Bioenergy Criteria under the Climate Bonds Standard
Non-Wood Feedstocks Background Paper

May 2019

May 2019

Acknowledgement
We would like to thank all members of the Bioenergy Technical Working Group and Industry
Working Group for their time and valuable expertise that helped shape these Criteria. A full list of all
TWG and IWG members can be found in Appendix 1 and on our website.

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Definitions
Bioenergy assets and projects: Assets and projects relating to the acquisition, installation and / ormanagement of bioenergy facilities, which might include: biofuel preparation and pre-treatment
facilities, bio-refinery facilities, electricity, heating and cooling facilities using biofuel/biomass. Plus,
assets and projects related to dedicated infrastructure and/or the production of dedicated components
for these facilities.
Bioenergy: Energy generated from the conversion of solid, liquid and gaseous products derived frombiomass.1
Biofuel: Liquid fuels derived from biomass. They include ethanol, a liquid produced from fermenting
any biomass type high in carbohydrates, and biodiesel, a diesel- equivalent processed fuel made fromboth vegetable oil and animal fats.2
Biogas: A mixture of methane (CH4) and carbon dioxide (CO2) used as fuel and produced by bacterial
degradation of organic matter or through gasification of biomass.3
Biomass: Any organic matter, i.e. biological material, available on a renewable basis. It includes
feedstock derived from animals or plants, such as wood and agricultural crops, and organic wastefrom municipal and industrial sources.4
Climate Bonds Initiative (CBI): An investor-focused not-for-profit organisation, promoting large-scale
investments that will deliver a global low carbon and climate resilient economy. The Initiative seeks
to develop mechanisms to better align the interests of investors, industry and government to catalyse
investments at a speed and scale sufficient to avoid dangerous climate change and cope withunavoidable climate change.
Green Bond: A Green Bond is one in which the proceeds are allocated to green projects and labelledaccordingly by the issuer. The vast majority of these green projects are focused on climate change
mitigation or adaptation, but there is a small share of the market, which also funds green, non-climate
projects, such as green spaces.
Certified Climate Bond: A green bond that is certified by the Climate Bonds Standard Board asmeeting the requirements of the Climate Bonds Standard, as attested through independent
verification.
Climate Bonds Standard (CBS): A screening tool for investors and governments that allows them toidentify green bonds where they can be confident that the funds are being used to deliver climatechange solutions. This may be through climate mitigation impact and/ or climate adaptation orresilience impact. The CBS is made up of two parts: the parent standard (Climate Bonds Standardv2.1) and a suite of sector specific eligibility Criteria. The parent standard covers the certification
process and pre- and post-issuance requirements for all certified bonds, regardless of the nature of
the capital projects. The sector-specific Criteria detail specific requirements for assets identified as
falling under that specific sector.
Climate Bonds Standard Board (CBSB): A board of independent members that collectively represents$34 trillion of assets under management. The CBSB is responsible for approving i) Revisions to the

1 IEA/FAO (2017). How 2 Guide for Bioenergy Roadmap Development and Implementation.
2 Ibid.
3 Ibid.
4 Ibid.

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Climate Bond Standard, including the adoption of additional sector Criteria, ii) Approved verifiers, andiii) Applications for Certification of a bond under the Climate Bonds Standard.
Climate Bond Certification: allows the issuer to use the Climate Bond Certification Mark in relation tothat bond. Climate Bond Certification is provided once the Climate Bonds Standard Board is satisfied
the bond conforms with the Climate Bonds Standard.
Technical Working Group (TWG): A group of key experts from academia, international agencies,
industry and NGOs convened by the Climate Bonds Initiative. The TWG develops Sector Criteria detailed technical criteria for the eligibility of projects and assets as well as guidance on the trackingof eligibility status during the term of the bond. Their draft recommendations are refined throughengagement with finance industry experts in convened Industry Working Groups and through public
consultation.
Industry Working Group (IWG): A group made up of potential green bond issuers, potential investors
in bioenergy related green bonds, financial intermediaries in the bond issuance process, and Climate
Bonds Standard approved verifiers who are responsible for assessing whether bonds meet theCriteria. The purpose of the IWG is to advise and review the Criteria being developed by the TWG,
testing the practicality of the Criteria for green bond market participants and providing
recommendations for further improvement.

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Table of Contents
Definitions........................................................................................................................................................... 3
Table of Content ................................................................................................................................................. 5
1. Introduction ................................................................................................................................................. 6
1.1
Funding the goals of the Paris Agreement.......................................................................................... 6
1.2
Green bonds are critical to mobilising the capital required ................................................................. 7
1.3
The Climate Bonds Initiative and the Climate Bonds Standard & Certification Scheme ..................... 7
1.4
Developing Bioenergy Criteria for bond certification ........................................................................... 8
1.5This document and supplementary information available ................................................................... 9
1.6
Revisions to these Criteria ................................................................................................................ 10
2. Sector Overview ....................................................................................................................................... 11
2.1
What is Bioenergy?........................................................................................................................... 11
2.1.1 Feedstock and products ............................................................................................................... 11
2.1.2 Conversion and final energy use .................................................................................................. 12
2.2
Bioenergy and Climate Change ........................................................................................................ 14
2.2.1 Current state of bioenergy and future projections ......................................................................... 14
2.2.2 The role of bioenergy in addressing climate change ..................................................................... 15
2.3
Low Carbon and Climate Resilient Bioenergy .................................................................................. 16
2.3.1 Greenhouse gas emissions from bioenergy.................................................................................. 16
2.3.2 Impact of bioenergy on resilience of the ecosystem to climate change ........................................ 17
2.3.3 Climate change impacts on bioenergy .......................................................................................... 18
3. Green bonds and bioenergy ..................................................................................................................... 19
4. Key considerations in the development of Bioenergy Criteria .................................................................. 19
4.1
Guiding principles for the Criteria...................................................................................................... 19
4.2
Scope of the Bioenergy Criteria ........................................................................................................ 20
4.2.1 Setting boundaries between the Bioenergy Criteria and Forestry/Agriculture Criteria .................. 20
4.2.2 Feedstock in scope ....................................................................................................................... 21
4.2.3 Uses of bioenergy in scope........................................................................................................... 22
4.2.4 Bioenergy assets in scope ............................................................................................................ 23
4.3
Mitigation Requirement ..................................................................................................................... 26
4.3.1 Scope of GHG emissions threshold: life cycle assessment .......................................................... 26
4.3.2 Methodology for GHG emissions calculation ................................................................................ 27
4.3.3 Principles for GHG emissions thresholds ..................................................................................... 28
4.3.4 GHG emissions thresholds for facilities producing biofuel/biomass Error! Bookmark not defined.
4.3.5 GHG emissions thresholds for electricity facilities using biofuel/biomass ..................................... 30
4.3.6 Requirements for heating/cooling, and co-generation facilities using biofuel/biomass ................. 34
4.3.7 Summary of GHG emissions thresholds ....................................................................................... 34
4.3.8 Implications of proposed GHG thresholds for input biomass/biofuel............................................. 35
4.3.9 Carbon debt .................................................................................... Error! Bookmark not defined.
4.3.10Indirect land use change (iLUC) ............................................................................................... 37
4.3.11
Material displacement effect ...................................................... Error! Bookmark not defined.
4.4
Adaptation and Resilience Requirement........................................................................................... 39
4.4.1 Framework for Criteria addressing Climate Adaptation and Resilience ........................................ 39
4.4.2 Requirement 1: Adaptation & Resilience checklist ........................................................................ 39
4.4.3 Requirement 2: Adherence to approved best practice standards ................................................. 42
4.4.4 Requirement 3: Addressing food security risks ............................................................................. 48
4.5
Reporting Requirement..................................................................................................................... 49
4.5.1 Reporting to demonstrate compliance with the Criteria ................................................................ 49
4.5.2 Additional reporting encouraged, but not mandatory for certification ............................................ 49
4.6
Updating the Criteria ......................................................................................................................... 50
5. Appendix................................................................................................................................................... 51
Appendix 1 Bioenergy Working Group Member ........................................................................................... 51
Appendix 2 Climate Bonds Standard & Certification Scheme ...................................................................... 53
Appendix 3 Areas to be considered for determining the robustness of best practice standards ................... 55
Appendix 4 Market Share of Various Voluntary Standards ........................................................................... 57
Appendix 5 Reasons for exclusion of other voluntary standards .................................................................. 58

May 2019

1. Introduction
1.1

Funding the goals of the Paris Agreement

The current trajectory of climate change, expected to lead to a global warming of 3.1-3.7°C by 21005
poses an enormous threat to the future of the world’s nations and economies. The effects of climatechange and the risks associated with a greater than 2ºC rise in global temperatures by the end of the
century are significant: rising sea levels, increased frequency and severity of hurricanes, droughts,
wildfires and typhoons, and changes in agricultural patterns and yields. Avoiding such catastrophic
climate change requires a dramatic reduction in global greenhouse gas emissions.
Meanwhile, the world is entering an age of unprecedented urbanisation and related infrastructuredevelopment. Global infrastructure investment is expected to amount to USD 90 trillion over the next
15 years, which is more than the entire current infrastructure stock.6
To ensure sustainable development and halt climate change, this infrastructure needs to be lowcarbon and resilient to climate change, without compromising the kind of economic growth needed to
improve the livelihoods and wellbeing of the world’s most vulnerable citizens. Ensuring that the
infrastructure built is low-carbon raises the annual investment needs by 3–4%.7 Climate adaptationneeds add another significant amount of investment, which is estimated at USD 280–500 billion perannum by 2050 for a 2ºC scenario.8
According to the Task Force on Climate-related Financial Disclosures, there are two broad channels
through which climate change can present risks to business activities and assets 9:
1. Physical risk: the risk of impacts from climate- and weather-related events, such as floods andstorms that damage property or disrupt supply chains and trade;
2. Transition risk: the financial risks that could result from the process of adjustment towards alower-carbon economy. These include sudden shifts in demand; legal risk due to parties who
have suffered loss or damage seeking compensation; and changes in policy favouring lower
carbon technologies.
All of these could prompt a reassessment of the value of a large range of assets as costs andopportunities become apparent, and widespread inadequate information on these risks could eventhreaten the stability of the financial system. Risks to financial stability will be minimised if the transition
begins early and follows a predictable path, thereby helping the market anticipate a smooth transition
to a 2ºC warming world.

5

According to Climate Tracker, under current policies we could expect 3.1-3.7ºC: http://climateactiontracker.org/global.html

6

New Climate Economy (2016). Better Growth, Better Climate.
New Climate Economy (2016). The Sustainable Infrastructure Imperative: Financing for Better Growth and Development.
8
UNEP (2016). The Adaptation Finance Gap Report.
7

TFCD’s ‘Recommendations of the Task Force on Climate-related Financial Disclosures’: https://www.fsb-tcfd.org/publications/finalrecommendations-report/
9

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1.2

Green bonds are critical to mobilising the capital required

Traditional sources of capital for infrastructure investment (governments and commercial banks) areinsufficient to meet capital requirement needs to 2030; institutional investors, particularly pension andsovereign wealth funds, are increasingly looked to as viable actors to fill these financing gaps.
Capital markets enable issuers to tap into large pools of private capital from institutional investors.
Bonds are appropriate investment vehicles for these investors as they are low-risk investments withlong-term maturities, making them a good fit with institutional investors’ liabilities (e.g. pensions to be
paid out in several decades).
Bond financing works well for low-carbon and climate-resilient infrastructure projects postconstruction, as bonds are often used as re-financing instruments. Across investors and financial
markets, different entities face different types and severities of risks related to climate change,depending on many factors including degree of long-term exposure, likelihood of negative climate
impacts, and ability to mitigate impacts or shift positions.
Labelled green bonds are bonds with proceeds used for green projects, mostly climate change
mitigation and/or adaptation projects, and labelled accordingly. The rapid growth of the labelled green
bond market has shown in practice that the bond markets provide a promising channel to financeclimate investments.
The green bond market can reward bond issuers and investors for sustainable investments that
accelerate progress toward a low carbon and climate resilient economy. Commonly used as longterm debt instruments, green bonds are issued by governments, companies, municipalities,
commercial and development banks to finance or re-finance assets or activities with environmental
benefits. Green bonds are in high demand and can help issuers attract new types of investors.
Green bonds are regular bonds with one distinguishing feature: proceeds are earmarked for projects
with environmental benefits, primarily climate change mitigation and adaptation. A green label is a
discovery mechanism for investors. It enables the identification of climate-aligned investments evenwith limited resources for due diligence. By doing so, a green bond label reduces friction in the markets
and facilitates growth in climate aligned-investments.
However, currently green bonds only account for less than 0.2% of all bonds issued globally, whereas
the global bond market stands at USD 100 trillion. The potential for scaling up is tremendous. The
market now needs to grow much bigger, and quickly.

