Sustainability Criteria and the Carbon Calculator

1. Sustainability Criteria and the Carbon Calculator ADBA Crop Operators group, 20 March 2014

2. Sustainability criteria: key points

3. Sustainability criteria: GHG limits • Criteria • 60% saving on fossil criteria: EU heat or electricity carbon intensity • RHI: 125.28kg CO2 eq per MWh • RO: 285kg CO2 eq per MWh (to 2020) • All consignments of feedstock must meet these limits • Demonstrating compliance • Operator can choose how to demonstrate compliance, either using calculator or own models • Ofgem provides the ‘Solid and Gaseous Biomass Carbon Calculator’ as a tool for operators • Includes default values but gives opportunity to edit these for individual sites • If using own model this must follow the methodology government sets out and use the standard emission and conversion factors • Audits required above 1MW (for the RO, tbc for RHI)

4. Sustainability criteria: land use • Corresponds to the land criteria set out in the EU Renewable Energy Directive for transport biofuels and bioliquids • Biomass cannot be sourced from land which at any time since January 2008: • was primary forest, or a continually or lightly forested area • was land designated for nature protection purposes (unless production of that biomaterial did not interfere with purposes for which this land was designated) • was peatland (unless this did not involve the drainage of undrained soil) • was wetland (unless that land is still a wetland). • Where land use is changed in a permitted way, a carbon stock calculation resulting from the land-use change will need to be performed • Operator will need to consider which category land has fallen in since 2008, and provide some form of evidence on this

5. Sustainability criteria: future • RO • Grandfathered for individual sites from point of accreditation • RO shuts to new projects from 2017 • RHI • Not grandfathered for individual projects, as was originally intended • DECC will review criteria every three years, so criteria could be changed in 2017 for implementation in 2018 • DECC ‘expect changes to be incremental’ unless new EU legislation forces further changes • we believe this will cause too much uncertainty for developers • and have asked DECC to reconsider • FIT • Sustainability criteria likely to be considered again in 2015 review

6. Sustainability criteria: guidance • Renewables Obligation • Draft guidance published in early 2014 • ADBA responded on several points • Final guidance due to be published by April • Renewable Heat Incentive • Limited information in main Ofgem RHI guidance • Would expect this to be developed as criteria come in • Likely to follow similar structure as RO

7. Biomass Carbon Calculator • Background • Developed by E4tech on behalf of DECC to help demonstrate compliance with sustainability criteria • Available for operators to download from the Ofgem website • How it works • Operator creates pathways for different feedstocks • Default values available; operator can vary these but will need to provide evidence e.g. for lower fertiliser use or transport emissions • Default values tend to be conservative, partly to encourage reporting of actual figures

8. Biomass Carbon Calculator https://www.ofgem.gov.uk/publications-and-updates/uk-solid-and-gaseous-biomass-carbon-calculator

9. Biomass Carbon Calculator • Revision process • First stage of revisions (for woody biomass) coming to end • DECC allocating resources to update biogas and include RHI technologies such as biomethane • Process underway to conclude over next few months • ADBA working with DECC and E4Tech to resolve these issues • Our key issues • Clarifying the approach for apportioning emissions to different feedstocks within the ‘consignment’ • Providing a more accurate figure for fugitive methane emissions, and clear guidance on how operators can vary this. • A clear approach for apportioning emissions to digestate as a co-product • Allowing a wider selection of potential feedstocks

10. Indirect Land Use Change • Current approach • Emissions from ILUC not generally considered at present • Pressure from NGOs and others to include • DECC work (BEaC Calculator) underway • Future • Expect it to be included at some point • Could have a serious impact on reported GHG emissions for bioenergy • Approach for AD very unclear – DECC have recognised issues are different to those for other forms of bioenergy following input/meetings • 2017 UK Bioenergy Strategy review could consider this further