UK approach to calculating biofuel carbon intensity Expert Meeting Fuel Life Cycle Analysis 17th July 2007, Brussels Greg Archer, Director, Low Carbon Vehicle Partnership

UK biofuel policy is principally designed to deliver GHG savings RTFO commences April 2008, requires suppliers of transport fuels to: Sell a given amount of renewable transport fuel each year (for which they will receive certificates); or Purchase certificates from another company; or Pay a “buy-out” price of 22c/l – duty differential of 45c/l retained From start - reporting of the carbon and sustainability (C&S) of biofuels From 2010 – proposed to link issuing of Renewable Transport Fuel Certificates to the carbon intensity of the biofuel From 2011 – proposed to issue certificates only to sustainable biofuels To encourage the supply of sustainable biofuels

UK Renewable Transport Fuel Certificates issued on receipt of a carbon and sustainability report Reports must be supplied on all fuels produced or imported to UK Confidential monthly reports on homogeneous batches Annual aggregate reports published by company Comparative reports of company performance published by Administrator Targets for company performance – but no penalties No exclusions of feedstock/fuel & “Not known” reports permissible Independent verification of reports & claims Annual company target 2008-2009 2009-2010 2010-2011 Percentage of feedstock meeting the ‘Qualifying’ Standard - 50% 80% GHG saving 40% 60% Data provision 35% 65% To receive RTFC must supply C&S report to Administrator Reports on individual batches of fuel entering or produced in the UK Supplied on confidential basis – monthly – by those supplying biofuels to the market – oil companies Oil companies will make providing info a contractural requirement Annual aggregate reports published by companies & Administrator CSR pressure – comparison of performance; in addition company target to set benchmark indicating level of performance expected by Gov Data GHG-saving Qualifying fuels BP / Shell invested heavily in corporate reputations – don’t want these damaged by biofuels – said only source fuels they can demonstrate have been produced sustainably. If you want to sell to these companies you need to demonstrate the biofuel is sustainable. Because new scheme, and we wish to avoid possible WTO challenge, no feedstock exclusions and not known reports permissible – target for data

Illustrative Monthly Sustainability Data Sheet Ref Fuel type Quantity of fuel (litres or kg) Biofuel Feed-stock Origin Sustainability Information Carbon Information Env. Stnd Social Stnd Land use in Nov 2005 Carbon intensity Impact of LUC Accur-acy level g CO2e / MJ 3303 Bioethanol 250,000 Sugar beet UK ACCS Mech Crop 45 4 3304 1,000,000 Sugar cane Brazil - 19 2 3305 500,000 N/K 72 3306 Biodiesel Oilseed rape Mech + RTFO 79 3308 Palm oil Malay-sia RSPO 49 3309 BioCH4 150,000 Dry manure By-product 36 3310 Bio-ETBE Wheat LEAF Mech + LEAF 12 Annual Reports should.. Be rigorous and independently verified Be publicly available Aggregate monthly data Describe activities to improve data capture and sustainability performance Administrator will also produce reports of comparative performance

UK Programme Jun – Sept 06 Oct- Dec Jan- May 07 Jun- Sept 07 Oct-Nov 07 Dec- Mar 14 Apr 08 1 Project set-up 2 Methodology development 3 Technical Guidance prepared 4 Stakeholder liaison 5 Guidance piloting & consultation 6 Guidance finalised & issued 7 Roll-out 9 Launch

Carbon Intensity calculation boundaries Feedstock transport Biofuel production Cultivation & harvest Waste material Alternative waste management Boundary for monthly carbon intensity calculation Direct land use Indirect Excludes minor sources, from: • Manufacture of machinery or equipment PFCs , HFCs , SF 6 Assessed ex post by RTFO Administrator

Calculation method (i) Detailed chains calculated for: Ethanol from: sugar cane, sugar beet, wheat and corn Ethanol converted to ETBE FAME biodiesel from: tallow, used cooking oil, palm oil, soy and rapeseed Biomethane from anaerobic digestion of MSW Flexible system of co-product allocation Substitution DDGS / WDGS Rape meal Soy meal Energy content For energy uses Market value Others

Calculation method (ii) Alternative Waste Management Default values set to zero Companies that can demonstrate alternative waste management may claim credits RTFO Administrator would have to approve a new waste Direct land-use changes (since Nov 05) Only applies to changes from forest or permanent grassland No account of alternative land-use for existing agricultural systems Land use in November 2005 Applies IPCC Tier 1 factors Option to use Tier II / III systems Indirect land-use change Calculated by Administrator Not part of company reporting Fossil fuel reference system Based upon Concawe/EUcar/JRC Chain of custody Mass-balance Data passed through supply chain with purchase invoices Independent annual audit

Tiered default values and real data used for calculations Conservative defaults Increasing information availability 0. Fuel defaults e.g. Ethanol only Somewhat Conservative defaults 1. Feedstock defaults e.g. Ethanol – Wheat Increased accuracy of calculation 2. Feedstock & Origin defaults e.g. Ethanol – UK, Wheat Typical defaults 3. Chain defaults e.g. Ethanol, - UK, Wheat, CHP 4. Chain calculation e.g Chain default + some actual data

Conclusions UK approach focused on maximising GHG savings from sustainable biofuels April 08 reporting of the carbon and sustainability (C&S) of biofuels From 2010 – proposed to link issuing of Renewable Transport Fuel Certificates to the carbon intensity of the biofuel From 2011 - exclusion of unsustainable fuels Carbon intensity calculation includes all significant direct emissions Flexible system of co-product allocation Effects of direct, but not indirect land-use change calculated Flexible data requirements – conservative, high level, default values Detailed chain calculations for a range of feedstock supplied to the UK Fossil reference system based upon Concawe data

Any Questions? The Low Carbon Vehicle Partnership +44 (0)20 7304 7040 secretariat@lowcvp.org.uk www.lowcvp.org.uk