1.3

The Climate Bonds Initiative and the Climate Bonds Standard & Certification Scheme

Activating the mainstream debt capital markets to finance and refinance climate-aligned projects andassets is critical to achieving international climate goals, and robust labelling of green bonds is a key
requirement for that mainstream participation. Confidence in the climate objectives and the use offunds of green bonds is fundamental to the credibility of the role they play in a low carbon and climate
resilient economy. Trust in the green label and transparency of the underlying assets are essential forthis market to reach scale; but investor capacity to assess green credentials is limited, especially inthe fast-paced bond market.

May 2019

Therefore, the Climate Bonds Initiative created the Climate Bonds Standard & Certification Scheme,
which aims to provide the green bond market with the trust and assurance that it needs to achieve
scale.
The Climate Bonds Standard & Certification Scheme is an easy-to-use tool for investors and issuers
to assist them in prioritising investments that truly contribute to addressing climate change. It is madeup of the overarching Climate Bonds Standard detailing management and reporting processes, anda set of Sector Criteria detailing the requirements assets must meet to be eligible for certification. The
Certification Scheme requires issuers to obtain independent verification, pre- and post-issuance, toensure the bond meets the requirements of the Climate Bonds Standard.
The goal of the Standard and Certification Scheme is to accelerate investment in a global transition
to a low-carbon economy in line with the goals of the Paris Agreement – that is, which limits warming
to a global average of no more than 2°C higher than pre-industrial levels, and ideally to no more than
1.5°C, and ensures investments are fit for purpose in a changing climate. Certified bonds are required
to be compatible with a highly carbon-constrained world by linking to assets and projects generating
little in the way of emissions. This is referred to as ‘low-carbon (or low-GHG) compatibility’ throughout
the document.
Other existing Sector Criteria cover Solar Energy, Wind Energy, Marine Renewable Energy,
Geothermal Power, Buildings, Transport, Water Infrastructure and Forestry. Additional sector Criteria
currently under development include Hydropower, Fisheries and Aquaculture, Agriculture, Waste
Management and Shipping.
The Climate Bonds Initiative is an investor-focused not-for-profit organisation whose goal is topromote large-scale investments through green bonds and other debt instruments to accelerate a
global transition to a low-carbon and climate-resilient economy aligned with the goals of the Paris
Agreement.
As part of this, it brings together in an international consultative process a wide range of investors,
issuers and key experts from academia, international institutions and Non-Governmental
Organisations (NGOs). These experts participate through a Technical Working Group (TWG) or an
Industry Working Group (IWG). The output of this process is a recommended set of scientificallyrobust and market-ready Sector Criteria, which are subject to public consultation before being
submitted to the Climate Bonds Standards Board for approval.

1.4

Developing Bioenergy Criteria for bond certification

The role of bioenergy in the transition to a low carbon and climate resilient economy depends on theextent to which its main advantages, disadvantages and competitors shape policy and commercial
uptake.
On the one hand, bioenergy might have a key role to play in achieving the goals of the Paris
Agreement for the following reasons;
1. Its flexibility as a potential generation technology as a well as a form of solid, liquid or gaseousfuel.

May 2019

2. The view that negative emissions technologies, including biomass with carbon capture andstorage (BECCS), may be required to keep global CO2 atmospheric concentrations within
acceptable limits.
3. It can play an important role in decarbonising transport sector by replacing fossil fuel, in particular
for long-haul modes including aviation and shipping.
However, at the same time, the following concerns have been raised regarding bioenergy:
1. Concerns, partially due to past mistakes in policy design, that biofuels can have adverse
environmental impacts through both land use change (LUC) and combustion, as well as requiring
energy to transport; and decreasing food security by competing with food production for land. The
issue of supply chain sustainability in particular has become a crucial one for biofuels.
2. The possibility that feedstocks may be vulnerable to physical climate risk, particularly drought, orthat its production may impact on the resilience of the ecosystems in which it is situated.
In summary then, Bioenergy has the potential to be a key mitigation technology and one which, if
done badly, can have no net positive impact, or even a negative impact. The Bioenergy Criteria will
provide a tool for bond issuers and investors to identify and finance bioenergy assets and projects
that deliver mitigation and adaptation benefits, and avoid adverse environmental impacts.
The list of Bioenergy TWG and IWG members who have participated in the development of these
Criteria is provided in Appendix 1. The process of developing Sector Criteria under the Climate Bonds
Standard is described in Appendix 2.

1.5This document and supplementary information available

This document supports the proposed Bioenergy Criteria. It captures the issues raised and discussed
by the TWG, as well as the arguments and evidence in support of the proposed Criteria.
Specifically, it offers an overview of the bioenergy sector, highlights opportunities for mitigation andadaptation, and outlines existing approaches on assessing them, as well as other environmental andsocial impacts, in the bioenergy sector. These issues have informed the development of the proposed
Criteria. Readers are referred to a separate Criteria Document for the criteria themselves.
Please note that while the discussions and this paper are based on the latest scientific evidence andinformed by the experts of the Bioenergy TWG, it must be recognised that there are key uncertainties.
The science on indirect impacts and lifecycle analysis for bioenergy in particular continues to evolve,
and our understanding of the sustainability challenges is also improving.
Supplementary information available in addition to this document include:
1. Bioenergy Criteria Brochure: a 2-page summary of the Bioenergy Criteria.
2. Bioenergy Criteria Document: the complete Criteria requirements.
3. Climate Bonds Standard V2.1: the umbrella document laying out the common requirements that
all Certified Climate Bonds need to meet, in addition to the sector-specific Criteria (V2.1 is themost recent update version).
4. Climate Bonds Standard & Certification Scheme Brochure: an overview of the purpose, context
and requirements of the Climate Bonds Standard & Certification Scheme.

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For more information on the Climate Bonds Initiative and the Climate Bond Standard & Certification
Scheme, see https://www.climatebonds.net/standards. For the documents listed above, see
https://www.climatebonds.net/standard/bioenergy

1.6

Revisions to these Criteria

These Criteria will be reviewed two years after launch, at which point the TWG will take stock ofissuances that arise in the early stages and any developments in improved methodologies and datathat can increase the climate integrity of future bond issuances. As a result, the Criteria are likely tobe refined over time, as more information becomes available. However, certification will not be
withdrawn retroactively from bonds certified under earlier versions of the Criteria.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

2. Sector Overview
2.1

What is Bioenergy?

Bioenergy is energy generated from solid, liquid and gaseous products derived from biomass, typicallywood, agricultural crops, and organic waste from municipal and industrial sources.10 While bioenergy
in the form of wood, dung and peat has been a key energy source for humanity for centuries, thisdocument refers only to modern commercial/industrial deployments for transport, industry, electricity,
etc. Figure 1 shows the main different bioenergy pathways from feedstock to final energy use.
Figure 1 – Bioenergy Pathways

Source: OECD/IEA (2017). Energy Technology Perspectives 2017: Catalysing Energy Technology Transformations.

2.1.1

Feedstock and products

A wide range of feedstock can be used to produce bioenergy, including oil crops, sugar and starch
crops, lignocellulosic biomass (wood, straw etc.), as well as municipal and agricultural wastes. Biofuel
feedstocks undergo a range of different processes to maximise economic viability and/or the efficiencyof energy conversion. The process involves two steps: fuel preparation and pre-treatment.
The fuel preparation process normally includes drying, size reduction, pelletisation or briquetting, andpyrolysis, improving the energy density and making feedstock easier to handle and transport. Pretreatment changes the chemical nature of the feedstock and produces intermediate products which
are more amenable to conversion. Processes include anaerobic digestion, thermochemicalliquefaction, pyrolysis and gasification.11

10 IEA/FAO (2017). How 2 Guide for Bioenergy Roadmap Development and Implementation.
11 Ibid.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

A variety of solid, liquid and gaseous products result from these processes. Liquid biofuels include
ethanol, produced from fermenting any biomass type high in carbohydrates, and biodiesel, a dieselequivalent processed fuel made from both vegetable oil and animal fats.12 Biogas refers to a mixtureof methane (CH4) and carbon dioxide (CO2) used as fuel and produced by bacterial degradation oforganic matter or through gasification of biomass.13 Solid biomass can be generated from a range ofsources including agricultural crops and residues (e.g. maize, wheat, straw, animal manure), forestry(e.g. logs, stumps, leaves and branches), wood-processing industries (bark, off-cuts, wood chips,
sawdust) and from organic waste (e.g. municipal solid waste and sewage sludge).14
2.1.2

Conversion and final energy use

After fuel preparation and pre-treatment, bioenergy products can be converted into final energy. Liquidbiofuel can be used directly in the transport sector, and the combustion of liquid biofuel, biogas andsolid biomass can generate heat and power.
Bioenergy for heating
Bioenergy can be used for cooking and space heating in buildings and industrial processes. Modern
bioenergy heating technologies include efficient systems for the combustion of wood logs, chips, andpallets; municipal solid waste incineration; and use of biogas. 15 Bioenergy heat can be used forindustrial applications such as in the pulp and paper sector, and cement production, as well as fordomestic and commercial heating. One of the best large-scale examples is the district heating system
in Sweden, where biomass provides 30% of the heat demand of Swedish buildings.16
Bioenergy for cooling
Instead of fossil fuel, which is dominating the cooling generation, biomass can be used as analternative energy source. In the cooling system, biomass can be burnt in a boiler, generating heat
for the absorption chillers to drive the cooling cycle. The cooling effect obtained can then be distributedby pipelines which are similar to the existing ones using fossil fuel as energy source. Biomass coolingsystems can be used for both industry and households such as small-to-medium scale industrial andcommercial facilities, multi-unit housing facilities, and strip malls. Biomass cooling systems are
currently being used in Europe.17
Bioenergy for electricity
Electricity can be generated from biomass in the same way as hydrocarbons through combustion andsteam turbines, either on its own or through co-firing with coal. Co-firing, or converting coal-fired power
plants to operate entirely on biomass, is the most cost-effective large-scale renewables options as it
only requires minor investment in biomass pre-treatment and feed-in systems within existing
infrastructure.18 CHP, or co-generation, which generates usable heat and electricity at the same time,
has high energy conversion efficiency ranging from 80% to 90% in the best cases.19

12 IEA/FAO (2017). How 2 Guide for Bioenergy Roadmap Development and Implementation.
13 Ibid.
14 European Commission (2010). Report from the Commission to the Council and the European Parliament onsustainability requirements for the use of solid and gaseous biomass sources in electricity, heating and cooling.
15 OECD/IEA (2017). Energy Technology Perspectives 2017: Catalysing Energy Technology Transformations.
16 Ericsson K. and Werner, S. (2016). ‘The introduction and expansion of biomass use in Swedish district heating
systems’, Biomass and Bioenergy 94 (November) 57-65.
17 Agricultural Utilisation Research Institute (2016). Biomass for Cooling System Technologies: A Feasibility Guide.
18 OECD/IEA (2017). Energy Technology Perspectives 2017: Catalysing Energy Technology Transformations.
19 IEA (2015). IEA Bioenergy Task 32 project: Techno-economic evaluation of selected decentralised CHP applications
based on biomass combustion with steam turbine and ORC processes.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

Bioenergy for transport
Bioethanol has been widely used in vehicles in a number of countries, mostly blended with petrol,
while the use of biofuels is increasingly mentioned as a viable option for reducing aviation andshipping emissions. However, liquid biofuels for transport have been most heavily associated with theenvironmental and social criticisms of bioenergy. This has increased the impetus to develop‘advanced’ or ‘second generation’ biofuels using agricultural wastes and ‘third generation’ biofuels
derived from algae.
Advanced biofuels are produced through biochemical or thermochemical processes. A biochemical
process converts lignocellulosic materials into sugars, which are then be converted into alcohols orhydrocarbon fuels. Thermal processes turn biomass to potential fuels and chemicals: for example,
syngas produced from biomass gasification can be converted into fuel and chemical products suchas methane and methanol which can be then transformed into bio-gasoline, or gasoline, diesel andaviation fuels.20
Biomass-based materials and products
Biomass-based materials and products for non-energy use (such as food and feed ingredients,
pharmaceuticals, chemicals, materials and minerals) can be generated through bio-refinery process
alongside bioenergy-based products for power, heat and biofuels.21 Bioenergy-and biofuel-based biorefineries are becoming more common and in these, heat, power and biofuels are the main products,
with both agricultural and process residues used to produce additional bio-based products.22
Box 1 – First-generation vs second-generation biofuels, and traditional vs modern
bioenergyFirst-generation biofuels (conventional biofuels) are primarily from food crops such as
grains, sugar beet and oil seeds. Second-generation biofuels (advanced biofuels) areproduced from feedstock from lignocellulosic materials include cereal straw, bagasse,
forest residues, and purpose-grown energy crops such as vegetative grasses and shortrotation forests. 23
Traditional bioenergy refers to using solid biomass such as wood, charcoal, agriculturalresidues and animal dung converted with basic techniques with very low conversion
efficiency (10% to 20%), such as a three-stone fire, for heating and cooking in the residential
sector. 24 It is often unsustainable, with inefficient combustion leading to harmful emissions
with serious health implications. 25 Modern bioenergy uses solids, liquids and gases as
secondary energy carriers to generate heat, electricity, combined heat and power (CHP) andtransport fuels for various sectors, which has higher conversion efficiency. 26

