Renewable Energy: Changes to the Renewables Obligation (Scotland) Order 2010: Statutory Consultation

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Section 3: Biomass Sustainability Criteria

  • We propose to introduce sustainability criteria for certain generators using solid biomass or biogas fuel.
  • We are proposing a minimum 60% greenhouse gas ( GHG) emission saving for electricity using solid biomass or biogas relative to fossil fuel (target of 285.12 kg CO2/ MWh or lower).
  • Following a transition phase during which mandatory reporting will apply, eligibility for support under the ROS for solid biomass and biogas will be linked to meeting the sustainability criteria from April 2013.

Background

3.1 Sustainability reporting for biomass was introduced into the UK Obligations in April 2009. The intention was to develop expertise ahead of a potentially more rigorous, EU-wide sustainability scheme. The current sustainability reporting requires generators to submit an annual report on their biomass feedstocks, such as the country of origin and any land use change since November 2005, but does not set a minimum standard to be achieved. Ofgem is due to publish the first year of sustainable data in the summer.

3.2 More generally, the UK has been very active in Europe and internationally to support the introduction of sustainability criteria for bioenergy, not only to optimise GHG emission reductions and to protect land important on biodiversity and carbon grounds, but also to support a single coherent market that will benefit both biomass producers and users.

3.3 The Renewable Energy Directive (" RED") has now set mandatory sustainability criteria for bioliquids (and biofuels). However, the introduction of sustainability criteria for solid biomass and biogas is at the discretion of each member state, with the Commission only giving recommendations for potential criteria as outlined in their 25 February 2010 report: http://ec.europa.eu/energy/renewables/bioenergy/sustainability_criteria_en.htm.

3.4 There appears to be broad support within the renewable generating industry for introducing solid biomass and biogas sustainability criteria, and to end uncertainty around whether and how the criteria would be applied.

3.5 That support also exists more broadly, with NGOs, planning authorities and the finance sector generally encouraging the introduction of sustainability criteria for varied reasons. These range from preventing deforestation and optimising GHG emission savings, to avoiding unwanted impacts on global food supplies and securing public support for the growth of the bioenergy we need to meet the UK's goals for energy security, carbon reductions and new green jobs.

3.6 However, whilst support for introducing sustainability criteria for solid biomass appears to be widespread, there are concerns that small biomass users and suppliers, such as owners of small woodlands, could struggle to engage with a sustainability scheme. The Scottish Government and Forestry Commission Scotland will be working to ensure that timber from all forests in Scotland which are managed according to the principles of sustainable forest management will not face any disadvantage in accessing the developing biomass market.

Proposal

3.7 We propose to introduce the same sustainability criteria for solid biomass and biogas in Scotland as for the rest of the UK, consisting of the following key elements:

  • A minimum 60% lifecycle GHG emissions savings threshold for solid biomass (including energy crops) and biogas used for electricity generation. GHG emission savings will be compared against the EU's recommended comparator figure for EU-wide fossil fuel electricity (712.8 kg CO2 / MWh).
  • A restriction on the use of raw materials obtained from land with high biodiversity value. We propose to define this in the same way as under the RED (article 17(3)). It includes primary forest, areas designated for nature protection purposes, and highly bio-diverse grassland.
  • A restriction on the use of raw material obtained from land with high carbon stock. We propose to define this in the same way as under the RED (article 17(4)). It includes land which had the status of wetland or continuously forested area in January 2008 but no longer has that status.
  • A restriction on the use of raw material obtained from land that was peatland in January 2008. A similar restriction is imposed on bioliquids by article 17(5) of the RED.
  • Limited exceptions to the above restrictions on the use of raw materials as recognised by the RED in the sustainability criteria for bioliquids - for example, where it is shown that the harvesting of the raw material is necessary to preserve grassland status.
  • Required reporting of the available information on biomass type, format, mass or volume, country of origin, whether waste, energy crop or by-product, if it meets an environmental standard and the name of the standard, plus details of land use change since January 2008.

3.8 The sustainability criteria will not apply to biomass or biogas made from waste (or consisting of waste). This will encourage the use of waste for energy, such as manure and domestic food waste in anaerobic digesters, by limiting the regulatory burden, and is in line with the Commission's recommendation. Non-waste residues, such as straw and grain husks, will however be subject to the sustainability criteria.

3.9 The sustainability criteria will not apply to sewage gas or landfill gas, as these generators have no way of reasonably establishing where their feedstock originated from.

3.10 To limit the regulatory burden on small scale generators who may find compliance too costly or complex, we propose to exclude generators below 1 MW from compliance with the criteria. This is in line with the Commission's recommendation. However, we intend to require small scale generators over 50 kW to factually report against the sustainability criteria set out in paragraph 40. This will allow us to monitor the sustainability of the biomass used by generators below the 1 MW level, and to consider extending the standards over time, albeit with a proportionately lighter touch, should that become warranted.

3.11 To support coherence and clarity across the EU, we are proposing sustainability criteria that correspond closely with the Commission's recommendations within its recent report. This also has the advantage of keeping the sustainability criteria for solid biomass and biogas closely aligned with the sustainability criteria for bioliquids, although there will be some differences. This should reduce complexity, particularly for generators or fuel suppliers who may be dealing with both bioliquids and solid biomass or biogas.

3.12 Our main departure from the sustainability criteria recommended by the Commission is in relation to the minimum greenhouse gas ( GHG) emission saving. The 60% threshold we are proposing, which equates to 285.12 kg CO2/ MWh or lower, is above the 35% minimum GHG emission saving level recommended by the Commission. This signals the Scottish Government's determination to deliver real and significant carbon savings and to be at the forefront of sustainability.

