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RTFO Guidance Part 2 Renewable Transport Fuel Obligation Guidance Part Two Carbon and Sustainability 2020: 01/01/20 to 31/12/20 Moving Britain Ahead Version 2020, January 2020 The Department for Transport has actively considered the needs of blind and partially sighted people in accessing this document. The text will be made available in full on the Department’s website. The text may be freely downloaded and translated by individuals or organisations for conversion into other accessible formats. If you have other needs in this regard please contact the Department. Department for Transport Great Minster House 33 Horseferry Road London SW1P 4DR Telephone 0300 330 3000 General enquiries https://forms.dft.gov.uk Website www.gov.uk/dft Crown copyright 2020 Copyright in the typographical arrangement rests with the Crown. You may re-use this information (not including logos or third-party material) free of charge in any format or medium, under the terms of the Open Government Licence v3.0. To view this licence visit http://www.nationalarchives.gov.uk/doc/open-government- licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or e-mail: [email protected]. Where we have identified any third-party copyright information you will need to obtain permission from the copyright holders concerned. Contents Executive summary 7 The Renewable Transport Fuel Obligation 7 EU Renewable Energy Directive and Fuel Quality Directive 8 Greenhouse Gas Emissions Reporting Regulations 9 Reporting carbon and sustainability information 9 Applying for certificates 10 Annual reporting 10 Land use for biofuels 10 Greenhouse gas emissions 11 Chain of custody and mass balance 11 Use of voluntary schemes to demonstrate compliance 11 Reward for wastes, residues, dedicated energy crops and RFNBOs 12 Development fuel target 12 Verification 12 Annexes to this document 13 Brexit 13 1. Introduction 14 Legislative framework 14 Related resources 17 2. Reporting carbon and sustainability information 18 Introduction 18 Who should report C&S information to the RTFO Administrator 18 Reporting frequency and timetable 19 What to report 19 Filling in the C&S report 22 Arranging verification 32 Reporting biofuel that meets a voluntary scheme 32 Changing C&S data 33 Further guidance and resources 33 Publication of information 33 V 2020, January 2020 3 3. Annual reporting 34 4. Demonstrating compliance with the land criteria 35 Land requirements of the RED 35 Demonstrating compliance with the land criteria 36 Voluntary schemes 38 The RTFO Biofuel Sustainability Standard 39 The RTFO Biodiversity Audit 40 Land-use categories and RED compliance 40 Further guidance/resources 41 5. Demonstrating compliance with the Greenhouse Gas savings criteria 46 Terminology 46 GHG savings requirements of the RED 47 Demonstrating compliance with the GHG criteria 48 Assessing the carbon intensity of your biofuel 48 Reporting using the fuel chain default values 50 NUTS2 (Article 19(3)) 52 Assessing the carbon intensity of a RFNBO 53 Calculating the GHG saving of a renewable fuel 53 Aggregating consignments with different carbon intensities 54 6. Reporting actual Greenhouse Gas data and assessing land-use change impact 55 Calculating biofuel carbon intensity based on actual data 55 Calculating a RFNBO carbon intensity based on actual data 72 Calculating a GHG intensity of part RFNBO, part non-RFNBO fuels from actual data 75 Methodology for reporting land-use change emissions 75 7. Indirect Land Use Change value reporting 80 8. Demonstrating compliance with the mass balance rules 82 Guiding principles 82 Terminology 83 Aggregating multiple consignments 84 Which chain of custody systems are permitted for C&S reporting? 84 When to set up a chain of custody 85 Guidance for operating a mass balance type of chain of custody 85 9. Wastes, residues and dedicated energy crops 93 Summary 93 Definitions 94 V 2020, January 2020 4 Identifying which waste and residue materials are double rewarded 95 List of wastes, residues and dedicated energy crops 96 Categorisations under the RTFO 97 Demonstrating that a biofuel feedstock is a waste or residue 97 GHG emission calculations for wastes and residues 98 10. Demonstrating compliance: evidence requirements 99 Introduction 99 Evidence requirements for key C&S data 99 Evidence from audits within the supply chain 102 Transport evidence and contracts 103 Other evidence 105 11. Appointing a verifier 106 Roles and responsibilities 106 Assurance standards - ISAE 3000 107 Independence of verifiers and ethical requirements 108 Professional competencies and capability 108 Quality control 108 Preparing for verification 109 Annex A: Recognition of voluntary schemes 111 Recognition of voluntary schemes by the Commission 111 Recognition of voluntary schemes by the RTFO Administrator 114 Annex B: Recognition of other Member States' national systems 116 Introduction 116 Identification of other Member States' national systems 117 National systems assessed by the RTFO Administrator 118 Annex C: Biofuel