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Archive 2010

  • Biomass market in Ukraine and possibilities to export to the EU: Practical issues of certification requirements

    03.12.2010

    International conference titled “Biomass market in Ukraine: possibilities to export to the EU: practical issues of certification requirements” gathered experts, businesses and authorities to discuss potential challenges of the sustainability requirements and their impact on the development of the agricultural commodity markets on November 30, 2010 in Kyiv. Among highly debated topics discussed, the participants focused on the structure and work of several certification systems available for Ukrainian market players, development of renewable energy targets and legislative base in Germany, EU, and Ukraine, and the experiences of first certification projects.

    Opening speakers emphasized the importance of the sustainability requirements in the EU as  the destination of Ukrainian biomass, namely rapeseeds. Dr. Alex Lissitsa, president of Ukrainian Agribusiness Club, estimated the export flows of rapeseed from Ukraine to the EU to be 1.45 mln tons in 2011(nearly 600 mln USD) to increase further to around 1,8 mln tons (800 mln USD) . 2012. Yan Henke, the ISCC representative, asserted that maintaining high export flows of biomass in future would be severely hampered without sustainability certification which is likely to expand to cover food and technical use of biomass[1].

    In first section presentation, moderated by Dr. Heinz Strubenhoff, head of German-Ukrainian Policy Dialogue in Agriculture, Dr. Volker Sasse from the German Embassy to Ukraine outlined the ambitious but realistic energy targets till 2050, particularly 60% of renewable energy in final energy consumption and 80% of renewable electricity in final consumption of electricity. Together with the intention to increase the energy efficiency, these targets elicit significant investments (nearly 20 billion USD). Public discussions continue in Germany as to whether the society is prepared to allocate the funds needed for that purpose. In his words, Ukraine has developed sufficient legislation for promotion of bioenergy, underutilized its Kyoto quota and started preparing Low Carbon Strategy. Further efforts in this direction (binding consumption quotas or other support mechanisms) that entail additional costs could be hardly justified and may lead to structural distortions. In turn, Viktor Tymoshchuk from Ministry of Agricultural Policy of Ukraine and Hryhoriy Kaletnik from Agricultural Committee of Verkhovna Rada introduced Ukrainian strategy in bioenergy development stating the intention to develop consumption promotion undertakings to fully deploy bioenergy potential of the country and to decrease the dependency on imports of energy sources. The speakers informed the audience about several investment projects carried out in production of biogas, bioethanol and biodiesel and talked on the awareness and readiness of market participants to take full account of new sustainability requirements.

    Next presentations, devoted to certification processes, began with Yan Henke’s introduction of ISCC (International Sustainability and Carbon Certification), the global certification system designed to cover all types of biomass. The companies interested in certification should become a member of ISCC (currently the list of ISCC members consists of various stakeholders, including more than 190 biofuel-related companies in Europe, South Africa and Latin America, as well as food and FMCG producers, underlining the expectations of further coverage of other applications of biomass). The system undergone a two-year pilot phase all around the globe and is now operational, learning system based on the following principles: the whole supply chain is concerned; however, a certificate for a particular company is granted irrespectively of whether other upstream or downstream companies have proved the compliance with sustainability requirements. This facilitates the task for each particular operator in certification process. ISCC encompasses certification bodies accredited with competent German authority (BLE) that now granted certificates to around 80 companies (the list of these companies as well as the checklist of documents for each interface (farmers, first gathering points, conversion units) is available at the ISCC web-page http://www.iscc-system.org). Further discussants, Dr. Rayner Friedel from Peterson Control Union, Ludwig Striwe from Toepfer International and Andriy Lisenkov from AbCert AG disclosed the challenges they faced in first certification procedures in Ukraine: lack of easy-to-find and easy-to-comprehend documentation, low awareness and high rigidity of certain companies to undergo changes required to show sustainable production or trade with the mass balance system, shortage of entities with the expertise to advice the interested companies as to the peculiarities of the certification process.

    The discussion raised several important aspects of the present and the future of sustainable biomass trade:

    • from January 1, 2011 the requirements are enforced in Germany, but several certification system are now pending the recognition by the European commission including ISCC (with the first system approved in summer 2011 expectedly) that would harmonized the requirements across all EU member states (definition of first gathering point, biodiverse grassland and other ‘no go’ areas, etc.) Until that, different national procedure would hamper the trade and make the market malfunctioning ( Philipp Schukat, GTZ);    
    • certification is beneficial for the market participants as the price difference for certified and uncertified consignments exceed the costs of certification. By 2013 it seems that this difference vanish as no further uncertified products would allowed in the EU, however the price gain would still be relevant for Ukraine having other destinations for its export (Middle East);
    • it is theoretically possible for Ukrainian certifiers and individual auditors to become approved by competent authorities in the EU to certify Ukrainian farmers, however, interested companies should be prepared for tough competition in the market and have relevant experience, otherwise the costs of application may not be compensated by the gains from certification (Heinz Strubenhoff);
    • The major costs of certification are generated not from the certification itself (which is estimated to be 3000 EUR for a first gatherer that has an agreement with around 15 farm of 1000 ha each) but from the changes in ompany’s operation (documentation) when preparing for certification (Raymond Friedel).

     

    The concluding remarks by the participants also touched the question of social responsibility as a part of sustainability requirements as the audience understands the sustainability in a broader sense, also in terms of equal income distribution from land and the control of the balance of argo-chemical characteristics of the land by renters.

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    [1] As of today, sustainability requirements cover bioliquids (liquid fuels for electricity, heating and cooling) and biofuels (liquid or gaseous fuel for transport)

    Authors:  Kandul Serhiy
    Tags:  biomass, EU
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