20 OECD/IEA (2017). Energy Technology Perspectives 2017: Catalysing Energy Technology Transformations.
21 Ibid.
22 Ibid.
23 IEA (2008). From 1st- to 2nd-Generation Biofuel Technologies: An overview of current industry and RD&D activities.
24 IEA/FAO (2017). How 2 Guide for Bioenergy Roadmap Development and Implementation.
25 IEA Bioenergy (2017). Technology Roadmap: Delivering Sustainable Bioenergy.
26 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

2.2

Bioenergy and Climate Change

2.2.1

Current state of bioenergy and future projections

Bioenergy already plays an important role in today’s energy system, representing 11% of global final
energy consumption in 2015.27
Traditional biomass for cooking and heating, still dominates the use of bioenergy (65%). The use of
biomass in industry is the next most important use (18%), with bioenergy for electricity, transport andspace heating following (see Figure 2).
Figure 2 – Bioenergy consumption in 2015

Source: http://www.iea.org/statistics/

Modern bioenergy (i.e. non-traditional biomass) for heating has been growing, and accounted for 70%
of renewable energy for heating in 2015. The provision of heat for industrial processes was the largest
end user (63%), followed by buildings (34%) and agriculture (3%). 28 It is expected that modern
biomass for heating will grow at 2% per year by 2021.29
Electricity from biomass has more than doubled since 2005, providing 2% of global electricity
generation. Different bioenergy production practices are linked to electricity generation in different
countries. For example, the UK relies heavily on importing wood pellets for large-scale power
generation; Sweden uses bioenergy for electricity via co-generation systems, bioelectricity production
for industry and district heating in Brazil is mainly from agriculture wastes.30 Globally, bioelectricity
production is expected to grow at an annual rate of 6%, reaching 670TWh per year by 2021.31
Liquid biofuels consumption has experienced exponential growth from 16 billion litres in 2000 to morethan 100 billion litres in 2011, stimulated by biofuels mandates and the introduction of flex-fuelvehicles in 2003. In 2015, biofuels accounted for 3% of all transport fuels (4% of road transport fuels)with bioethanol making up three-quarters of this, and the rest from biodiesel.32 The US and Brazil
dominate the production and consumption of liquid biofuels, with other producers including the EU,
Argentina and Indonesia. Further growth of both ethanol and biodiesel are expected. The productionof biofuel has slowed down with an average annual growth rate of 4% over 2010-16 due to economic

27 IEA (2017). Energy Technology Perspectives 2017.
28 IEA Bioenergy (2017). Technology Roadmap: Delivering Sustainable Bioenergy.
29 IEA (2017). Energy Technology Perspectives 2017.
30 Ibid.
31 www.iea.org/statistics/
32 IEA (2017). Energy Technology Perspectives 2017.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultationand structural challenges, and policy uncertainty in key markets. The global growth in conventional
biofuels output is expected to slow further still over the next five years.33
It is estimated that over 60 countries have enacted regulations and national plans on promoting theuse of bioenergy production and use. For example, the revised Renewable Energy Directive (RED II)
that come into force in December 2018 establishes an overall target of at least 32% renewable,
including bioenergy, in the final energy consumption in the EU by 2030, and sets up sustainability
criteria for bioenergy.34 Brazil plans to increase the share of sustainable biofuels in the energy mix toapproximately 18% by 2030, as indicated by its Nationally Determined Contribution (NDC).35
The EU, US and Brazil are the largest producers and consumers of biofuels. The US is also asignificant producer of wood pellets for heat and electricity production (most of this is however
consumed in the EU). Many of the issues described in this paper are linked to EU policy developments
which has largely driven the promotion of voluntary sustainability standards.
2.2.2

The role of bioenergy in addressing climate change

Given its potential for electricity, heating and transport sectors, IEA modelling suggests that an
expanded role of bioenergy is required for the transition to a low carbon economy, as a lower GHG
alternative to fossil fuel based energy. Its 2DS scenario (restricting global warming to 2 °C by 2100),
as set out in the 2017 Energy Technology Perspectives, suggests a rise in biomass consumption fromthe current level of 63EJ per annum to 145EJ in 2060 could be necessary.36 This includes37:•••

A contribution of 30% of all transport fuels by 2060 (30 EJ in 2060, 10 times today’s level), with aparticular contribution to aviation and shipping fuels;
Industrial heating using bioenergy increasing 2.5 times by 2060 compared to 2015
A contribution of biomass to electricity generation at around 7% compared with 4% today.

On these assumptions, bioenergy would provide about 18% of the total annual savings in GHG
emissions required by 2060 (5.7 GtCO2 out of 31 GtCO2), and would account for 17% of the
cumulative reduction in GHG emissions to 2060 (128 GtCO2 out of the total of 763 GtCO2).38
In scenarios aiming to go beyond the 2°C level, namely the IEA Beyond 2DS (B2DS), it is suggested
that bioenergy should provide 20% of additional annual emission saving required in 2060, contributing
20% of the cumulative GHG emissions reduction needed by 2060 (188 GtCO2 out of the total of 1,022
GtCO2). Bioenergy with carbon capture and storage (BECCS) is mentioned as important in B2DS,
providing annual emissions reductions of 4.9GtCO2 and cumulative emission reductions of 72GtCO2
by 2060.39

33 IEA Bioenergy (2017). Technology Roadmap: Delivering Sustainable Bioenergy.
34 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.328.01.0082.01.ENG&toc=OJ:L:2018:328:TOC
35

http://www4.unfccc.int/submissions/INDC/Published%20Documents/Brazil/1/BRAZIL%20iNDC%20english%20FINAL.pdf
36 Note that the IEA’s 2DS model is not a prediction, but an analysis of the energy system deployment pathway which isconsistent with at least a 50% chance of limiting the average global temperature increase to 2°C.
37 IEA Bioenergy (2017). Technology Roadmap: Delivering Sustainable Bioenergy.
38 Ibid.
39 Ibid.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

2.3

Low Carbon and Climate Resilient Bioenergy

Bioenergy can only play a role in helping meet the temperature rise limit agreed by the international
community if its applications are aligned with these aims. CO2 emissions are generated when biomass
is combusted and, if not done with care to replace the combusted stock, bioenergy assets/projects
can generate net GHG emissions. Likewise, high emissions can be generated where land with preexisting high carbon stocks is converted for feedstock cultivation, and/ or where feedstocks aretransported long distances from cultivation sites to bioenergy facilities, and/ or the production of
bioenergy leads to significant indirect land use change (iLUC) for the production of food and fibre.
Feedstock production can also impact on the resilience of ecosystems to climate change throughchanges to water quality, biodiversity and soil carbon, etc. And conversely, climate change can
influence the resource potential and cultivation of feedstocks through changes in temperature andwater availability.
For these reasons, bioenergy has faced a number of controversies over its potential environmental
and social impacts which the Bioenergy Criteria must address to be credible. These include:•••

The fact that an equivalent amount of new biomass must replace any biomass which is combusted
in order to retain carbon neutrality, and this can take time.
The unintended consequences of biofuel production in terms of direct and indirect land conversion(creating its own emissions) and ecological impacts.
Displacement of food production which has in the past been linked to food price volatility andsocial unrest.

These impacts and issues are discussed in more detail below.
2.3.1

Greenhouse gas emissions from bioenergy

Bioenergy assets and projects emit GHG emissions over various points in their lifecycle, from land
conversion, feedstock production, transport and distribution, and the energy or fuel production
process. Different feedstocks and conversion pathways will have significantly different GHG profiles.
For example, land use change can create GHG emissions in many ways, including use of fire to clear
land; land management practices affecting soil carbon stocks (such as peatland drainage); andpermanent conversion of land from higher to lower carbon content vegetation.40
More broadly, direct land use change (LUC) occurs when biomass for energy purposes replaces othercrops, pasture or forests; Indirect land use change (iLUC) describes a knock-on effect where biofuel
feedstock production results in the conversion of lands somewhere else in order to produce the crops
displaced by the biofuel feedstock.41 Quantification of GHG emissions from land use remains a key
uncertainty in lifecycle estimates.
Notwithstanding that uncertainty, lifecycle GHG emissions from bioenergy for electricity vary from 15
to 650 gCO2e/kWh (4.2 to 181 gCO2e/MJ) depending on feedstock42, where the majority of lifecycle
40 Ibid.
41 Edenhofer et al. (2014). Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to theFifth Assessment Report of the Intergovernmental Panel on Climate Change.
42 Amponsah et al. (2014). Greenhouse gas emissions from renewable energy sources: A review of lifecycle considerations.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

GHG emissions range from 16 and 74 gCO2e/kWh, i.e. 4.4 and 21gCO2e/MJ (excluding land userelated carbon stock changes and land management impacts).43

2.3.2

Impact of bioenergy on the resilience of the ecosystem to climate change

The production of bioenergy feedstock has impacts on surrounding ecosystems such as changes towater quality, biodiversity and soil. This may affect the resilience of these ecosystems to climatechange. For example, the conversion of natural ecosystems into bioenergy plantations (or changed
forest management) directly impacts wild biodiversity. Habitat and biodiversity loss may also occur
indirectly through land use change. Pesticide and nutrient loading can further impact aquatic
biodiversity.
Likewise, biofuel feedstock production can result in considerable soil impacts including soil carbon
oxidation, changed rates of soil erosion, and nutrient leaching.44 Like conventional agriculture andforestry systems, bioenergy can exacerbate soil and vegetation degradation associated withoverexploitation of forests, intensive crop cultivation and forest residue removal, and water overuse. 45
Using agricultural residues without proper management can lead to detrimental impacts on soilorganic matter through increased erosion, depending on management, yield, soil type and location.46
In particular, the production of certain feedstocks has been associated with environmental impacts
such as deforestation, biodiversity loss and net GHG emissions, and high levels of indirect land usechange (iLUC). For example, rising demand for palm oil has contributed to extensive deforestation inparts of Southeast Asia47 and palm oil plantations support significantly fewer species than the forest
they replace.48 Large areas of tropical forests and other ecosystems with high conservation values
have been cleared to make room for palm oil plantations. The clearing of forests has destroyed critical
habitat for many endangered species, including Asian rhinos, Asian elephants and tigers. Intensive
cultivation methods may also result in soil pollution, erosion and water contamination.
The subsequent processing of the feedstock into biofuels and electricity can increase chemical andthermal pollution loads from effluents and generate waste to aquatic systems.49 For example, smoke
pollution from burning of sugar-cane fields is leading to further acidification of the already poor tropicalsoils in Brazil.50 Water use during feedstock production, e.g. fermentation of ethanol will affect water
resources, and the emission of air pollutants from burning of biofuels potentially impacts water quality
mostly via precipitation.51
The table below from IPCC provides an overview of risks and impacts related to bioenergy feedstock
production.
Table 1 Emergent risks related to bioenergy feedstock production as a mitigation strategy

43 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.
44 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.
45 Koh, L.P., and J. Ghazoul (2008). Biofuels, biodiversity, and people: Understanding the conflicts and finding opportunities;

Robertson et al. (2008). Sustainable biofuels redux.
46 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.
47 UNEP (2008). UNEP Year Book 2008: an Overview of Our Changing Environment.
48 Fitzherbert et al. (2008). How will oil palm expansion affect biodiversity?
49 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.
50 Martinelli, L.A., and S. Filoso (2007). Polluting effects of Brazil’s sugar-ethanol industry.
51 http://www.wgbn.wisc.edu/conservation/ecological-and-environmental-impacts-bioenergy

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Issue

Issue description

Nature of emergent risk

Direct and/or indirect land
use change

Potential for increase ingreenhouse gas emissions

Mitigation benefit of biofuels
reduced or negated

Policies targeting only
fossil carbon

Biofuel cropping competes with
agricultural systems andecosystems for land and water

Mitigation benefit of policies
reduced; harmful interactions
with other key systems

Food/fuel competition for
land

Competition for land driving up foodpricesEmergent risk of food insecurity
due to mitigation-driven land
use change

Biofuel production affects
water resources

Competition for water affects
biodiversity and food cropping

Emergent risk of biodiversity
loss and food insecurity due tomitigation-driven water stress

Biofuel production affects
biodiversity

Competition for land reduces
natural forest and biodiversity

Emerging risk of biodiversity
loss due to mitigation-driven
land use change

Land conversion causes
air pollution

Potential for increased productionof tropospheric ozone frompalm/sugarcane- induced land usechangeEmergent risk of greenhousegas-mitigation-driven plant andhuman health damage causedby tropospheric ozone

Fertilizer application

Potential for increased emissions of
N2 O

Offsets some benefits of othermitigation measures

Invasive properties of
biofuel crops

Potential to become an invasive
species

Unintended consequences thatdamage agriculture and/or
biodiversity
Source: IPCC (2014). Climate Change 2014: Impacts, Adaptation, and Vulnerability.
2.3.3

Climate change impacts on bioenergy

Climate change continues to cause unprecedented changes in temperature, irradiation and soil
moisture, which impact on agricultural production including the cultivation of feedstocks/ biomass forbioenergy. Overall, the magnitude and pattern of climate change effects remain uncertain. Detrimental
impacts on productivity may occur in many important regions, though positive effects on plant growth,e.g. improved land productivity due to elevated atmospheric CO2 may also exist.52
As crop production is projected to mostly decline with warming of more than 2°C, particularly in thetropics, biomass for energy production could be similarly affected.53 Overall, the effects of climatechange on biomass technical potential are found to be smaller than the effects of management,
breeding and area planted, but they can be strong in specific regions54. Which regions will be mostaffected remains uncertain, but tropical regions are most likely to see the strongest negative impact.55

52 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.
53 Ibid.
54 German Advisory Council on Global Change (WBGU) (2009). World in Transition – Future Bioenergy and Sustainable

Land Use.
55 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.

