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Implementing Sustainability Certification Schemes for Biodiesel

27 January 2011, London

Meo Carbon Solutions GmbH Dr. Jan M. Henke Weissenburgstr. 53 D-50670 Köln www.meo-carbon.com www.iscc-system.org henke@meo-carbon.com

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Meo is a management consulting company. It carries out projects mainly in the field of renewable energy and sustainability

Current activities

•  Build up and operate the International Sustainability and Carbon Certification (ISCC) System, supported by FNR/BMELV

•  Application and implementation of sustainability standards in all market sectors

•  Actual GHG calculations for private sector clients and strategy advise

•  Advice for financial institutions in the field of sustainability as a prerequisite for financing

•  Analysis of current and upcoming biofuels policy on behalf of a private organisation

•  Balancing land use management, sustainable biomass production and conservation. Project on behalf of BMU, carried out in cooperation with WWF

•  Sustainability strategy and implementation measures for companies in different sectors

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Recognized and accepted by relevant market players in Germany and abroad – ISCC one year after take off

•  Starting point: Instrument to proof compliance with the requirements of the Renewable Energy Directive (RED) and national legislation of member states to implement RED

•  ISCC is used by major market players in trade and conversion, share of first gathering points is increasing

•  ISCC has a strong presence in Europe. Acceptance and use in the Americas, South East Asia and West Africa is increasing

•  ISCC components are designed to fulfil the requirements of the RED. The ISCC certificate offers additional security as it covers also ecological and social issues which is of particular relevance in certain countries outside the EU

•  ISCC has been recognized by the German authority (BLE) and has applied for recognition at the EC

•  ISCC development is based on a balanced multi stakeholder approach. Number of ISCC e.V. members doubled within one year

•  ISCC has started to apply the system in chemical /technical and food / feed markets

International Sustainability and Carbon Certification (ISCC) at a glance

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Certificates and registrations show a strong increase since September 2010

No.

*: estimate

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Currently about 340 companies are registered with ISCC. More than three quarters of all registrations are in Europe

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Interest in ISCC certification is increasing in the Americas, South East Asia and also in West Africa

ISCC Registrations / Certificates

Expected registrations

ZWE ZMB

ZAF

MYT

YEM

VUT

VNM VEN

VCT

UZB

URY

USA

UGA TZA

TWN

TTO

TUN TKM

TJK

THA TGO

TCD TCA

SWZ

SYR

STP SUR SOM

SEN SLE

SHN

SWE

SDN

SYC SLB

SAU

RWA

RUS

ROU

REU

QAT

PRY

PRT

PRI

PAK

PHL

PNG PER

PAN

OMN

NZL

NRU

NPL

NOR NLD

NIC NGA

NER

NCL NAM

MOZ

MYS

MEX

MWI

MDV

MUS

MLT

MRT MTQ MNP MAC

MNG

MMR MLI

MKD

MDG

MAR LBY

LVA LUX

LTU

LSO

LBR LKA LCA

LBN

LAO

KAZ

CYM KWT

KOR PRK

COM

KHM

KGZ

KEN

JPN JOR

JAM

ITA

ISL

IRN IRQ

IND ISR

IRL

HTI

HRV

HND HKG

GUY GNB

GRC

GNQ

GLP GIN GMB

GRL

GHA GUF

GEO

GRD

GAB FSM

FJI

ETH

ESP

ERI ESH EGY

EST

ECU

DZA DOM

DMA

DNK

DJI

CYP

CPV CUB

SCG

CRI COL

CHN

CMR

CHL

CIV

CHE

COG CAF

COD

CAN BLR

BWA

BTN BHS

BRA BOL

BRN

BMU

BEN

BDI

BHR

BGR

BFA

BEL

BGD

BRB

BIH AZE

ARG

AGO

ARM ALB

ATG

AFG

ARE

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Processing units dominate in registration, the number of first gathering points increased from 11% to 29% in the last two months

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More than 160 ISCC certificates have been issued, most of them for companies in the EU

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One quarter of all certificates are issued for first gathering points

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Even more important than the number of registrations and certificates is the relative market share as this reflects also the size of the companies

Market Share ISCC EU Bioethanol Production Capacities

Market Share ISCC EU Biodiesel Production Capacities

Calculations based on public figures of industry associations. Shares as of December 31, 2010 In addition, biodiesel and ethanol production units in Central and South America and South East Asia are ISCC certified or are registered for certification.

