Implication of New EU RED GHG requirements - ISCC … · Implication of New EU RED GHG requirements...

Implication of New EU RED GHG requirements

Andreas Feige, Managing Director, ISCC System GmbH

ISCC Stakeholder Meeting Southeast Asia, Jakarta, October 25, 2017

© ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 2

Implication of new EU RED GHG requirements

In a nutshell • Higher GHG savings target from 2018 onwards (50%)

• CPO customers may ask oil mills for lower GHG emissions

• Oil mills to invest in GHG reduction technologies

• More administrative effort

• More complex GHG documentation

• More complex GHG calculation

•  Lower GHG savings for biodiesel producers (due to inclusion of burning emissions for fossil methanol)

•  Biodiesel producers may ask oil mills to reduce GHG emissions by more than 20% (assuming that producers achieved GHG savings of 50% in 2017)

• Oil mills to invest in GHG reduction technologies

• May increase the demand for bio-methanol


GHG requirements by the EU RED and FQD, which were amended by 2015/1513/EC

Renewable Energy Directive (RED) Fuel Quality Directive (FQD)

2015/1513/EC from 2015 2015/1513/EC from 2015

0"

10"

20"

30"

40"

50"

60"

70"

un,l"Oct"4,"2015" Oct"5,"2015" 2017" 2018" 2020"

%"GHG"saving"compared"to"fossil"fuel"

New"installa,ons" Old"installa,ons"

35 %

50 %

60 % % GHG saving compared to fossil fuel GHG saving

requirements for biofuels:

§  35 % for existing installation until Dec 2017

§  50 % from 1 Jan 2018*

§  60% for new installations directly

§  New installation: Physical production of biofuels/-liquids started after October 2015

Until 5 Oct. 2015

After 5 Oct. 2015 2017 2018 2020

* was amended from 50% from 1 Jan 2017


The Note from the EU Commission will change the GHG methodology significantly*

GHG Note from the Commission

1.  Information transfer of individual GHG calculation formula elements along supply chain

2.  Calculate and forward GHG value per dry-ton matter (applicable for all materials including crude and refined oils and ethanol)

3.  Feedstock factor

4.  Guidance on emission allocation

5.  Further specification on CCR, CCS, and methane capture

6.  Further requirements on competences of auditors and reporting

7.  Compulsory use of EC lower heating values and emission factors

8.  Third country reports with typical emissions from cultivation

9.  Expiration of NUTS2-requirements

Implementation by end of August 2017* GHG Note

* Letter from the EC: „Implementation by the voluntary schemes until end of August is a “prerequisite for continued recognition”“


Main differences between ISCC EU old version and re-recognized ISCC EU version 3.0 following the RED Amendment

Issue Old version Revised version 3.0

NUTS2 values

1.  In EU Total Default Values and Disaggregated Default Values for cultivation only to be used if NUTS2 requirements were fulfilled

2.  NUTS2 value was given in g CO2e/MJ biofuel

1.  Total Default Values and Disaggregated Default Values for cultivation can always be used independently from fulfilment of NUTS2 requirements

2.  NUTS2 values are given per dry matter in kg CO2eq/dry-ton raw material* and must be treated as actual values à Statement on sustainability declaration: kg CO2eq/dry-ton raw material

GHG saving requirements for biofuels

•  35% for existing installations until Dec 2016 •  50% from 1 Jan 2017 •  60% for new installations from 1 Jan 2017

•  35 % for existing installation until Dec 2017 •  50 % from 1 Jan 2018 •  60% for new installations directly

Differences following the Amended RED

* https://ec.europa.eu/energy/sites/ener/files/documents/nuts2_report_values_mj_kg_may_2017.pdf


Main differences between ISCC EU old version and re-recognized ISCC EU version 3.0 following the EC note (II)


Final emission reporting

Final processing unit calculates: •  Sum of emissions in kg CO2eq/t biofuel

and/or emissions in g CO2eq/MJ biofuel •  GHG saving

Final processing unit calculates: •  Actual GHG values in kg CO2eq/t biofuel and/or emissions

in g CO2eq/MJ biofuel for eec + el + ep + etd + eu – esca – eCCS – eCCr – eee

•  Sum of emissions in g CO2eq/MJ biodiesel •  GHG saving

Differences in final GHG reporting


Main differences between ISCC EU old version and re-recognized ISCC EU version 3.0 following the EC note (III)

* Sustainability Declaration


Moisture content

•  Statement of GHG values on Sustainability Declaration in kg CO2eq per ton, reflecting actual moisture content

•  For all products GHG values must be stated in kg CO2eq per dry-ton •  Set up of a calculation formula to calculate emissions per dry-ton product •  On SD*: 2 information on delivered amount: Amount of real moisture and

amount of dry content or moisture factor

Conversion factor

•  Conversion factor calculated by dividing output by input (ton output/ton input)