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3. Green bonds and bioenergy
To achieve the 2°C global warming target, the IEA estimates that investment in bioenergy needs torise from current levels of around USD25 billion per year to USD60 billion per year by 2030, and toaround USD200 billion per year between 2050 and 2060. The total investment in bioenergy required
under 2DS is expected to reach USD 6.1trillion, with USD1.6trillion in bioelectricity and USD4.5 trillion
in transport biofuels production. The B2DS will require a further investment of USD1.7trillion inbioenergy.56
The USD93trillion global bond market has a huge potential to provide capital for bioenergy investment.
Green bond has proven to be a useful tool to mobilise debt capital market for climate change solutions.
The green bond market has been growing rapidly over the last three years with the global issuancetotalling USD155bn in 2017.
However, the rapid growth in the green bond market has been met with questions around theenvironmental claims of these bonds. In the absence of clear and widely accepted definitions andstandards around what is green, many investors have raised concerns about ‘greenwashing’, wherebond proceeds are allocated to assets that have little or uncertain environmental value. This can bothshake confidence in the market and hamper efforts to finance a transition to a low carbon economy.
The Climate Bonds Standard Bioenergy Criteria define what are low carbon and climate resilient
bioenergy assets and projects by setting up requirements of climate change mitigation and adaptation
impacts in the bioenergy sector. The Criteria provide guidance to the market on what types ofbioenergy projects should be included in the green bonds, and ensure the robust growth of the market.

4. Key considerations in the development of Bioenergy Criteria for the Climate
Bonds Standard
This document is not intended to provide a complete overview of the environmental impacts ofbioenergy production, but rather to set out the key areas that the proposed eligibility criteria should
address for qualifying bioenergy investments under the Climate Bonds Standard.

4.1

Guiding principles for the Criteria

The Climate Bond Standard needs to ensure that the bioenergy assets and projects included in
Certified Climate Bonds deliver on GHG mitigation potential and climate resilience benefits, in linewith best available scientific knowledge and compatible with the goals of the Paris Agreement. At thesame time, the Bioenergy Criteria need to be pragmatic and readily usable by stakeholders in themarket, to maximise engagement and use. High transaction costs run the risk of reducing uptake ofa Standard in the green bond market. Keeping the costs of assessment down while maintaining robust
implementation of the criteria is important. Table 2 sets out the principles guiding the development of
the Bioenergy Criteria to meet and balance on these two goals.
Table 2 Key principles for the design of a Climate Bond Standard Bioenergy Criteria
56 IEA Bioenergy (2017). Technology Roadmap: Delivering Sustainable Bioenergy.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

Principle

Requirement for the Criteria

Level of ambition

Compatible with meeting the objective of 2º or less temperature rise
above pre-industrial levels set by the Paris Agreement, and with a rapidtransition to a low carbon and climate resilient economy.

Robust system

Scientifically robust to maintain the credibility of the Climate Bond
Standard.

“Do not reinvent thewheel”

Harness existing robust, credible tools, methodologies, standards anddata to assess the low carbon and climate resilient credentials of any
technology, endorsed by multiple stakeholders where possible.

Level playing field

No discrimination against certain groups of producers (such as
smallholders) or geographies.

Multi-stakeholder
supportSupported by key stakeholders; those within the relevant industry, thefinancial community and broader civil society.

Continuous
improvement

Subject to an evolving development process with the aim of driving
continuous improvement and credibility in the green bond market.

4.2

Scope of the Bioenergy Criteria

4.2.1

Setting boundaries between the Bioenergy Criteria and Forestry/Agriculture Criteria

The Climate Bonds Standard uses the asset-based approach, that is, the decision of which Sector
Criteria to apply depends on what types of assets issuers have.
The production of bioenergy feedstock such as energy crops involves the use of land, i.e. the assetsof feedstock producers are the land they are using and associated machinery and infrastructure forthat cultivation. Therefore, the production of bioenergy feedstock using land will be covered under theForestry/Agriculture Criteria which apply to land use and land management including production offood, fodder, feed and fibre, etc.
Instead, these Bioenergy Criteria cover bioenergy assets including processing facilities converting
feedstock into biofuel/biomass, and conversion facilities converting biofuel/biomass into electricity andheat. Further information on this is given in the sub-sectors below.
It is noted, however, that the mitigation requirements in these Bioenergy Criteria (see Section 4.3 formore details) require bioenergy producers to conduct a life cycle assessment of the GHG emissions
in order to meet mitigation threshold. This assessment includes accounting for emissions associatedwith the production of those feedstocks. .
Figure 3 illustrates the boundary between Bioenergy Criteria and Forestry/Agriculture Criteria. Detailsof assets covered by the Bioenergy Criteria can be found in Section 4.2.
Figure 3. Boundaries between the Bioenergy criteria and Agriculture/Forestry Criteria

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4.2.2

Feedstock in scope

As a basic principle, the Criteria have been developed using a feedstock-neutral approach.
Based on the various energy scenarios reviewed for this paper, it is likely that the future bioenergy
mix will be based on a variety of feedstock and technologies. While certain technologies, such as
second generation biofuels, are in most cases considered environmentally and socially less risky thanfirst generation technologies, their performance will largely depend on where and how the feedstocks
are produced and converted into useful energy carriers.
Thus, in the main, the Criteria will not express a preference for certain feedstocks but it will rather
propose a framework that will promote responsible production in any instance. This means that the
Bioenergy Criteria will cover bioenergy generated from different types of feedstock, including residues,
energy crops and lignocellulosic biomass such as straw.
This includes bioenergy production from palm oil, which is potentially eligible for certification. As
discussed in Section 2.3.2, the production of palm oil can have negative environmental impacts suchas deforestation and biodiversity loss and indirect land use change. But so can the production of manyother feedstocks. Conversely, palm oil also has developmental benefits such as high productivity andyield.57 Development banks have financed projects to develop sustainable sourcing and conversion
for palm oil. It is the view of the TWG that adverse environmental impacts associated with palm oil
are not inherent to palm oil as a crop, but the way it can be produced. Therefore, the Bioenergy
Criteria do not rule out palm oil en mass, but, like all feedstocks, will allow only palm oil related
bioenergy facilities where stringent climate and sustainability requirements are met. Details about
these requirements can be found in Section 4.4.
That said, the Criteria do have a number of exclusions in eligible feedstocks. These are explained
below.
Woody biomass
Woody biomass as a bioenergy feedstock requires sector-specific considerations to be taken into
account, and will therefore be dealt with under a separate Bioenergy Criteria document that addresses
only woody biomass feedstock.

57 WWF (2015). Sustainable Sourcing Guide for Palm Oils.

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Traditional biomass
The focus of the Bioenergy Criteria is on “modern bioenergy”.58 Traditional biomass use (see Box 1
for details) is not included in the scope of the paper due to the very different nature of the drivers andsupply chains. Traditional biomass also represents no or very little relevance to financial bonds.
Third generation biofuels (algae)
The TWG acknowledges that this is a technology with potential, but notes that technology for algaederived biofuels has not been well developed yet. Hence, it is difficult to set up specific environmental
requirements with limited knowledge of the process. For this reason, algae as a bioenergy feedstock
is not included in the scope of the Bioenergy Criteria at this stage. As the Bioenergy Criteria will be
reviewed on a regular basis, future iterations will reconsider the inclusion of algae biofuels when thetechnology and market is more developed and better information is available.
Biodegradable Municipal Solid Waste
The process of producing energy from biodegradable municipal solid waste (MSW), including sewage
sludge and food waste is covered by the Water Infrastructure Criteria and the Waste Management
Criteria, respectively under the Climate Bonds Standard. However, wastes such as manure and wet
wastes (farm and crop wastes) are in the scope of the Bioenergy Criteria.
4.2.3

Uses of bioenergy in scope

Bioenergy can take various forms. These Criteria are intended to cover facilities which use eligible
feedstocks (as described above) to produce any of the following forms of bioenergy.
Electricity and heat
As discussed in Section 2.2.2, bioenergy is already playing an important role in power generation andthe heating sector. The IEA’s 2DS model projects bioelectricity providing 7% of generation in 2060 for
a 2ºC compatible scenario, and heating for industry of over 2.5 times current levels by 2060.59 As
electricity and heat are some of the main applications of bioenergy, they are within scope.
Cooling
As discussed in section 2.1.2, biomass can be used as an alternative energy source for cooling, which
is produced dominantly by burning fossil fuel. Biomass cooling systems can be used for both industry
and households. The world’s demand for cooling is increasing exponentially: for example, worldwide
power consumption for air conditioning alone is expected to surge 33-fold by 2100.60 It is important to
reduce GHG emissions from cooling generation through options such as using biofuel instead of fossil
fuel.
Transport
As discussed in Section 2.2.2, according to the IEA’s 2DS scenario, biofuels for transport are
projected to make a significant contribution in a 2ºC-compatible scenario, accounting for as much as
30% of all transport fuels by 2060.
For aviation and shipping, i.e. long-distance transport modes, biofuels play an important role indecarbonisation by replacing fossil-fuel driven high-energy-density liquid fuels, as these modes are
58 Refers to biomass converted to higher value and more efficient and convenient energy carriers, such as e.g. pellets,biogas, and biodiesel.
59 IEA (2017). Energy Technology Perspectives 2017.
60 https://www.theguardian.com/environment/2015/oct/26/cold-economy-cop21-global-warming-carbon-emissions

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more difficult to be electrified in the absence of improved battery performance and cost. Therefore,
long-distance transport modes must be decarbonised through improvements of energy efficiency andshift to low-carbon energy carriers including biofuels.61
For road transport, the TWG has discussed whether the electrification of the road vehicles is apreferred alternative for rapid decarbonisation in road transport, to the extent that biofuels for roadtransport should be outside of the scope of these Criteria. However universal electrification may not
be feasible given that large parts of the developing world still do not have access to electricity. More
broadly, electrification is in its early stages. It may also still be more feasible for heavy vehicle types
such as trucks and buses to run, at least in part, on liquid biofuels at least for the short to medium
term.62
On this basis, biofuels for road, shipping and aviation are within the scope of the Bioenergy Criteria.
Biomass-based materials and products for non-energy use
As discussed in Section 2, biomass can also be converted into a range of marketable food & feed
ingredients, chemicals and materials for non-energy purpose, which have the potential to contributeto the circular economy. These products are not covered by the Bioenergy Criteria as they are not forenergy purpose. However, facilities which produce biomass-based materials for energy use and othermaterials for non-energy purpose such as food and feed ingredients, chemicals and materials as coproducts will be potentially eligible for certification, subject to meeting the eligibility requirements in
Section 4.2.4 below.

4.2.4

Bioenergy assets in scope

Taking into account the discussion above on eligible feedstocks and eligible bioenergy use, Table 3
summarises the assets that are potentially eligible for certification, subject to: using one of the eligible
feedstocks per section 4.2.2, and meeting the Criteria described in the rest of this document. Table
4 summarises the assets which cannot be certified under these Criteria, and explains why.
Note that the scope of eligible bioenergy assets are set up based on the 2°C or well below 2°C
global warming target and climate modelling. To reduce the risk of including bioenergy assets thatare not compatible with the long term climate target, the scope will be reviewed and updated whennecessary if the latest climate science suggests.
As a general note, as discussed in section 2.2.2, the TWG recognises the potential of bioenergy
carbon capture and storage (BECCS) in achieving the 2°C and well below the 2°C global warming
targets. Therefore, assets in scope will include bioenergy assets with and without carbon capture andstorage.
Table 3 Assets covered by Bioenergy Criteria
Assets covered

Notes

61 IEA (2017). Energy Technology Perspectives 2017.
62 Note that, contrary to some media reports, those countries and cities which have announced policies to ban sales of petroland diesel vehicles have not specified that electric vehicles must be used instead.