3.13 Other differences between the Commission's recommendation and our proposed sustainability criteria include:

  • applying the sustainability criteria to all forms of solid biomass and biogas (other than landfill gas and sewage gas) - i.e. not just to the types of solid or gaseous biomass for which the Commission has calculated default GHG emission values.
  • Not exempting from the 60% GHG emission savings threshold biomass and biogas produced by installations that were in operation on 23 January 2008.

3.14 Sustainability criteria are a relatively new concept for industry and will take some time to embed in industry processes and operational behaviour, thus we propose to have a brief transition period before receipt of ROCs becomes dependent upon demonstrating compliance with the sustainability criteria. This transition period will allow industry to familiarise itself with the processes and techniques involved, allowing us to optimise the scheme if necessary and deal with any unforeseen problems ahead of the link to ROC eligibility.

3.15 From April 2011, we propose that generators over 50 kW using solid biomass or biogas (other than waste, landfill gas or sewage gas) will have to report:

  • The GHG emission saving from the EU fossil electricity comparator, and the carbon intensity as kg CO2/ MWh, from the use of the biomass or biogas for electricity generation;
  • Whether the biomass or biogas was made from raw material obtained from land with high biodiversity value (within the meaning of article 17(3) of the renewables directive). The Commission has not yet set the criteria and geographical ranges to determine which grassland is to be treated as having high biodiversity value, and so we may not be able to include this in the ROS Order for 2011;
  • Whether the biomass or biogas was made from raw material obtained from land with high carbon stock (within the meaning of article 17(4) of the RED);
  • Whether the biomass or biogas was made from raw material obtained from land that was peat land in January 2008;
  • Biomass type, format, mass or volume, country of origin, whether waste, energy crop or by-product, if it meets an environmental standard and the name of the standard, plus details of any land use change since January 2008 not covered above.

3.16 This report will replace the sustainability reporting criteria currently required under article 54 of the ROS. The proposed exemption for waste, landfill gas and sewage gas means that sustainability reports will no longer be required for the use of solid or gaseous waste.

3.17 Where a generator is unable to provide the information required for the report, we propose that they should be required to explain why they are unable to do so. Where the report shows that a generator has used solid biomass or biogas that cannot be shown to meet the sustainability criteria, we propose that they should be required to explain why they used that biomass or biogas. The reports should be provided by 31 st May immediately following the end of each Obligation period, and will be published by Ofgem for transparency. After the transition period, from April 2013 we propose that eligibility for ROCs will be made subject to generators (of 1 MW and above) demonstrating compliance with the sustainability criteria.

3.18 In terms of practical implementation, we propose to allow the Commission's default values for GHG emissions savings for the various biomass feedstocks to be used. These are set out in Annex II to the Commission's report of 25 February 2010. However, the use of a generator's actual values across the feedstock's lifecycle, such as the actual transport distance, within a suitable GHG modelling tool, will be strongly encouraged for all but the smallest generators.

3.19 We propose that the Commission's recommended methodology should be used for calculating greenhouse gas emissions of solid biomass and biogas to generate electricity. This is set out in Annex I to the Commission's report of 25th February 2010. Unlike the methodology set by the RED for bioliquids, the conversion efficiency of the solid biomass or biogas to electricity will be included in the GHG emissions calculations.

3.20 Sustainable forest management practices, at home and abroad, are a critical element of ensuring biomass sustainability. At the same time we are keen that many more of the unmanaged small woodlands in the UK are brought under active management with resulting biodiversity benefits as well as providing additional home-grown woodfuel supplies. The woodfuel sector is likely to benefit significantly from the RO, and it's right that the material should be sustainably sourced. We are minded therefore that all but the smallest contracts for woodfuel should be sourced from independently verifiable legal and sustainable sources; independent certification schemes provide one method of meeting this requirement. This could be included either as part of the formal criteria or as part of the accompanying guidance to generators, with the requirement on generators to report on the environmental accreditation of the feedstocks they use, allowing us to monitor against this.

3.21 A further important and very challenging issue is that of indirect land use change ( ILUC) , which involves the displacement of food production or other land uses from areas used to grow energy crops; this can erode the carbon savings of bioenergy and lead to habitat loss. Work is underway in the UK and internationally on how best to address this. The European Commission is due to report later this year on biofuels, bioliquids and ILUC, and we will look to implement their proposals for solid and gaseous biomass as appropriate. In addition, negotiations continue to widen the future international carbon accounting rules to include forest management, cropland management, grazing land management and revegetation.

Questions:

  • Is 60% saving (equating to 285.12 kg CO2/ MWh) the right minimum GHG emission threshold?
  • Do you agree that the sustainability criteria restricting the types of land used should be consistent with the criteria imposed on bioliquids by the RED?
  • Do you agree that biomass generators above 50 kW should be required to report against the sustainability criteria from April 2011? What is your view on the information that should be included in the report?
  • Do you agree that for biomass generators of 1 MW and above there should be a transition period of mandatory reporting against the sustainability criteria from April 2011, before compliance is linked to the receipt of ROCs from April 2013?
  • Do you agree that, for biomass generators below 1 MW, compliance with sustainability criteria should not be linked to the receipt of ROCs?
  • Do you agree with the exclusion of waste as well as sewage and landfill gas? Should anything else be excluded?
  • Do consider that sustainable forestry management practises should be a mandatory part of the criteria, or addressed in guidance? In particular, how can the potential environmental impacts on woodlands be balanced against the compliance burdens on small businesses?
  • Do you have any other comments on the issues or proposals in this chapter?