Sustainability Standard criteria and indicators 119 Environmental criteria and indicators 119 Social criteria and indicators 123 RTFO norm for audit quality criteria 125 Additional field guidance for auditors 126 Annex D: Biodiversity Audit 127 Annex E: Known future updates to carbon and sustainability reporting 129 Outcomes of Comitology process 129 Information to be published by the Commission 130 Information published by the RTFO Administrator 130 Annex F: Example chain of custody records 131 V 2020, January 2020 5 Annex G: Glossary 141 V 2020, January 2020 6 Executive summary This guidance document aims to provide assistance on carbon and sustainability (C&S) reporting under the Renewable Transport Fuel Obligations Order 2007 No. 3072 ('the RTFO Order'), as amended. It sets out the sustainability criteria for biofuels and renewable fuels of non-biological origin (RFNBOs) supplied under the RTFO and how to demonstrate compliance. Throughout this document, we refer to biofuels and RFNBOs as renewable fuels. Where there are specific provisions for RFNBOs or partially renewable fuels these have been highlighted. The following summary provides an overview of the contents of this guidance and key issues. The Renewable Transport Fuel Obligation The RTFO is one of Government's main policies for reducing greenhouse gas (GHG) emissions from road transport. The RTFO commenced on 15 April 2008 and is intended to deliver reductions in GHG emissions from the road transport sector by encouraging the supply of renewable fuels. It was amended from 15 December 2011 to implement the transport elements of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources (the 'Renewable Energy Directive' (RED)). Under the RTFO, those supplying renewable fuels must meet specified sustainability criteria for their fuels to be recognised as fuels entitled to receive Renewable Transport Fuel Certificates (RTFCs). Obligated fuel suppliers are required to redeem a number of RTFCs in proportion to the volume of fossil fuel and unsustainable renewable fuels they supply. RTFCs may be earned by any company supplying sustainable renewable fuels. They may also be bought or sold on an open market. Obligated suppliers also have the option to 'buy out' their obligation, paying a fixed fee per litre of renewable fuel that they would otherwise have had to supply. From April 2013, the RTFO includes gas oil and renewable fuels used in non-road 1 mobile machinery (NRMM). It included a consequential change to the target to ensure that the volume of renewable fuel required under the RTFO remained the same. The RTFO Order was further amended from 15 April 2015, including to increase the reward for certain renewable gaseous transport fuels, to align the treatment of hydro treated vegetable oil (HVO) and fatty-acid-methyl-ester (FAME), and to clarify the approach to rounding of RTFCs and fuel volumes. 1 The changes include renewable fuel and liquid fuel used in non-road mobile machinery, agricultural and forestry tractors, inland waterway vessel and recreational craft when not at sea. These end uses are collectively termed 'NRMM'. V 2020, January 2020 7 From April 2018 the RTFO Order is further amended to implement elements of 2 Directive 2015/1513 (known as the 'Indirect Land Use Change (ILUC) Directive'), which amends the RED. These elements include: updated GHG savings thresholds for renewable fuels; a requirement for Member States to report on ILUC values for land-based (crop) biofuels; and introduction of definitions for wastes and residues. A definition for dedicated energy crops is also provided. The amended RED also sets a maximum on the amount of crop-derived biofuels which may be counted towards renewable transport targets and recommends the introduction of a specific target for advanced biofuels. A crop cap has been introduced for Year 11 of the RTFO (from 15 April 2018) and a target for a specific sub-set of advanced fuels termed 'development fuels' has been introduced in 2019 of the RTFO (from 1 January 2019). Development fuels supplied during Year 11 will be rewarded with development fuel RTFCs, which can be carried over into 2019. In addition, renewable fuel volume targets are set out to 2032 and beyond, and several new fuel types are made eligible for support under the RTFO including aviation fuel, hydrogen and other RFNBOs. Key features of the RTFO • Mandatory sustainability criteria have to be met for renewable fuels to be issued with RTFCs and count towards meeting suppliers' obligations. • Renewable fuel that does not meet these sustainability criteria will be counted as fossil fuel and accrue an obligation to supply sustainable biofuel, in the same manner as any other fossil fuel. • Biofuels from certain wastes or residues, plus dedicated energy crops and RFNBOs, are double rewarded. These fuels receive twice as many RTFCs as biofuel from feedstocks eligible for single reward. • From 15 April 2018, crop-derived biofuels are allowed to meet the obligation up to a maximum limit.
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