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Facilities producing biofuel/biomass
using feedstock in scope
Fuel preparation process facilities
such as those for drying, size
reduction, pelletisation or briquetting,and pyrolysis

The product from the fuel preparation process facilities may
not be the biomass ready for energy conversion. However,
the Criteria still require them to meet the GHG thresholds
for biomass/biofuel. See details in Section 4.3.

Pre-treatment facilities such as thosefor thermochemical liquefaction,
pyrolysis and gasification
Bio-refinery facilities

Facilities which produce both bioenergy-based products for
power and heat, and biomass-based materials andproducts for non-energy use (such as food and feed
ingredients, pharmaceuticals, chemicals, materials andminerals), are potentially eligible for Certification under theCriteria, subject to specific requirements (Section 4.3 and
4.4). However, facilities producing less than 50% of thebiomaterial for energy use will not be eligible under thecurrent iteration of the Bioenergy Criteria, due to thechallenges to determining appropriate eligibility Criteria forsuch projects and facilities.

Energy production facilities
Heating/cooling facilities using
biofuel/biomass

Not including energy production from biodegradablemunicipal solid waste (MSW), including sewage sludge andfood waste, which are covered by the Water Infrastructure
Criteria and the Waste Management Criteria, respectively
under the Climate Bonds Standard. However, wastes suchas manure and wet wastes (farm and crop wastes) are in
the scope.
Not including energy production from algae.

Electricity generation facilities using
biomass, including those with CCS

As above

Supporting infrastructure

Dedicated transmission lines from an eligible bioenergy
facility to the main grid

Table 4: Assets not covered by the Bioenergy Criteria
Assets not covered

ReasonFacilities producing bioenergy frombiodegradable municipal solid waste(MSW), including sewage sludge andfood waste.

Covered by the Water Infrastructure Criteria and the Waste
Management Criteria under the Climate Bonds Standard.

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63

Facilities producing bioenergy fromthird generation biofuels (algae)

Future iterations will reconsider the inclusion of algae
biofuels when the technology and market is moredeveloped and better information is available.

Traditional biomass use, such as athree-stone fire for heating andcooking in the residential sector.

Traditional biomass has very low conversion efficiency(10%-20%), with inefficient combustion leading to harmful
emissions with serious health implications. And it
represents no or very little relevance to financial bonds.

Land and land management assets
for the cultivation/ production offeedstocks
andbiomassforbioenergy

Covered under appropriate sector criteria, e.g. Forestry fortimber, Agriculture (in development) for various otherfeedstocks.

Transportation assets to transportbiomasstopre-treatment
orbioenergy or bio-refinery facility

Covered by the Climate Bonds StandardLand Transport
Criteria. Vehicles need to follow the GHG emissions
trajectory compatible with the 2ºC global warming target,
i.e. they need to meet specific GHG emissions thresholds
in terms of gCO2/km/passenger or gCO2/km/tonnes offreight.63

Vehicles used in the process of the
production or transportation of
bioenergy, e.g. flexi-fuel vehicles, orthat run on biofuels.

Covered by the Climate Bonds Standard Transport Criteria.
Vehicles need to follow the GHG emissions trajectorycompatible with the 2ºC global warming target, i.e. theyneed to meet specific GHG emissions thresholds in termsof gCO2/km/passenger or gCO2/km/tonnes of freight.64

Facilities for the manufacture ofaircrafts and ships that run on
biofuels, and those aircraft and ships
themselves.

Covered by the Climate Bonds Standard Aviation Criteria
and Shipping Criteria to be developed, whereas the
Bioenergy Criteria cover biofuel used for shipping andaviation.

Blending facilities mixing with biofueland fossil fuel

The TWG has explored the option of putting a minimum
blending rate as a threshold for blended fuel/facilities inorder to achieve significant emissions reduction. However,the blending rate will depend on the transport sector (road,shipping and aviation) where the biofuel is being used,which is beyond the scope of biofuel production. Therefore,
this iteration of the Bioenergy Criteria will not include
blended fuel and blended facilities, nor set up any
requirement on blending rate. The Climate Bonds Standard
will keep watching this space and set up requirements forblending facilities with further investigation in transport
sector.

Facilities dedicated to the productionofbiomaterials(food,
feed,chemicals, etc.)

See Table 3 for more information on when these facilities
will and will not be eligible.

Climate Bonds Initiative (2016). Low
https://www.climatebonds.net/standard/transport
64 ibid.

CarbonLand

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4.3

Mitigation Requirement

As discussed in Section 2, bioenergy use in most cases is driven by GHG mitigation objectives.
However, bioenergy assets/projects also generate GHG emissions over their lifecycle from land usechange, feedstock production and processing, blending, transport and distribution. Therefore, todeliver a net mitigation benefit, these emissions need to be less than those generated by conventional
fuels. How much less is determined by the rapid decarbonisation trajectories implied by the transition
required to meet the Paris Agreement target.
In addition, different feedstocks and conversion pathways for different bioenergy outputs will havesignificantly different lifecycle GHG emissions. Therefore, it's important to set net GHG emission
thresholds for different bioenergy assets/projects in order for the sector to deliver actual and sufficientemission reductions, according to need and opportunity.
All of which means that under the Bioenergy Criteria, issuers are required to conduct a life cycle
assessment of GHG emissions from their bioenergy facility to demonstrate that they meet theappropriate GHG emissions threshold for that type of facility.
Discussed below are: Section 4.3.1 the scope of GHG emissions to be included in this assessment;
Section 4.3.2 the methodology/tool to be used to estimate these GHG emissions; Section 4.3.3 - 4.3.8
the appropriate GHG emissions threshold to use as a screening Criteria for eligibility for certification
under the Climate Bonds Standard; Section 4.3.9 requirements on reduce risk of carbon stock
reduction to address carbon debt issues; Section 4.3.10 requirements to address iLUC; and Section
4.3.11 discussions on material displacement effect.
4.3.1

Scope of GHG emissions threshold: life cycle assessment

The Criteria require issuers to conduct a life cycle assessment of the GHG emissions from bioenergy
production. Aligning with RSB, EU RED and other calculation tools (Section 4.3.2), the scope of the
GHG emissions LCA is from cradle to the use of biomass/biofuel, and it should include directemissions from:
•
•
•
•
•

Feedstock production (including emissions from direct land use change)*
Feedstock processing
Biofuel/bioenergy production
Biofuel storage and blending
Intermediate and final transport steps: transportation of feedstock to processing facilities tofuel production facilities, and transportation of fuel to the point of consumption

Each GHG Calculation Tool (Section 4.3.2) contains details of the boundary of the LCA.
Emissions from indirect land use change (iLUC) are normally beyond the control of the actors involvedin the bioenergy supply chain and the actions to reduce indirect emissions are difficult. Quantifying
GHG emissions from iLUC is also challenging. Therefore, indirect emissions from land use change
will not be in the scope of the LCA. iLUC is therefore addressed separately. See Section 4.3.10 for
more details on requirements in respect of iLUC.

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Embedded emissions such as emissions from producing farm equipment (e.g. tractors), fossil
feedstock production equipment (e.g. drilling equipment), fuel production equipment (e.g. refineries),and others are normally very small. So they will not be included in the scope of LCA. This is also
consistent with the approach in other renewable energy sectors. As a result, transmission lines
dedicated to bioenergy, of which the emissions fall into the embedded emissions of facility
construction, will be automatically eligible without the need to check its emission performance.
GHG emissions from carbon stock changes other than those from direct land use change are notrequired to be included in the LCA. Additional requirements are set up to address the risks of reduced
carbon stock (see Section 4.3.9).

4.3.2

Methodology for GHG emissions calculation

There are a lot of debates about how to do the GHG emissions calculation, what approach should betaken for allocating GHG emissions to products, how long the life time should be over which you canaverage carbon emissions, and so on. As with all sector Criteria under the Climate Bonds Standard,
the Bioenergy TWG suggests that we do not invent a new methodology for LCA but instead adopt
one that has already been tested and approved. The Bioenergy TWG proposed the issuer can use
existing methodologies approved by legislative system or voluntary standards. In terms of legislative
systems, the EU, US and Canada have different systems. RSB attempts to take the best part of all of
those. Which tools are therefore to be used to estimate GHG emissions for the purposes ofcertification are specified below.
Tools for LCA
The TWG believed that the five tools (see Table 5) below are robust tools for calculating GHG
emissions from bioenergy. BIOGRACE 65 is recognised by the European Commission as a voluntary
scheme, and is in line with the EU RED sustainability criteria. RSB GHG Calculator66 is developed by
RSB in collaboration with EMPA, the Swiss Federal Laboratories for Materials Science andTechnology, and HTM Berlin. It has been used by RSB’s certification scheme. UK Solid and Gaseous
Biomass Carbon Calculator67 is provided by the UK’s Office of Gas and Electricity Markets (Ofgem)
to operators under the Renewables Obligation scheme (RO), and the Non-Domestic Renewable Heat
Incentive scheme to calculate their GHG emission savings. GREET68 is developed and maintained by
Argonne National Laboratory under the U.S. Department of Energy's Office of Energy Efficiency and
Renewable Energy (EERE), which is to fully evaluate energy and emission impacts of advanced
vehicle technologies and new transportation fuels.
Issuers are required to choose one of these tools for GHG emissions calculation. Where using one ofthese tools is not a viable option, issuers may use other tools to calculate GHG emissions. However,in this case, issuers must submit details of the calculation, the tool being used and the underlying
methodology and assumptions (if any) to the Climate Bonds Initiative in advance of an application forcertification. The Bioenergy TWG will review the information provided, and decide whether the tool
used by the issuer is robust. If so, the tool will be included as one of the endorsed GHG calculation
tools for issuers to use under the Bioenergy Criteria.

65 http://www.biograce.net/home
66 http://rsb.org/services-products/ghg-calculator/
67 https://www.ofgem.gov.uk/publications-and-updates/uk-solid-and-gaseous-biomass-carbon-calculator
68 https://greet.es.anl.gov/

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Table 5 Endorsed GHG Calculation Tools
NameTechnical scope

OriginBIOGRACE I

Liquid biofuels

EU

BIOGRACE II

Biomass for electricity, heating
and coolingEU

RSB GHG Calculator

Liquid biofuels

International

UK Solid and Gaseous
Biomass Carbon Calculator

Solid biomass and biogas used
for heat and electricity
generation

UK

GREET

Alternative fuels in transport

US

Allocation of GHG emissions
As discussed in Section 2.1.2, biomass-based materials and by-products other than bioenergy, suchas food and feed ingredients, pharmaceuticals, chemicals, materials and minerals can be generated
during the process of bio-refinery. The TWG has agreed that GHG emissions should be allocated todifferent products. Only GHG emissions allocated to electricity, heat, cooling and/ or fuel production
are required to meet the GHG emissions threshold are required to meet GHG emissions threshold(see details in Section 4.3.4 and 4.3.5).
The TWG has explored allocation methodologies including energy content based allocation, masscontent based allocation and system expansion (market price based allocation). The TWG thinks thatenergy content based method is robust and less complicated than system expansion approach, andis being used by most of the bioenergy GHG emissions calculation tools. Therefore, the TWG has
decided that under the Criteria, issuers are required to allocate emissions based on energy content
of the biomass-based products.

