to be covered by imports. During 2011 and 2012, Germany and France remain the main markets, and Germany will import 30 percent of its ethanol consumption.

RED Basics
The EU Renewable Energy Directive (Directive 2009/28/EC) establishes a common framework for the promotion of energy from renewable sources in the European Union. In the area of biofuels and liquid biomass for electricity and heat production, the EU set sustainability requirements for renewable fuels to qualify as meeting the mandatory renewable energy targets.  With the RED in effect since Dec. 5, 2010, member states must transpose the directive into national legislation. Last July, the EU Commission approved seven certification schemes that companies can use to verify sustainability claims. The national legislation in Germany is based on certification by voluntary certification schemes.

The directive requires the use of sustainable biomass seeking to prevent companies from converting forest, peatlands or biodiverse grassland for the production of biomass for the use in biofuels for the EU market. Carbon-rich areas or areas with a high degree of biodiversity are not allowed to be used for the production of biomass for biofuels or liquid biomass for heat and power generation. If the land use has been changed after January 2008, biomass from this area cannot be certified as sustainable.

Furthermore, an RED requirement states that biofuels must achieve a reduction in greenhouse gases (GHG) of at least 35 percent in comparison to fossil fuels. Beginning in 2017, the GHG emission savings target rises to at least 50 percent, and in 2018 the target is at least 60 percent for biofuels and bioliquids produced in installations in which production started on or after Jan. 1, 2017.

U.S. ethanol producers exporting into the EU can show that they fulfill these sustainability criteria by being certified under the framework of one of the certification schemes for sustainability and GHG emissions approved by the EU Commission. The EU recognized schemes can be used in all 27 member countries.

The seven schemes approved by the EU Commission are Bonsucro EU, Greenergy, International Sustainability and Carbon Certification, Bioenergy Sustainability Assurance (RBSA), Roundtable on Sustainable Biofuels-EU RED, Roundtable on Responsible Soy-EU RED (RTRS) and 2BSvs. The RBSA, Greenergy and 2BSvs are company- or industry-driven schemes. The roundtable initiatives include Bonsucro EU, certifying sugarcane in Brazil; RTRS, targeting soy from Brazil and Argentina; and ISCC, a global multi-stakeholder scheme for all kinds of biomass. The roundtable initiatives include social and ecological criteria that exceed legal requirements. It should be noted, however, that Bonsucro EU as well as 2BSvs are only partially approved and not recognized for biodiverse grassland, one of the basic requirements of the EU RED. Furthermore, it is not possible to do individual GHG-calculations within these schemes.

Getting Certified
Fully operational since early 2010, ISCC is an international certification system for sustainability and GHG emission savings that can be applied for all kinds of biomass and bioenergy. It was developed through an open stakeholder process involving associations, corporations, research institutions and nongovernmental organizations (NGOs). As a forum for stakeholder dialogue, the association was inaugurated in Berlin in January 2010 and today has 60 members. The member list includes companies such as Archer Daniels Midland Co., Cargill Inc., Bunge, BASF, Bayer and associations like European Bioplastics, Bundesverband Bioenergie, Canola Council of Canada, as well as research institutions like the Kiel Institute for the World Economy and NGOs like the WWF. U.S. members include the Illinois Corn Growers Association, Degart Global LLC  and the Morgan Stanley Capital Group Inc.

ISCC can be applied to demonstrate sustainability in the bioenergy sector and additionally on a voluntary basis for food, feed or chemical applications. Around 1,200 companies from 52 countries are already using it. In the U.S., several ethanol producers already seized the opportunity and became ISCC-certified. A full list of certificate holders is available on the ISCC website (www.iscc-system.org).

Principles, Process
ISCC comprises six principles with respective criteria and does not only aim at the prevention of ecological shortcomings but also at the safekeeping of adequate working conditions and the protection of health of the employees on farms. The verification of the six principles is carried out by the assessment of databases, maps, satellite images, the assessment of internal documents, interviews of personnel, management and stakeholders, as well as visual inspection of company facilities, storage facilities and infrastructure. 

Biofuels have a production chain with many links, from farms to distribution of the fuel. Biomass is also transformed into other intermediate and/or final products. Evidence concerning sustainability needs to be documented regarding the raw material and/or intermediate products used. To ensure the fulfillment of sustainability criteria throughout the whole production process, ISCC has developed a transparent procedure that can be verified by independent auditors. ISCC is cooperating with 17 officially recognized international certification bodies, such as TÜV, SGS and Control Union. A full list is available on the ISCC website.

The process starts at the First Gathering Point—the company collecting sustainable biomass such as an agricultural cooperative or wholesaler buying biomass. All delivering farmers must provide self-declarations of sustainability, of which a predefined sample will be audited. Group audits of farms are also possible. The auditor’s task is to verify onsite that the actual processes match the documentation. Once a certificate is issued, the First Gathering Point can sell and export the certified products to certified wholesalers. The next stage is the certification of the companies doing the biomass conversion to biofuels or other renewable fuels. The certification process can be extended up to the end product reaching the final customer.

In the EU RED, a mass balance method is laid down as the chain-of-custody method to ensure traceability along the entire supply chain. Mass balances use records allowing a quantitative accounting and traceability at all stages of the production and delivery of sustainable biomass. The accounting ensures that the incoming quantity of biomass does not exceed the outgoing quantity.

The certification process also covers the calculation of GHG emissions along the supply chain including both generated GHG emissions and GHG abatement in comparison to the use of fossil energy. This includes emissions from biomass production, conversion processes and transport. The EU RED includes default values for different biomass and biofuel options. Additionally, ISCC offers individual GHG emission calculations for different supply chains. These individual calculations are getting more and more important.

Opportunities
Sustainability certification is now the norm for exporting ethanol into the EU. In the German biofuels sector, for example, only certified biofuel can be used to meet the quota. There also is a potential for premium prices on certified products.  It is a safe assumption that sustainability criteria will apply to other sectors in the future and that voluntary certification makes sense in order to satisfy increasing consumer demand for sustainable products. Sustainability certification of biomass and final biobased products also represents a huge opportunity in general: For the first time, ecological and social standards can be established in the global raw materials markets. It is important to seize this opportunity. Renewable energy producers can lead other sectors in achieving sustainability for future generations.

Author: Antje Grzesik
System Management, ISCC System GmbH
+49 221 37998487
info@iscc-system.org