In this final stage, we will present a synthesis of the concepts of traceability and chain of custody, We will work on the definition of small producers and how to correctly identify their farms and plantations within the scope of these standards. In addition, we will present a panel on sustainability characteristics for batches of material output in different scenarios..
Definitions
Each element of a sustainable materials supply chain must provide evidence of compliance with sustainability criteria and reduction of greenhouse gas emissions (GEE) of the Renewable Energy Directive (EU) 2018/20011 (often referred to as RED II).
According to the International Organization for Standardization (ISO), the term “traceability” describes the ability to identify and trace the origin, the processing history, the distribution and tracking of products and materials across supply chains.
“Chain of custody” is a general term for the transfer process, monitoring and controlling inputs and outputs and related specific information as it moves through the supply chain.
The combination of traceability and chain of custody requirements ensures that the physical flow of materials can be tracked throughout the supply chain, which guarantees the integrity of sustainability statements.
According to the ISCC, the following elements of the supply chain are subject to certification: farms and plantations, points of origin, first collection points, central offices, collection points, merchants, warehouses and processing units.
Minimum Requirements for the Management System:
- Management Responsibilities
- Procedures, Reports and Documentation
- Employee Qualification and Training
- Technical Equipment
- Internal Audits
General Information on Sustainability Declarations
- Supplier name and address
- Recipient name and address
- Related contract number
- Sustainable material shipping date
- Address of the point of dispatch/dispatch of sustainable material (ex: processing unit, storage facility, charging station, biomethane input) (applicable if different from the supplier's address)
- Address of the point of receipt/reception of sustainable material (ex: processing unit, storage facility, charging station, biomethane exit point) (applicable if different from the recipient's address)
- Certification system name and supplier certificate number
- Date of issuance of the Sustainability Declaration
- The group member number (in the case of group certification)
- Unique number of the Sustainability Declaration
Product related information
- product type (for example, feedstock, crude oil, biodiesel, biometano, HVO, etc.); the product group must be reflected
- Feedstock (for example, rapeseed, sunflower, OAU, crude glycerin, etc.)
- Country of origin of the raw material: Country where the farm or plantation is located (for biomass and biomass-derived products); country where the point of origin is located, that is, where the waste / waste was generated (for waste / waste and products derived from waste/waste)
- Scope of raw material certification (relevant statements must be applied)
- Quantity of sustainable product delivered in metric tons or m³ at 15°C or MWh (for biogas/biomethane)
- Declaration(ions) “According to ISCC” and/or “According to EU RED”
- For biogas supply chains: Declaration whether incentives/subsidies were received for the production of biogas and, in affirmative case, specification of the type of support scheme
GHG emissions information
- Declaration: “Using the full default value”, OR
- Declaration that disaggregated default values are used. In this case, the statement “Use the disaggregated default value for (respective calculation formula elements)” must be done in the Sustainability Declaration Guide. Additional specifications must be made, be relevant:
- Process technology, for example. for a palm oil factory, the following statement could be made: “Use of the disaggregated default value for processing (process with methane capture in the mill”).
- If the default disaggregated value does not cover the entire element path (for example, for a sunflower oil refinery, the following statement could be made “Use of disaggregated default value (VAT) only for oil extraction”), AND/OR
- Declaration of an actual value in kg CO2eq per dry ton of product. If applicable, for raw materials and intermediate products, information on GHG emissions must be provided in the unit kg CO2eq/dry ton of raw material or kg CO2eq/dry ton of intermediate product, respectively.
- for etd (transport and distribution), the means of transport and the transport distance from supplier to recipient must be included in the Sustainability Declaration
Self-declaration
Self-declaration is an important document to ensure traceability of sustainable material to the farm/plantation or point of origin. When signing the self-declaration, a farm/plantation or point of origin declares compliance with all legal obligations and relevant ISCC requirements, confirms the type of raw material supplied as sustainable and confirms that it will provide access to the facility to external auditors to verify compliance with ISCC requirements.
- The self-declaration is completed and signed for each delivery of sustainable material
- Self-declaration is used for all deliveries within a contract between the first collection point and the farm/plantation or collection point and point of origin respectively
- The content of the self-declaration is transferred in exactly the same words to the contract between the first collection point and the farm/plantation or the collection point and the point of origin, respectively
Small Producers – Identification of Farms/Plantations
The ISCC EU System Document 201 “System Basics” defines farms or plantations as “agricultural operations where crops are grown sustainably, or where agricultural crop residues from sustainable cultivation occur.”. A farm or plantation is defined as a distinct legal entity that has control over compliance with ISCC requirements. The entire land area (agricultural lands, pastures, forests, any other lands) from the farm or plantation, including any owned land, leased or leased, is subject to certification.