4.3.3

Principles for GHG emissions thresholds

Consistent with the overarching principles of the Climate Bonds Standard, the Bioenergy TWG aims
to establish a GHG emission threshold(s) for bioenergy projects/assets consistent with the 2°C or
below global warming targets. These thresholds might potentially vary according to different types offacilities and different bioenergy products – reflecting the substitutes available in different
circumstances, and the different options available in terms of a rapid decarbonisation trajectory.
It has also been heavily influenced by key legislation focused on the ensuring the sustainability ofbioenergy, most notably the EU Renewable Energy Directive II (EU RED II) published in December
2018, the provisions of which must be transposed into national legislation by 30 June 2021.
Under EU RED II, compared to fossil fuels alternatives, biofuels and bio-liquids produced ininstallations starting operation on or before 5 October 2015 should achieve at least 50 % emissions
reduction; those produced in installations starting operation from 5 October 2015 should achieve atleast 60 % emissions reduction; those produced in installations starting operation after 1 January
2021 should achieve at least 70 % emissions reduction. And emissions reduction should be at least

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

75 % for electricity, heating and cooling production from biomass fuels used in installations starting
operation after 1 January 2021 and 80% for installations starting operation after 1 January 2026..
With this in mind, the TWG decided to adopt as an underlying principle governing the Bioenergy
Criteria the requirement that for biofuel/biomass inputs, emissions thresholds will be 80% lower thanfossil fuel baselines.
With respect to bioenergy output (final energy) for electricity, the TWG determined that a common
threshold (using a metric of XgCO2e/kWh for example) for all types of power generation would
represent a consistent ‘low carbon power’ threshold which recognises the importance of all renewableenergy sources for achieving rapid decarbonisation in the power sector, while also prohibiting thecertification of individual bioenergy facilities which have significant associated emissions and are
therefore not in alignment with the necessary decarbonisation trajectory for the power sector indicatedby the latest climate modelling. The Bioenergy TWG, therefore, explored the idea of using similar
metrics for bioenergy as other renewables with Climate Bonds Criteria. For example, under the
Climate Bonds Standard Geothermal Criteria and Hydropower Criteria, electricity generated fromgeothermal facilities and hydro facilities need to not exceed a GHG emission threshold of
100gCO2/kWh (see Section 4.3.5 for rationale of using 100gCO2/kWh to define low carbon power) tobe considered as low carbon and eligible for certification.
The GHG emissions thresholds for electricity generation from biofuels therefore marry arequirement for a consistent ‘low carbon power’ threshold, with the principle of emissions thresholds
for biofuel/ biomass inputs being 80% lower than fossil fuel baselines.
The TWG also explored options for establishing different GHG thresholds for existing and newelectricity generation facilities. This is explained further in the description of selected emissions
thresholds below.
For bioenergy output (final energy) for heating/ cooling, the possibility of electrified heating is anactive discussion in climate policy circles. However, the large-scale electrification of the heating sector
is likely to come after energy efficiency improvements and could compete with hydrogen and biogas
for heating. The heating market is also complicated due to segmentation. There are huge differencesamong industrial process heat, space heating, heating for cooking, or heating for water, metropolitan
areas with distributed heating works and rural areas. So benchmarking heating output from bioenergy
with electricity is problematic.
For these reasons, for bioenergy for heating/cooling and co-generation, in addition to a GHG emission
threshold for biofuel/biomass itself, the TWG has considered a requirement on energy conversion
efficiency to make sure biofuel/biomass input will be in a good use to deliver carbon emissions
reduction. Some biofuel/biomass might be able to meet a GHG emissions threshold even with very
low conversion efficiency. Efficiency will vary depending on the use of bioenergy (electricity, heating
and transport) and types of technology (e.g. co-firing and CHP). Details of energy efficiency threshold
can be found in Section 4.3.6.
For transport, the TWG thinks that in the long-term (up to 2050 and beyond), the decarbonisation of
the transport sector will rely to a large extent on electrification, at least for road transport, but this is
not widespread at present, hence an interim option for biofuels for road transport to replace fossil
fuels. For shipping and aviation sector, it is not believed electrification is a viable long-term strategy.
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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

For these reasons, thresholds for the production of biofuels for transport are also based on therequirement that biomass inputs represent a reduction of 80% compared to a fossil fuels baseline.
How these principles play out for specific eligibility Criteria and thresholds for different bioenergy
assets is explained below.

4.3.4

GHG emissions thresholds for electricity facilities using biofuel/biomass

It would be ideal to be able to derive a simple emissions intensity benchmark for the global power
sector from the Integrated Assessment Models (IAMs) used to model climate scenarios. To this end,
the latest climate modelling which aims to map out 2ºC decarbonisation scenarios has been reviewed
to see what guidance or framework parameters it can provide on the scale of decarbonisation required
across the power sector.
However, using these models is problematic due to the following challenges:• Most climate models do not separately identify different technologies within the power sector,
but provide indicators in the form of budgets or average carbon intensities across the power
sector more broadly.69• These indicators are at global levels. In reality, each country will have specific considerations
driving their optimal energy mix, and the associated emissions from that.
• These indicators are subject to the uncertainties inherent in modelling. Therefore, they should
be interpreted loosely and not as hard and fast limits.70• Due to the uncertainties inherent in climate modelling, scenarios are generally presented ashaving a probability of limiting warming to 2ºC (or some other temperature). Generally, a 2°C
scenario is considered to be one that limits warming to below 2°C with a probability of at least
66%, though some models use a probability of at least 50%. Further, some scenarios do notmatch the objective of limiting warming to 2°C, but instead denote the degree of radiative
forcing or atmospheric concentration of CO2 which they result in.
Therefore, the approach taken has not been to pick a power sector emissions intensity benchmark
from any one IAM and use it as a rigid threshold for bioenergy. Instead, the approach has been to be
guided by the sense of direction and scale of reductions in power sector emissions described byclimate models as well as the IEA’s Energy Technology Perspective 71 model (IEA ETP) on the scaleof emissions reductions required from the global power sector, using this as a starting point to set anemission intensity threshold compatible with the bioenergy sector as a whole that contributing toachieving this, while also recognising some diversity in individual circumstance according to thealternative capacity and political choices at play. A number of clear and consistent messages can betaken from these models and analysis:•

The GHG budget for the global power sector is very low, and this needs to be reflected by the
Criteria.

69

Many models do not disaggregate by technology; those that do often focus on primary energy supply, in which case fossil fuels used for
power generation are included in the same category as those for transport, industry, etc.
70
Integrated Assessment Models are subject to large uncertainties because by their very nature they are reducing a complex real worldprocess with social, economic, technological and physical science dimensions to a limited set of quantitative inputs and outputs. Thismeans that any GHG budget or emissions intensity pathway they describe for the power sector is indicative only and should not betreated too rigidly
71 Discussed in its annual Energy Technology Perspectives reports

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•
•

•

•
•

The models indicate a clear direction of travel for the global power sector, namely: drastic andrapid decarbonisation across the sector within just three decades.
Reducing power sector emissions is often seen as one of the cheapest and most politically
acceptable mitigation options, hence power sector reductions are much steeper than for global
emissions as a whole.
This needs to happen in spite of increasing global demand for electricity. Low carbon
technologies in the form of renewables, nuclear power and CCS need to expand rapidly not
only to replace fossil fuels, but also to meet this increased demand.
Overall, the models indicate a clear direction of travel for the global power sector, namely:
drastic and rapid decarbonisation across the sector within just three decades.
The vast bulk of power sector emissions reductions will obviously come from a switch awayfrom thermal energy sources. However, the tight GHG budget suggests a high degree of
ambition is required, and therefore that it is reasonable to place precautionary limits on evenrelatively low-emitting power sources such as hydropower, particularly as they are so longlived.

These precautionary limits need to strike a balance which set us on the right path in terms of overall
decarbonisation, but allows flexibility due to the different political, technical and geographic
circumstances of individual countries.
To achieve this, an emissions intensity threshold of 100gCO2e /kWh for bioenergy is proposed forfacilities commissioned up to and including 2021, based on the following reasoning:•

A threshold of 100g CO2e/kWh would lead to the average sector performance improving, while
not being so stringent as to produce the perverse result of discouraging a large number ofprojects which would be preferable to thermal alternatives. This is because: lifecycle GHG
emissions from bioenergy for electricity vary from 15 to 650 gCO2e/kWh72, where the majorityof lifecycle GHG emissions range from 16 and 74 gCO2e/kWh (excluding land use-related
carbon stock changes and land management impacts).73

Whether different thresholds should be set for new and existing bioenergy facilities was also
considered, specifically, a lower threshold for new facilities. IEA analysis has previously suggested
average emissions intensity of new-build electricity capacity should be ~50 gCO2e/kWh over theperiod 2020-2040.74 There is certainly appeal in making new builds more ambitious as they will exist
longer into the future, and this will help to bring the industry average down. The TWG decided to set
just such a lower threshold for ‘new’ facilities, using recent changes to the UK Government’s
Department for Business, Energy and Industrial Strategy Contracts for Difference Scheme for
Renewable Electricity Generation as a precedent. In line with this, the TWG decided to adopt a lower
threshold of 29 kg CO2e / kWh for plants commissioned after 2021..75
72 Amponsah et al. (2014). Greenhouse gas emissions from renewable energy sources: A review of lifecycle

considerations.
73 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.
74

https://www.iea.org/media/ebc/13thebcmeetingjune2015/Gagne.pdf

75 In August 2018, a government consultation on proposed amendments to the Scheme and follow-up consultation on

implementation, contract changes, and a revised CHPQA standard took place. In response to that, the UK Government
decided that in light of the responses to the consultation, and the new data that has become available since the consultation
period, a revised GHG threshold would be used, based on a central value for bioenergy production (the median - equivalent
to the 50th percentile). This value lies between the two GHG threshold options which the government consulted on in the

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

On a case-by-case basis, these thresholds threshold would then meet the main objectives of:• Reducing or limiting bioenergy’s average emissions, thereby demonstrating a strong
contribution to reducing the global power sector GHG budget;• Being unlikely to result in instances of bioenergy projects which are clearly preferable tofossil fuel alternatives being ineligible for certification; and• Being unlikely to result in low performing bioenergy projects which would significantly raise
the sector average being certified;• Being consistent with the mitigation criteria already adopted by the Climate Bonds Standard
for other forms of renewable energy.
As with all of the Climate Bonds Standard Sector Criteria, we will revisit our assumptions, data andproposed Criteria on a regular basis. Our first review will be no more than 1 year from release of theCriteria, less if significant new knowledge or tools emerge before then, or if experience in the market
demonstrates the need for review. For example, the imminent release of 1.5 degree warming
scenarios will be reviewed as a matter of priority to determine whether these scenarios imply asignificantly different decarbonisation trajectory for the power sector.

4.3.5

GHG emissions thresholds for facilities producing biofuel/biomass

As discussed in section 4.3.3, for facilities producing biofuel/biomass as bioenergy input, the biofueland biomass produced needs to achieve 80% emissions reduction compared to fossil fuel baseline.
This approach requires the agreement of appropriate fossil fuel baselines. One option is that fossil
fuel baseline would be decided by methodologies or benchmarks in either national regulations orexisting voluntary standards, and issuers would adopt the baselines set for their jurisdictions. However,this approach would create inconsistency among bioenergy assets/projects in different jurisdictionsor those using different voluntary standards due to different baseline calculation methodologies.
As climate change is a global issue, and the decarbonisation pathways required to meet 2ºC or 1.5ºC
goals are globally relevant, a uniform emission reduction target and baseline for issuers around theworld with the same level of ambition is more logical. For this reason, the TWG has decided to use
fossil fuel baselines under the EU RED II as the EU RED II represents a global effort to drive thedevelopment of bioenergy, and the science behind these baselines has improved compared to theexisting EU RED. These baselines are also aligned with other standards such as the EU Fuel Quality
Directive, US EPA RFS and California Low Carbon Fuel Standards.
Table 6 summarises the fossil fuel baselines under EU RED II76, that it is therefore proposed areembedded in the Bioenergy Criteria under the Climate Bonds Standard.
Table 6 Fossil fuel baseline under the EU RED II

December 2017 consultation, and was considered to strike a suitable balance between ensuring new plants aredemonstrably ‘low carbon’ and ensuring that developers are able to build plants that can comply with this new GHG criteria
value (threshold). This value supports solid and gaseous biomass plants that have low GHG emissions compared withcurrently operating plants. - UK Department for Business, Energy and Industrial Strategy, (2018). Contracts for Difference
Scheme for Renewable Electricity Generation. Available online.
76 https://ec.europa.eu/energy/en/topics/renewable-energy/biofuels/sustainability-criteria

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Bioenergy

Baseline(gCO2e/MJ)

Biofuels for transport

94

Bio-liquids used for heat production

80

Solid and gaseous biomass for heating/cooling
production

80 (heat/cooling)

Note that for solid and gaseous biomass for heating/cooling, the EU RED II has set up fossil fuelbaselines for heat/cooling produced (final energy), but not for the biomass itself (primary energy).
Given the baseline for bio-liquids used for heat production is the same as that for heat/cooling
produced from solid and gaseous biomass, the TWG has decided that the baseline for heat/cooling
produced from solid and gaseous biomass (final energy), which equals to the baseline for bio-liquids,
will be used as the baseline for solid and gaseous biomass itself (primary energy).
The TWG did however decide to set up a separate threshold for biofuel/biomass for electricity. This
is to ensure the consistent level of ambition along the supply chain, and to ensure the electricity
producer can meet the 100gCO2e/kWh threshold for facilities commissioned pre-2021. Given the
maximum energy efficiency of converting biofuel/biomass is about 40%77, the necessary threshold forbiofuel/biomass primary energy would be 11.1 or 3.2gCO2e/MJ respectively.78 This is also alignedwith the requirement that biofuel/biomass input should achieve 80% emissions reduction compared
to fossil fuel baseline.
The resulting GHG emissions thresholds for input biofuel/biomass are shown in Table 7 below.
Facilities producing biofuel/biomass need to meet these thresholds.
Table 7 GHG emissions thresholds for facilities producing biofuel/biomass
AssetsThresholds

Notes

Facilities producing liquid biofuel, solidand gaseous biomass for electricity
production

11.1/3.2gCO2e/MJ

To achieve 100gCO2e /kWh(existing) or 29gCO2e/kWh (new)for electricity generated withenergy efficiency of 40%.

