of bioenergy and actions

Transcription

1 SustainabILITY of bioenergy Fortum s POSITION and actions

2 The key opinions and actions in the sustainable utilisation of bioenergy at Fortum are presented below. The guidelines contribute to Fortum s Sustainability Policy, Environmental Guiding Principles and Purchasing Guidelines with a focus on the responsible use of natural resources and the responsible management of fuel sourcing and supplies. 2

3 fortum s position 1 The use of bioenergy shall be sustainable and traceable. Fortum recognises the need to manage economic, social, environmental and reputational risks related to bioenergy purchasing and use. Fortum is of the opinion that all types of bioenergy solid as well as liquid and gaseous shall be ecologically, socially and economically sustainable when it is purchased and used for energy production. Responsible supply chain management for fuels and transparent reporting on the origin and use of bioenergy are the key tools in ensuring sustainability and traceability. 2 Sustainability criteria should apply to the origin of all bioenergy. There is an increasing demand for bioenergy for different end-use purposes. Bioenergy is also being traded to a larger extent worldwide. For these reasons, there is a clear need to define the sustainable use of all biomass. As the use of bioenergy is determined in the bioenergy market, sustainability criteria should apply to the origin of bioenergy, irrespective of whether it is being used in industry, energy production or as traffic fuel. Fortum considers the following sustainability aspects as key priorities related to bioenergy for energy production Environmental quality and biodiversity Production, processing and consumption of biomass shall not have a negative impact on the environment (air, water, soil). Biomass production shall not take place in areas with high biodiversity value. Illegal logging Illegal logging and international trading in illegally logged timber is a major problem for many timberproducing countries in the developing world. It causes environmental damage, results in lost revenue, promotes corruption and undermines the rule of law and good governance. It hampers sustainable development in some of the poorest countries in the world. It shall be ensured that purchased wood and wood products are legally logged and sourced. Efficiency of the resource use Biomass can be processed and converted to energy at very different efficiency levels in different applications. Fuel efficiency must be the criterion steering the use of biomass between the different energy uses. The emphasis must be put on the forms of biomass-based energy that have the highest input-output ratio and the biggest greenhouse-gas emissions savings. In our opinion, biomass is used most efficiently in combined heat and power production (CHP), where the useful heat is delivered through district heating or for industrial use. Climate impacts The greenhouse gas balance of the production and supply chain and use of biomass shall result in real and measurable savings compared to reference fossil fuels. Biomass production shall not take place in areas with significant carbon reservoirs in the vegetation and soil. 3

4 Human rights and labour rights Human rights are basic standards aiming at dignity and equality for all. Business, as a major contributor to economic growth, has an essential role in the progress of human rights. Fortum s Supplier Code of Conduct defines the basic sustainability requirements, including human rights and labour rights, imposed on Fortum s suppliers. Living conditions of communities and people impacted by the production of bioenergy Bioenergy is being produced in various areas around the globe and often in areas with limited prospects for economic growth. The production of bioenergy shall be managed in such a way that it contributes to the social and economical well-being of the employees and the local population. Competition with food production and demand shall be avoided. Sourcing of bioenergy for energy purposes shall not endanger the security of supply for human food. Rights of indigenous people The unique economic and cultural needs of indigenous people shall be recognised and thus it shall be ensured that the bioenergy production does not undermine the rights of indigenous people. The legal rights and customary rights of the indigenous peoples to own, use and manage their lands, territories, and resources shall be recognised and respected. Land ownership In countries where the legislation regarding land ownership is weak and not monitored, there is a high risk of social conflicts. It shall be ensured that bioenergy production complies with national and local legislation and does not violate land rights. 3 Sustainability criteria are needed for solid biomass, too. Harmonised sustainability criteria would build confidence in and boost the development of an international market for bioenergy by guaranteeing access to sensitive markets, by reducing investor uncertainty and by helping in optimising the use of resources for various purposes. The current system of variable requirements of certification schemes and national/local sustainability schemes for biomass is confusing from the biomass supplier, user and investor point of view. However, the criteria for biofuels and bioliquids, as defined in the EU Renewable Energy Directive, cannot be applied to solid biomass as such. The criteria shall be established with consideration of the differences between the bioenergy sources. 4 Sustainability criteria should be legally binding. A biomass sustainability scheme should be legally binding, where only bioenergy that meets the sustainability criteria would count towards the national renewable energy targets laid down in the EU Renewable Energy Directive and would be eligible for financial support as specified in national support schemes. 5 The target should be global sustainability criteria, but, at minimum, common EU requirements. EU-wide standardisation (incl. sustainability criteria) for bioenergy is needed and important also for the opening and widening of the fuel market. It can also improve competition in the EU. A sustainability scheme should be introduced at least at the EU level to guarantee fair and equal treatment of the market players. Importing biomass from outside the EU is an issue that has to be a focus in the future; therefore, the ultimate goal should be an international scheme. 6 Sustainable forest management and generally recognised agricultural practices establish the basis for the sustainable production of biomass. Forestry is a well regulated sector and takes sustainability into account. The two major forest certification schemes, the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC), acknowledge the full range of the forest function: economic, social and environmental. The certification of forests can also be done using methods based on existing national legislation. Thus there is no need for overlapping schemes with forest certification. These should be embedded into the EU bioenergy sustainability scheme. 4

5 Fortum s actions to improve the traceability and sustainability of bioenergy In order to adhere to the guidelines presented, Fortum is taking the following actions to improve the traceability and sustainability of bioenergy: 5 > > Bioenergy traders and suppliers are requested to provide information on the origin of the bioenergy traded. This will enhance transparent reporting on the origin and use of bioenergy. > > Fortum s Supplier Code of Conduct is the basis for sustainable supply chain management and will be attached to major bioenergy purchasing contracts. > > The Fortum-wide supplier pre-selection process will be applied to bioenergy purchasing according to Fortum s purchasing principles, e.g. to all contracts over 50,000 euros. Bioenergy-specific questions will be added to the Supplier Questionnaire as an Appendix. > > Supplier audits are one way to monitor the compliance with the set criteria. Audits will be conducted by Fortum s own professionals or, if needed, by an independent third party. > > Fortum aims to certify its wood biomass supply chain and to increase the share of certified wood in the supply of wood from forestry in accordance with FSC, PEFC or corresponding global standards or national regulations. > > Fortum will continue active participation in the stakeholder dialogue on sustainable bioenergy. Fortum participates in several initiatives to drive improvements in sustainable bioenergy, e.g. Global Forest & Trade Network, Roundtable on Sustainable Palm Oil, and will consider joining new initiatives (e.g. FSC) when appropriate. > > Fortum aims to use primarily the by-products, residuals or waste products from forestry or other industries for energy purposes. Whenever bioenergy from sources applicable for human food purposes are being considered, a risk analysis will be carried out to assess any negative impact on the local food supply or land use. > > The origin of bioenergy (e.g. country of origin, certification degree of purchased bioenergy) will be monitored and reported in Fortum s sustainability reporting. Definitions: Bioenergy refers both to liquid and gaseous biofuels and solid biomass. Biomass refers to solid biomass from the forest, cultivated biomass and biodegradable fraction of waste.

6 DECEMBER 2011 Further information: Kari Kankaanpää Corporate Sustainability Tel