A clear understanding of how to identify a single exploit is crucial for ISCC certification. Identification of agricultural holdings is a precondition for audit preparation and audits at first meeting points (FGP) and central offices (CO) for agricultural holdings/plantations and has an important impact on auditing. For example, determines who must sign the self-declaration, the total number of group members and, thus, impacts sample size, risk management and exclusion of farms in case of non-compliance or violation of ISCC principles. Experience has demonstrated that, in practice, the definition of exploitation according to the ISCC EU System Document 201 is applicable and unambiguous in most cases.
To apply the ISCC standard, it is essential to correctly identify the farm or plantation. The expression farm or plantation can cover individual properties, subcontracted producers, small landowners, etc., provided that the definition of farm or plantation, as shown below, be applicable. The main indicators for identifying an agricultural holding are legal status and independent management. Identifying a farm is simple if it is legally independent and has its own independent management. However, in certain cases, both indicators can point in opposite directions, especially when small producer structures are involved.
Legal status and management are the main indicators for identifying an agricultural production entity as an agricultural holding. The following categories will form the basis for identifying a farm or plantation:
- Small independent owners
A small independent producer responsible for its own management and without management support from any larger company is considered an independent legal entity with management independence.. These small independent farmers need to sign the ISCC self-declaration for farms and plantations. The collection point of an independent small producer company is considered the first meeting point within the scope of ISCC. If the small independent farmer delivers directly to a collection point or mill, these are considered the first collection point.
- Independent legal entity and independent management
If the entity, with all its own and leased land that are subject to categorization, is an independent legal entity with its own independent management, identification is simple. The entity must be identified as a single farm or plantation, regardless of the size of the entity (this also applies to the small independent producers mentioned above). Farm management must sign the ISCC self-declaration for farms and plantations. The farm can be certified individually or certified as part of a group organized by a central office or a first meeting point.
- Leased land with centralized management
Landowners who lease land to a company responsible for managing the land are not considered a farm or plantation. These owners own the land, But the management of the land is not in your hands. The land is mostly leased and managed centrally by a company that brings together many small landowners. In this case, This company could be certified individually as a farm or plantation or certified as part of a group organized by a central office or a first meeting point. The management company, but not any of the small individual farmers, would sign a self-declaration for the whole earth.
- Partially centralized management
Cases two and three described above can also occur in subcategories with regard to the management indicator.
In case two (independent legal entity and independent management), parts of management could be centrally organized (for example, storage of plant protection products). In this case, the respective entity would still be considered a farm/plantation. Nonetheless, areas that are centrally managed would also need to be centrally audited.
In case three (centrally managed leased land), It may happen that a company has leased land to different owners, but the land is still partially managed by the owners. In this case, all land leased by the company could be considered as a farm or plantation. Nonetheless, These areas with decentralized management would also need to be audited as decentralized. If there were no compliances detected in areas with decentralized management, the entire farm or plantation would be excluded. (including all leased land).
Allocation of Sustainability Characteristics for batches of material output
Below are described different scenarios that demonstrate how sustainability characteristics can be allocated to output batches, that is, such as sustainability statements (SD) can be issued. For any scenarios, mass balances must be maintained based on the requirements described.
- Scenario 1: Different raw materials are kept physically separate
• Example: Rapeseed and soybean storage on site in different silos (no physical mixing)
• Sustainability statement: The product declared in the SD refers to the material actually delivered (that is, rapeseed delivery -> Rapeseed declared as raw material in SD)
• It is not possible to deliver rapeseed with an SD declaring soybeans as raw material (and viceversa)
- Scenario 2: Intermediate products (same product group) are kept physically separate
• Example: Storage of refined rapeseed oil and refined soybean oil on site, but in different tanks (no physical mixing)
• Sustainability statement: The product declared in the SD refers to the product actually delivered (for example, delivery of rapeseed oil -> Rapeseed declared as raw material in SD)
• It is not possible to deliver rapeseed oil with an SD declaring soy as raw material (and viceversa)
- Scenario 3: Physical mixing of different intermediate materials (same product group)
• Example: Storage of refined rapeseed oil and refined soybean oil on site, refined oils are mixed in tanks
• Declaration of Sustainability: SDs separados devem ser emitidos para refletir participação de diferentes materiais no mix -> Entrega de 100mt de óleo refinado (mix of 50 million tons of rapeseed oil and 50 million tons of soybean oil: One SD issued for 50mt with rapeseed as raw material, and a SD issued for 50mt with soybeans as raw material
- Scenario 4.1: Different biofuels (same product group) coming from raw materials with different certification scopes are kept physically separated
• Example: UCO biodiesel storage (UCOME) and rapeseed biodiesel (RME) no local, but in different tanks (no physical mixing)
• Sustainability statement: The product declared in the SD actually refers to delivered material (for example, UCOME delivery -> OAU declared as raw material in SD)
• No allocation of sustainability characteristics between biofuels with different scope of raw material certification, that is, it is not possible to deliver RME with an SD declaring OAU as raw material and vice versa
Disclaimer: Implementation of any of the options in this scenario must be an EC requirement for all SV:
- Scenario 4.2: Different biofuels (same product group) coming from raw materials with the same scope of certification are kept physically separate.