Facilities producing liquid biofuel, solidand gaseous biomass for heating andco-generation

16.0gCO2e/MJ

To achieve 80% emission
reduction to 80gCO2e/MJ baseline

Facilities producing biofuel fortransport

18.8gCO2e/MJ

To achieve 80% reduction to
94gCO2e/MJ baseline

77 Joint Research Centre (JRC), (2017). Solid and Gaseous Bioenergy Pathways:

Input Values and GHG Emissions.
https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/solid-and-gaseous-bioenergypathways-input-values-and-ghg-emissions-calculated-according-0
78 (100gCO2e/kWh) / (3.6MJ/kWh) ×40% (efficiency) = 11.1gCO e/kWh
2(29gCO2e/kWh) / (3.6MJ/kWh) ×40% (efficiency) = 3.2gCO2e/kWh.

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4.3.6

Requirements for heating/cooling, and co-generation facilities using biofuel/biomass

As discussed in Section 4.3.3, in addition that biofuel/biomass being used needs to meet 80% GHG
emissions thresholds compared to fossil fuels, heating/cooling, and co-generation facilities using
biofuel/biomass are required to meet energy efficiency thresholds as well. The TWG has set up
these energy efficiency thresholds for using biofuel/biomass for heating/cooling based on the bestpractices in the industry. The TWG has checked data about energy efficiency of bioenergy forheating/cooling and co-generation (see Table 8), and decided to set up 80% as energy efficiency
threshold. Based on the data about the current practices in the industry, 80% is ambitious but
achievable with current technologies.
Note that some CHP facilities may not always be in CHP mode. For example, in winter CHP plants
would be in CHP mode to produce heat and power as the demand for heating is high; while insummer the CHP plants may only generate electricity as the demand for heating is low. Under theCriteria, CHP facilities need to meet requirements when they are in CHP mode.
Table 8 Energy efficiency of bioenergy facilities for heating, cooling and CHP
Bioenergy
S2Biom database79
EU
facilities(solid biomass)
average80
Heating/cooling
60% (min) - 85% (typical) - 90% (max) 81%
CHP

Heating
30% (min) - 62% (typical) – 80% (max)Electricity
15% (min) - 32% (typical) - 42% (max)

4.3.7

Heating
67%
Electricity
19%

Summary of GHG emissions thresholds

Based on the discussion above (Section 4.3.1 – 4.3.6), a summary of GHG emissions thresholds
under the bioenergy sector is demonstrated in Table 9 below.
In summary, for electricity facilities, the electricity generated from biomass/biofuel is required to meet
100gCO2e/kWh emissions threshold for facilities commissioned during or prior to 2021, and
29gCO2e/kWh emissions threshold for plants commissioned after 2021. For heating/cooling and cogeneration facilities, their biofuel/biomass used is required to achieve 80% emission reduction
compared to fossil fuel, and meet the appropriate energy efficiency threshold. These principles are
summarised as below in Box 2.

Table 9 Summary of GHG emissions thresholds under the Bioenergy Criteria
AssetsPrinciple

Thresholds forbiofuel/biomass
produced/used

Energyefficiency
thresholds

Electricity threshold

79 http://s2biom.alterra.wur.nl
80 BASIS (2015). Report on conversion efficiency of biomass. http://www.basisbioenergy.eu/publications/basis.html

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Facilities producing
liquid biofuel, solidand gaseous
biomass forelectricity
production

80% GHG
reductioncompared to fossil
fuel baseline, andconsistent with theelectricity
generation GHG
threshold11.1/3.2gCO2e/
MJ

N/A

N/A

Facilities producing
liquid biofuel, solidand gaseous
biomass forheating and cogeneration

80% GHG
reductioncompared to fossil
fuel baseline

16.0gCO2e/MJ

N/A

N/A

Facilities producing
biofuel fortransport

80% GHG
reductioncompared to fossil
fuel baseline

18.8gCO2e/MJ

N/A

N/A

Electricity facilities
using
biofuel/biomass

Consistent with‘low carbon power’goals across whole
power sector toenable 2D targets
to be met

N/A

N/A

100gCO2e /kWh(existing) or
29gCO2e/kWh(new)Heating/cooling,
and co-generation
facilities using
biofuel/biomass

80% emissions
reductioncompared withfossil fuel baseline;
and energy
efficiency threshold

16.0gCO2e/MJ

80%

N/A

4.3.8

Implications of proposed GHG thresholds for input biomass/biofuel

To test whether the thresholds for biofuel/biomass are too stringent or too loose, the TWG has
examined data about typical values of lifecycle GHG emissions from bioenergy provided by the EU
RED II, and has found that: biofuel and bio-liquid such as biodiesel, hydrotreated oil and pure oil fromwaste cooling oil and wheat straw ethanol are likely to meet the biofuel input thresholds proposed
above. In fact, many bioenergy pathways can have much lower supply chain emissions than fossil
fuels, in the best cases over 90%. 81 This suggests that the GHG emissions threshold forbiomass/biofuel is practical to achieve, though may seem ambitious in the industry. However, thelower threshold for new plants commissioned from 2021 sends a clear signal regarding the need to

81 IEA Bioenergy (2017). Technology Roadmap: Delivering Sustainable Bioenergy.

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take all opportunities to support bioenergy and biofuel production that is in line with the goals of a net
zero carbon power sector by 2050.
Table 10 provides examples of potentially eligible biofuel/biomass with typical value of lifecycle GHG
emissions based on the EU RED II. Table 11 provides a summary of default values of GHG emissions
reductions of different bioenergy pathways under the EU RED II.
Table 10 Examples of potentially eligible biofuel/biomass based on EU RED II82
Biofuel/biomass production pathways
Typical GHG
emissions(gCO2e/MJ)
waste cooling oil biodiesel
16.0hydrotreated oil from waste cooking oil
9.4
pure oil from waste cooking oil
2.0
wheat straw ethanol
13.7
waste wood Fischer-Tropsch diesel/petrol in free-standing plant
13.7
waste wood dimethylether (DME) in free-standing plant
13.5
waste wood methanol in free-standing plant
13.5
Fischer-Tropsch diesel from black-liquor gasification integrated with pulp
10.2
mill
Fischer–Tropsch petrol from black-liquor gasification integrated with pulp
10.4
mill
dimethylether DME from black-liquor gasification integrated with pulp mill
10.2
methanol from black-liquor gasification integrated with pulp mill
10.4
woodchips from forest residues
5 – 22
woodchips from short rotation coppice
8 – 25
woodchips from stemwood
5 – 22
woodchips from industry residues
4 – 21wood briquettes or pellets from forest residues
6 – 34
wood briquettes or pellets from short rotation coppice
6 - 41wood briquettes or pellets from stemwood
5 - 34
wood briquettes or pellets from wood industry residues
3 - 22
3
agricultural Residues with density <0.2 t/m
4 - 293
agricultural Residues with density > 0.2 t/m
4 - 15straw pellets
8 - 10bagasse briquettes
5-9Table 11 Summary of default values of GHG emissions reduction of bioenergy under EU RED II83

82 Source: European Commission (2016). Proposal for a Directive of the European Parliament and of the Council on theuse of energy from renewable sources. http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX:52016PC0767R%2801%29
83 Source: IEA Bioenergy (2017). Technology Roadmap: Delivering Sustainable Bioenergy.

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4.3.9

Indirect land use change (iLUC)

Indirect land use change (iLUC) refers to a knock-on effect where biofuel feedstock production resultsin the conversion of lands somewhere else in order to produce the crops displaced by the biofuel
feedstock.
While direct impacts are usually under the direct control of the actors involved in the bioenergy supply
chain, and can therefore be estimated and incorporated in any LCA (as is proposed above), indirect
impacts can act beyond the farm gate, borders or across crops and can be very difficult for anindividual operator or bond issuer to robustly estimate or mitigate.
In some countries, such as the USA (certain states, such as California) have enacted legislation toaddress indirect impacts, under which the iLUC is included in the LCA and models have been built toestimate iLUC. However, these models have been built specifically to the jurisdictions they areoperated and thus not applicable to the Bioenergy Criteria which aim to setting requirements for a
global green bond market. Results from iLUC model may also have high uncertainty and variation
due to insufficient understanding on global economic dynamics including trade patterns, land-use
productivity, fuel prices and by-product utilisations, and the selection of specific policy models, etc.84
In the EU, EU RED II addresses the risk of iLUC by limiting the extent to which member states cancount energy from feedstocks associated with a high risk of indirect land use change towards reaching
their renewable energy targets. By 2021, such feedstocks will be capped at 2019 levels, and by 2030
such feedstocks will not be able to be counted at all. However, EU RED II does not go so far as toban these high risk crops in the EU. In March 2019, the European Commission adopted a DelegatedAct85 which determined that high iLUC-risk fuels are fuels that are produced from food and feed cropsthat have a significant global expansion into land with high carbon stock such as forests, wetlands
and peatlands.
Two additive conditions are specified to identify this circumstance:

84 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.
85 europa.eu/rapid/press-release_MEMO-19-1656_en.htm

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultationa. The global production area of the feedstock has increased annually by more than 1% and100,000 hectares after 2008.
This criterion verifies whether the feedstock is actually expanding into new areas. Feedstock for which
no, or only very limited, expansion of the production area is observed (mainly because production
increases are generated by improving yields rather than expanding the production area) do not causesignificant deforestation and, therefore, do not give rise to a very high level of GHG emissions fromILUC.
b. More than 10% of such expansion has taken place on land with high carbon stock.
Currently, none of the voluntary standards address indirect impacts as a mandatory component. Thatsaid, some of the voluntary standards such as the Roundtable for Sustainable Bioenergy (RSB) arecontinuing to work on a practical mechanism to address indirect impacts risks.
The RSB in particular has developed a module for operators willing to demonstrate that theiroperations have a low indirect land use change risk on a voluntary basis. It has identified three
approaches to mitigate indirect land use change impact, including yield increase (e.g. throughupgrading land), use of waste and residues and cultivation of unused or degraded land.
RSB optional module: low iLUC risk biomass criteria and compliance indicators• Yield increase: operators demonstrate that additional biomass was produced through anincrease in yield compared to a reference date, without any additional land conversion. The
biomass that is produced above the baseline scenario is eligible; or• Unused/degraded land: operators demonstrate that biomass was produced from land that was
not previously cultivated or was not considered arable land; or• Use of waste / residues: operators demonstrate that the raw material use is derived fromexisting supply chains and does not require dedicated production out of arable land. Note that
guidance on definitions of waste and residues can be found under RSB.
TWG selected approach to address iLUC risk
The TWG believes the requirements under the RSB iLUC optional module are detailed andcomprehensive requirements to address iLUC risk. They are also compatible with the EU RED II
proposals for identifying high iLUC risk but have the advantage that they apply on a case-by-casebasis for each operator, rather than across the feedstock as a whole globally. This keeps open theoption of certification under the Climate Bonds Standard to those individual facilities that are meeting
the Criteria described here, and are not penalised by the impacts of the use of that feedstock inaggregate.
Therefore, the TWG propose that issuers should either get certified by the RSB iLUC optional module
to demonstrate their projects have low indirect land use impact; or provide evidence anddocumentation to demonstrate that they meet the criteria under the RSB iLUC optional module andthus have low iLUC. Details of the RSB iLUC model can be found here: http://rsb.org/the-rsbstandard/standard-documents/low-iluc/

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

4.4

Adaptation and Resilience Requirement

4.4.1

Framework for Criteria addressing Climate Adaptation and Resilience

As discussed in Section 2.3, bioenergy feedstock production can impact on the resilience of
ecosystems to climate change through changes to water quality, biodiversity and soil carbon, etc. And
conversely, climate change can influence the resource potential and cultivation of feedstocks throughchanges in temperature and water availability.
Therefore, the TWG proposed specific requirements about climate change adaptation and resilience
to ensure that: bioenergy feedstock is being produced in such a way that is not damaging theresilience of the ecosystem, and is resilient to climate change; bioenergy generation facilities areresilient to climate change; and bioenergy assets/projects have no negative impact on climate
resilience of areas in/beyond which they are operated.
The TWG agreed that the climate risk posed to the bioenergy sector is more about sustainable
feedstock production and hence the siting of facilities. The TWG discussed the possibility of requiring
bioenergy facilities to have a model that shows they will be able to have sustainable feedstock sourcesin the climate change scenario. However, there is high uncertainty of modelling. For large scale
facilities, as they rely on international feedstock sources, they will need to do global analysis andmodelling which is very challenging. And modelling is difficult, and in most cases not applicable tosmall scale facilities.
Therefore, instead, the TWG decided to require bioenergy assets and projects to:
1. Conduct a climate risk assessment and have an adaptation plan where high risks are
identified – assessed via the Adaptation and Resilience Checklist; and2. Demonstrate that their source feedstocks are compliant with established and approved bestpractice standards for the industry to make sure feedstock production is environmentally
sustainable without negative impact on ecosystem resilience; and3. Identify food security risk, if any; and have a plan to address it when the risk is significant.
The Adaptation and Resilience checklist is complementary to the best practice standards as currently
these standards do not explicitly address climate risks nor require climate risk mitigation.
4.4.2

Requirement 1: Adaptation & Resilience checklist

The Adaptation & Resilience checklist focuses on the processes the issuer should demonstrate they
have been through to determine if the issuer is asking and evaluating the right questions at the rightstages of development and if the issuer is monitoring and reporting appropriately.
To meet the requirements, issuers must demonstrate that:•••

Climate related risks and vulnerabilities to the asset are identified; andImpacts in, and beyond the asset to ecosystems and stakeholders are identified; andStrategies to mitigate and adapt to the climate risks and vulnerabilities identified to protect theasset.