Feedstock factor: 1.  Intermediates: Raw material needed to produce 1 ton intermediate (ton

input/ton output) 2. Final biofuels: Taking into account energy content (LHV) of input- and

output material: MJ raw materials needed to produce 1 MJ of biofuel

Allocation of emissions

•  Allocation factor to be applied to total emissions including upstream

•  Allocation only relevant for certain parts of the GHG calculation formula – must be applied individually

•  Not to be applied for CCS, CCR and SCA

Differences in calculation factors


For Nitrogen fertilizers, which do also emit GHG relevant emissions (N2O) after application, the IPCC methodology must now be applied

Farm/Plantation

1. Cultivation 2. Processing 3. Transport and

distribution to the final market

2. Processing

Farm/Plantation

Processing unit

Processing unit

...

Extraction Direct and indirect N2O emissions

Old version of ISCC: One Emission factor for N2O emissions of N-fertilizers

!"!"#$%&%'"# = !!"#$%&%'"#!!"#$%! !"!!"#$%&!#!ℎ! ∗ !" ∗ !"!"#$%&'(#)!"!!"!!"!"!!"#$%&!#

!!"!"!!"!!"

!"# =!"!"#$%&%'"# + !"!!! + !!"!"#$%& + !!"!"#$#% + !!"!"!#$%&#&$'

!"!!"!!"ℎ! ∗ !" !

!"#$%!!"#!!"#$%&"' !"#ℎ! ∗ !"

!

After re-recognition: Formular to be applied for calculating N2O emissions of N-fertilizers

EF for N from fertilizer, crop

residues

Synthetic N-fertilizer

input

Organic N- fertilizer input

Crop residue N-input

Conversion factor to convert weight N

to weight N2O (kgN2O/kgN)

!!!!!!"#$%&!"!!2!ℎ! = ! !! !"!!

!! + !!!" !!!!!! + !!" !"!!

!! ∗ !"! !"!!!!!!!"# ∗ 44/28

Amount N2O-N produced from leaching, runoff of N

Amount of N2O-N produced from atmospheric deposition of N

!!!!!!"#!$%&'!"!!2!ℎ! = ! !2!_!(!"#) !"!!!!!!

!! + !!2!_!(!) !"!!!! ∗ 44/28

!"!!!!"#$2!"

ℎ! = ! !!!!!!"#$%& !"!!!!!! + !!!!!!!"#!$%&' !"#!!

!! ∗ 296


Further specification on methane capture provided by EC note. Must be verified on-site

Palm oil mill and POME treatment

•  At a palm oil mill the most relevant emission source is methane emissions from palm oil mill effluent (POME). These can be reduced tremendously if methane capture devices are applied

•  It must be verified if the following requirements are fulfilled: •  Absorption of total wastewater in a closed system (only short-term storage of

fresh wastewater) and supply to a methane capture device •  Methane capture device is in good condition, leakages are non-existent •  Use of biogas for energy purposes or flaring of the biogas


The EC Note sets further requirements for auditors that verify calculations of actual GHG values

§  Must have the appropriate specific skills, including relevant experience in this field

§  In advance of the planned on-site audit, the economic operator shall make available all relevant information concerning the calculation of actual GHG emissions to me

§  Should record the emissions from the processing occurring at the audited site (emissions after allocation) and if relevant the achieved savings in the auditing report

§  In case those emissions deviate significantly from typical values auditor shall include information in the report that can explain the deviation


Emission factor for fossil methanol – must include combustion emissions (European Commission) •  EC recommends to use standard calculation value (emission factor) for fossil methanol from

published list, which includes upstream and combustion emissions: 99,57 g CO2eq/ MJ Methanol, which equals 1,98 kg CO2eq/kg Methanol*

•  The following options can be applied according to ISCC

1.  EF Methanol including upstream and combustion emissions: 1,98 kg CO2eq/kg

2.  EF Methanol (only combustion): 1,38 kg CO2eq/kg (Source JRC Technical Report, Calculation based on molar mass) + individual EF for upstream chain, e.g. 0,42 kg CO2eq/kg (Source Ecoinvent)

* Lower Heating Value Methanol: 19,9 MJ/kg


GHG processing emissions of the biodiesel plant are 46% lower if methanol combustion emissions are not included

17

9

0

5

10

15

20

25

Value based on disaggregated default value from EC (including methanol

combustion emissions)

Value based on disaggregated default value from EC (excluding methanol

combustion emissions)

g CO2e/MJ PME GHG emissions of the biodiesel plant (g CO2e/MJ)


The GHG emission savings of PME are 14% lower if combustion emissions of methanol is included

56 65

0

10

20

30

40

50

60

70

80

90

100

Value based on disaggregated default value from EC (including methanol combustion

emissions)

Value based on disaggregated default value from EC (excluding methanol combustion

emissions)

% GHG saving of PME compared to fossil reference (%)

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