• Example: Rapeseed biodiesel storage (RME) e biodiesel da soja (SME) no local, but in different tanks (no physical mixing)
Option 1: No breakdown between biofuels:
• Sustainability statement: The product declared in the SD refers to the material actually delivered (for example, RME delivery -> Rapeseed declared as raw material in SD)
• No allocation of sustainability characteristics among biofuels, that is, it is not possible to deliver RME with an SD declaring soy as a material raw material
Option 2: Possible breakdown between biofuels
• Sustainability statement: The product declared in the SD does not necessarily reflect the material actually delivered (for example, RME delivery -> Soy declared as raw material in SD)
• Flexible allocation of sustainability characteristics between biofuels with the same feedstock certification scope would be permitted
Disclaimer: Implementation of any of the options in this scenario must be an EC requirement for all SV:
- Scenario 5: Physical mixing of different biofuels (same product group).
• Example: 600mt RME storage, 600mt SME e 600mt UCOME em local, biofuels are physically mixed in a tank (for example, 1.800 tons of FAME 0)
Option 1: SD separated to reflect the percentage of biofuels in the mix
• Sustainability statement: Three separate SDs must be issued to reflect the share of biofuels in the mix -> Delivery 600 million tons of tank FAME: An SD issued to 200 million tons of biodiesel with rapeseed as raw material, an SD for 200 million tons with soy as raw material, an SD for 200 million tons with UCO as raw material
Option 2: Possible flexible assignment of sustainability characteristics between biofuels
• Sustainability statement: The participation of biofuels in the mix does not need to be reflected in the SDs -> Example: Delivery of 600mt FAME tank: SD can be issued for 600mt of biodiesel with rapeseed as raw material, OU SD can be issued for 600mt of biodiesel with soy as per ISCC EU 203 TRACEABILITY AND CHAIN OF CUSTODY raw material, OU SD can be issued for 600mt of biodiesel with UCO as raw material
Disclaimer: Implementation of this scenario should be a CE requirement for all VS:
- Scenario 6: Mixing biofuels with fossil fuels (for example, B7 or E10)
• Example: E10 with a share of up to 10% (100 millions of tons) of corn ethanol in a mixture of 1.000 tons of gasoline mixture
• Declaration of Sustainability: An SD is only issued for the amount of bio-based and sustainable material that is in the mix. A transfer of sustainability characteristics from a bio-based product to a fossil-free product
• Example: Delivery 1.000 tons of E10: SD can be output for up to 100 tons of ethanol with corn as raw material
- Scenario 7: Mixing biomethane and natural gas in the network (chemically and physically identical products)
• Example: Biomethane injection into the gas network
• Sustainability statement: An SD is only issued for the amount of sustainable biomethane that is fed into the grid. Product indicated in sustainability declaration (SD) does not reflect the material that is removed from the grid. A sustainability declaration can be issued for any shipment taken from the grid if the equivalent amount of biomethane was fed into the grid
- Scenario 8: Coprocessing (simultaneous processing of bio-based and fossil products, chemically and physically identical products)
• Example: Vegetable oil coprocessing (for example, rapeseed oil and soybean oil) and fossil diesel. The fuel derived from this process cannot be differentiated into fossil and bio-based fuels
• Declaration of Sustainability: An SD is only issued for the sustainable bioproduction value attributed to the production. Product indicated in the SD does not reflect the product actually delivered. The sustainability declaration can be issued for any shipment coming outside of the co-processing facility
Discover more publications about ISCC EU 203:
ISCC System – Sustainable Supply Chains – biO3 (bio3consultoria.com.br)
See the original post:
ISCC_EU_203_Traceability_and_Chain-of-Custody-v4.0.pdf (iscc-system.org)