In the European Union, 5.1 mil. tons of biodiesel and 3.2 mil. m3 bioethanol production capacity are ISCC certified

ISCC ISCC

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ISCC is governed by a system of clear rules. Stakeholders are represented in the ISCC e.V. which is open to new members

•  Vote in General Assembly, participation in important decisions and further system development

•  Possibilty to participate in Technical Committees

•  Reduced rates for the use of the system

•  First hand information about actual developments

•  Technical support by ISCC System GmbH

•  Clear separation of stakeholder representation and daily operations. Stakeholders are thus released from liability of operations

Benefits of ISCC membership

ISCC System GmbH

Day to day operations of the certification scheme

ISCC Association e.V.

Stakeholder forum

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The number of ISCC e.V. members is continuously growing. It has doubled since the inauguration in January 2010

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Prior to registration, the company must choose a certification body (CB). ISCC is already cooperating with 17 certification bodies

•  Contact details available at: iscc-system.org

•  Elements in the supply chain that want to be audited can contact the CBs directly

•  Auditors must participate in 3 day ISCC training

•  Trainings for CBs in Europe, SEA, LA

•  About 300 auditors trained already

Certification bodies recognized by BLE and using the ISCC system

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The certification process comprises four steps. The online registration at the ISCC website is the starting point

Get ISCC registration online via ISCC website 1

Prepare for the audit 2

Audit 3

Receive certificate 4

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Easy ISCC online registration

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Audits conducted by a recognised certification body may have a different focus depending on the element of the supply chain

Farm/ Plantation

First Gathering Point

Conversion Transport Warehouse Transport Transport

Audit focus   Sustainability/

no-go area check

  GHG (if not default value)

Elements of the supply chain

Audit focus   Chain of

custody

Audit focus   Chain of

custody

Audit focus   Chain of

custody   GHG (if not

default value)

Audits conducted by an independent certification body. Certificate issued after successful audit

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Production reports etc.

Focal points of the chain of custody audit: example conversion units

Chain of Custody Audit

Mass balance bookkeeping

Warehouse Conversion Transport

Input docu- ments,

etc.

CoC Management

system

Output docu-

ments, etc.

Supplier Transport

Certificate

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A certificate enables to issue a sustainability declaration with all required information to identify and trace back sustainable products*

* biomass, bioliquid or biofuel

  Amount and kind of sustainable biomass (kg/mt)   GHG Value of biomass (kg CO2equi/t biomass)   Contract number   Name, address and certificate number of issuing party   Name, address of receiving party   Delivery date   etc.

Farm/ Plantation Transport Warehouse Transport

Sustainability declaration

Audit

First Gathering

Point

Certificate

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The ISCC internet platform serves as a main communication channel, and provides information and tools for ISCC clients, members and CBs

ISCC Members, cooperating CBs and ISCC registered

companies have access to additional information on the

execution of an audit and simplification of audit

preparation

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ISCC has developed audit procedures for different supply chain elements. The use of the audit procedures is mandatory for the CBs

ISCC audit procedures for:

•  First gathering point

•  Farm/ plantation

•  Conversion units

•  Warehouses and supplier

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Short document checklists for companies and CBs for an easy audit preparation are available

ISCC Document checklists for:

•  Farm/Plantation

•  First gathering point

•  Warehouse

•  Conversion Unit Oil mill

•  Conversion Unit Refinery

•  Conversion Unit Biodiesel

•  Conversion Unit Ethanol

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ISCC has developed a tool to create proofs of sustainability for the last interfaces

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We invite you to participate in our General Assembly in Brussels

Online registration for General Assembly

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Summary and conclusions

•  Sustainability certification has taken off. ISCC works in practice; used in Europe and overseas

•  ISCC is a global scheme covering all kind of biomass. It is a one stop shop for companies

•  ISCC is a quality standard: It provides more security as it covers also social sustainability issues – at no or marginal additional costs

•  ISCC is easy to handle and based on practical requirements. ISCC is continuously improving

•  After recognition with BLE, ISCC applied for EC recognition. Extension to other markets (chemical, food, feed) ongoing

•  Harmonisation on EC level needed. Several issues still not clarified (e.g. how to handle missing NUTS2 values, definition of wastes/ production residues). Has to be done urgently otherwise market players and international trade will suffer

  Sustainability certification shows impact:

  Farmers start to change their agricultural practices (e.g. better storage and handling of plant protection products, start documentation)

  Financial institutions request sustainability proof prior to financing new agricultural projects

 Companies in other markets follow and start to request proof of sustainability

  Spatial planners interested in considering biodiversity and carbon stocks in their planning