Governmental use of sustainability standards: examples & lessons from the UK RTFO

1. Governmental use of sustainability standards: examples & lessons from the UK RTFO ISEAL conference, Zurich, 8 June 2011 Dr Keeley Bignal - Sustainability Technical Guidance Specialist RTFO Unit, Low Carbon Fuels, UK Department for Transport

2. Overview • UK biofuel policy • C&S reporting • RTFO Biofuel Sustainability Meta-standard • Benchmarks of sustainability schemes against the Meta-standard • Benchmarks against the RED carbon stock and biodiversity criteria • Uptake of standards by suppliers of biofuel to the UK • Lessons learnt

3. UK biofuels policy: the Road Transport Fuel Obligation • Introduced in 2008 • Duty point obligation • 2.5% biofuel volume rising to 5% 2013 • Tradable certificates & buy-out option (30ppl) • Carbon & sustainability reporting

4. Carbon & sustainability reporting scope

5. Carbon & sustainability reporting overview • To claim RTFCs C&S reports must be supplied • C&S data must be independently verified • Annual targets for company performance (no penalty for failing to achieve)

6. C&S reporting - the 'RED-ready' approach • RTFO C&S reporting adapted to be as consistent as possible with the EC requirements from the start of the third year of the RTFO on 15 April 2010 • Aim to help UK industry best prepare for the RED • Aim to be transparent about which batches of fuel are indicatively RED-ready • RTFO continues to require C&S reporting rather than mandatory minimum performance until RED implementation

7. Benchmarks of sustainability assurance schemes against the RTFO Meta-Standard

8. The norm for Qualifying Standards • Qualifying Environmental Standard: • Full compliance with all criteria referring to compliance with national legislation (2.1, 3.1, 4.1, 5.1); • On all principles one ‘partial compliance’ criterion is permitted per principle, with a maximum of three in total. • Qualifying Social Standard: • On principle 6, seven of the 11 criteria must be fully complied with; • On principle 7 on land right issues and community relations, one partial compliance is permitted.

9. The norm for audit quality

10. Benchmarks of sustainability schemes against the RTFO Meta-Standard Qualifying standards Not qualifying standards Not qualifying standards Qualifying standards

11. Indicative RED Benchmark

12. Key gaps & challenges • No operational sustainability schemes currently assess GHG savings – though some are in development • At time of RFA assessment only two schemes were strong enough on LUC to meet RED criteria on preservation of carbon stocks – some have now developed EU ‘add-on’ modules to cover this • Many key biofuel feedstocks are not covered by an operational sustainability scheme • Few cover the chain of custody – some are in development

13. Monthly reporting format – using sustainability standards to identify RED-readiness

14. Moving sustainability forward • RFA contacted standards bodies with recommendations - ‘simple’ updates in many cases to align with RED: • inclusion of reference date for LUC • aligning reference date with Jan 2008 • more explicit and specific on carbon conservation requirements • Several schemes are progressing quickly to cover key feedstocks – e.g. RTRS, BSI, ISCC, RSB • Several schemes are developing EU market access/ RED add-ons in response to market demand/regulatory framework • RTFO Meta-Standard can be used in absence of operational assurance schemes

15. Biofuels supplied under the RTFO† -performance against the targets Year One = 15 April 2008 – 14 April 2009 Year Two = 15 April 2009 – 14 April 2010 Year Three = 15 April 2010 - 14 April 2011

16. Environmental sustainability Year One Year Three Year Two

17. Environmental sustainability by company Company performance – Year One

18. Environmental sustainability by company Company performance – Year Two

19. Environmental sustainability by company Company performance – Year Three

20. 35% GHG savings Cross-compliance High carbon stock protection* Wetlands Peatlands Continuous forest High biodiversity protection* Undisturbed primary forest Conservation areas Biodiverse grassland *Post Jan 2008 First 9 months of Yr 3 71% of biofuel met the 35% GHG saving threshold (may not have met all sustainability criteria e.g. unknown land use) 13% from unknown land use 49% met an environmental standard Key RED sustainability features RTFO data – are we ready for RED?

21. Lessons learnt • The standard must be fit for purpose e.g. a scheme may be designed for food safety but not for environmental sustainability • Engage the standard owner • Inform them of process and purpose of benchmarking • Ensure you have the latest (and all) documentation • Inform them of the results before finalising • Can work with the standard owners to drive sustainability • Consult with experts and stakeholders on benchmark results • Be realistic – set the ‘standard’ you are aiming for but recognise that there may be interim steps to get there • Get ‘buy-in’ from stakeholders – need the fuel suppliers and supply chain to provide the demand for sustainability schemes

22. Lessons learnt • Voluntary C&S reporting works • Uptake of sustainability schemes has increased over time • Providing public access to data has driven individual companies to improve performance • Voluntary reporting can provide a ‘stepping stone’ to mandatory sustainability