The checklist (Table 12) is a tool to verify that the issuer has implemented sufficient processes andplans in the design, planning and decommissioning phases of a project to ensure that the operation

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultationand construction of the asset minimises environmental harm and the asset is appropriately adaptive
and resilient to climate change and supports the adaptation and resilience of other stakeholders inthe surrounding environment.
All elements of this checklist must be addressed with appropriate evidence that these requirements
are being met, or are not applicable in respect of the specific assets and projects linked to the bond.
It is expected that their evidence will encompass a range of assessment and impact reports andassociated data, including but not limited to those reports required to meet national and local licensing
and approval processes. This might include Development Consent Orders, Environmental Impact
Assessments, Vulnerability Assessments and associated Adaptation Plans.
Table 12 Checklist for evaluating the Issuer’s Adaptation & Resilience performance in respect of abioenergy facility
Item

Proof
Overallgiven
assessment
Section 1: The issuer identifies the climate related risks and vulnerabilities to the asset/ site
Processes are in place (as part of both the asset design and ongoing
management) to assess key risks to the assets from a changing
climate.
These key risks should include the following, plus any others felt to beof concern for the operation of these assets. The risks should be
identified and interpreted in terms of the impact on the asset and therelated effects for the business – e.g. impact on operating feasibility
and schedules and potential system outages, impact on maintenancerequirements etc.
N.B. This list taken from World Banks Climate and Disaster Risk
Assessment Tool
•
•
•
•
•

Temperature changes, and extremes in temperature
Extreme precipitation and flooding
Drought
Sea level rise and storm surge
Strong winds

How these affect the asset or site in question will be highly variable
and will be for the issuer to identify and relate to their operations.
These assessments should use climate information, modelling andscenarios from a peer reviewed source.
This assessment should be done regularly. The frequency of theassessment will depend on the nature of the climate related risks
and vulnerabilities, and should be specified by the issuer andreporting against in subsequent annual reporting.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

Section 2: The issuer identifies the impacts in larger context (spatially and temporally) beyond
the asset/site (i.e. the impacts of the underlying assets and projects on the broader ecosystemand stakeholders in that ecosystem)
Processes are in place (as part of both the asset design and ongoing
management) to assess the impact of the bioenergy asset on the
climate resilience of other stakeholders in the social, economic andenvironmental system in which it operates and how to mitigate or
reduce any negative impacts
These assessments address:• Any ways in which bioenergy facilities might affect the climate
resilience of other users/stakeholders?
• Any ways in which bioenergy facilities improve the adaptation
capacity of other users/stakeholders?
For example, they may include:• Impact on water quality and quantity for other users in the basin• Waste and pollution emitted• Fire hazards
Section 3: The issuer has designed and implemented strategies to mitigate and adapt to theseclimate risks and vulnerabilities
An adaptation plan has been designed and is being implemented toaddress the risks identified in the assessments above
The issuer has designed or amended assets and designed oramended asset maintenance plans to ensure that scheduled
maintenance is sufficient to cope with the ongoing impacts of climatechange and a plan has been established to govern how they approach
emergency maintenance needs arising from sudden climate change
impacts (e.g. extreme storms)
The issue has training, capacity and governance arrangements inplace for how the organization will deal with the impacts of exception
events (e.g. droughts, floods, severe pollution events, extreme storms,
winds etc.)
The issuer has monitoring and reporting systems and processes to
identify high risk scenarios
The issuer has contingency plans to address disruption to operations
or loss of the asset and any resulting environmental or social damage
The issuer has processes for feeding risk assessment back into
decision making.
The issuer has a budget allocated to implementing the adaptation planand has a named member of staff responsible for its implementation.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

The issuer complies with any existing broader or higher-level adaption
plans, such as NAPAs.

4.4.3

Requirement 2: Adherence to approved best practice standards

For bioenergy producers such as biomass power plant and biofuel based heating facilities who aresimply purchasing biofuel and biomass in the market, it is important to make sure that their source
biofuel and biomass is low carbon and environmentally sustainable.
Approach
The main aspects of environmental impacts to consider when addressing the climate resilience
impacts of bioenergy feedstock production are the previous land use, species selection and the
management practices used to produce those feedstocks. While most of the focus is on land, one
should not forget that water is likely to become an even more limited resource in the future. Dependingon these variables, the environmental performance of the various bioenergy supply chains will be very
different.
Considering the “Do not reinvent the wheel” principle under the Climate Bond Standard, and theresults of the Bioenergy TWG discussions and public feedback received, it is proposed that leveraging
existing, credible proxies is the best path forward when developing criteria to address environmental
impacts of bioenergy feedstock production. Also, as it is challenging for verifiers to check
environmental impacts of bioenergy supply chain in all aspects, therefore, it makes sense for issuers
to use standards and accreditation that already exist.
The TWG has reviewed a number of best known and most used voluntary standards covering the
production of bioenergy feedstocks to check their robustness and credibility as approved best practicestandards (details in Option A - approved voluntary standards). Reference option A in Figure 4 below.
However, many standards exist, particularly in local contexts, and it is not possible for TWG to review
them all in advance. Furthermore, the previous public consultation period following the TWG processhighlighted that to list only a few selected voluntary standards as eligible proxies would restrict many
stakeholders in accessing the market. Therefore, it is proposed that when certification under one of
the approved best practice standards is not an option, the Climate Bonds Standard will accept otherstandards or mechanisms of compliance as outlined below. Reference option B in Figure 4 below.
As Figure 4 shows, the Bioenergy Criteria therefore provides two options for issuers to demonstrate
their sourcing biomass is environmentally sustainable.
Figure 4 Options in Climate Bonds Standard Bioenergy Criteria – adherence to approved best practicestandards

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

Climate Bonds Standards Bioenergy
Criteria - adherence to approved bestpractice standards

Option A: feedstock certified under one of
the best practice standards approved by the
TWG.

Option B: feedstock certified under astandard or a similar scheme where issuer
can prove the standard has sufficientrequirements and thus is robust.

Option A – feedstock certified under one of the best practice standards approved by the TWG
There are a number of legally binding and voluntary tools that could be considered. Given the
fragmented legislative landscape, relying on legislation as a proxy, is considered not only
insufficient but a potential risk to the credibility of the Climate Bond Standard. Therefore, it has been
proposed by the TWG that credible voluntary standards, independently verified by credible third
party organizations are the most efficient to provide a robust framework for the Climate Bonds
Standard.
The best practice standards that will be considered acceptable proxies under the Bioenergy Criteria
must have sufficient requirements in the following areas shown in Table 13 (more details inAppendix 3). The requirements regarding environmental impacts such as soil and water
management are to make sure bioenergy feedstock production is environmentally sustainable, thatis, not damaging the resilience of the ecosystem and being resilient to potential climate change. The
requirements about governance aim to ensure the standards are robustly developed andimplemented.
Table 13 Areas to be considered for determining the robustness of standards
Areas
Requirements
Environmental
Priority areas protection
Chemical use
Pest management
Nutrient management
Soil management
Water management
Genetic diversity management
Sustainable resource extraction
Waste management
GovernanceCompliant with ISEAL's code of good practiceMulti-stakeholder in involvement in standard development process
Multi-stakeholder participation in the standards system

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

Scientific input
Transparency
Complaints and appeals process
Regular reviews and revisions of the standards Standard gives
accreditation
Stakeholder consultation in certification and auditing process
Audits required annually
Audit sample size specified
Sanction mechanisms in place
Training of auditors
Training opportunities for users of the standard
Source: adapted from 1. WWF (2011) The 2050 Criteria Guide to Responsible Investment in Agricultural, Forest, andSeafood Commodities; 2. WWF (2013) Searching for Sustainability Comparative Analysis of Certification Schemes for
Biomass used for the Production of Biofuels.

Note that the GHG emission performance of the bioenergy production including life cycle emissions
and indirect land use impact is not an indicator to determining whether the standard is robust or not,as GHG emissions issue is covered in the Mitigation Component of these Bioenergy Criteria as
described above.
19 voluntary standards have been evaluated including RSB, RTRS, FSC, ISCC+, ISCC EU, RSPO,
2BSvs, RBSA, Greenergy, Ensus, Red Tractor, SQC, Red Cert, NTA 8080, GGL, PEFC, Proterra and
SBP. The TWG has both evaluated the principles and criteria of each voluntary standard against theindicators above, and for cross-checking, also reviewed other literature which similarly assesses therobustness of these voluntary standards86:
IUCN, based on the comparison prepared by Proforest, concluded that: “RSB covers moresustainability criteria, with greater detail, and with more breadth in terms of level of assurance thanany of the other VSS. NTA8080, Bonsucro, RTRS and RSPO also meet a good level of quality in allcomparisons made. ISCC, Proterra 87 and Greenergy can be considered to be of overall medium
quality. REDcert and 2BSvs fall in the low quality segment, with 2BSvs having the overall lowest
quality”88.
In case of solid biomass (wood chips, wood pellets mainly) the standard landscape looks differently.
The proliferation of standards has been less of a problem, even though various stakeholders have set
up a number of standard setting processes. Additionally, compared with liquid biofuels, the standards
that are relevant for solid biomass have not been analysed to the extent that the liquid biofuel
standards have been by comparative studies. Some of the standards used to certify solid biomass
have been created prior to the developments in the bioenergy sector to cover forest products in

86 This includes: 1. Jinke van Dam Consultancy (2015). Inventory trends sustainability biomass for various end-uses. 2.

S2Biom (2015). Benchmark and gap analysis of criteria and indicators (C&I) for legislation, regulations and voluntary
schemes at international level and in selected EU Member States. 3. WWF (2013). Searching for Sustainability
Comparative Analysis of Certification Schemes for Biomass used for the Production of Biofuels. 4. IUCN (2013). Betting
on Best Quality. A Comparison of Quality and Level of Assurance of Sustainability Standards for Biomass, Soy and Palmoil.
87 Certification according to the ProTerra Standard is available worldwide, for `all agricultural commodities. Moreinformation: www.proterrafoundation.org
88 Page 5, http://cmsdata.iucn.org/downloads/betting_on_best_quality.pdf

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

general, among which FSC89 and PEFC90 are the two largest. Others such as Green Gold Label(GGL)91, NTA808092 or the SBP93 have been specifically created for the bioenergy sector. There areother ongoing initiatives, but at the moment the standards listed above are probably the mostimportant ones. These standards are building on the forest certification schemes.
FSC sufficiently covers most environmental and governance issues in indicators, though chemicaluse, pest management and nutrient management are only partially covered. While the international
PEFC standard closely follows the FSC standard on environmental requirements, implementation of
the standard at national, regional level remains fragmented. There are significant qualitative
differences between various PEFC labels. For example, a number of EU countries continue to not
accept MTCS (Malaysia Timber Certification Scheme) certified timber, one of the national standards
endorsed by PEFC due to concern about certified operations being involved in forest conversion.
RSB sufficiently covers almost all aspects in indicators.94 Only chemical use and sustainable resource
extraction are partially covered: the most hazardous chemicals are not explicitly banned 95 andsustainable resource extraction is only covered implicitly by the requirement of “Conservation
Agriculture practice”.
RTRS also performs well against most indicators, with partial coverage of chemical use and nutrient
management: the most hazardous chemicals are not explicitly banned 96; nutrient management is
implicitly covered by “Principle 5 Good Agriculture Practice”. It seems there is no training opportunities
provided for users of the standard.
ISCC Plus covers the majority of the environmental issues, though pest management and sustainable
resource extraction: they are “minor must” requirements, i.e. the applicant not necessarily need tomeet these requirements as they are only required to meet 60% of all “minor must” requirements. The
governance of IPCC Plus is slightly weaker than other FSC, RSB and RTRS in terms of transparency
and multi-stakeholder engagement. 97 And there are different certification bodies who can giveaccreditation, making it difficult to harmonise the implementation of the standard.98
GGL was originally set up by the Dutch utility Essent and continues to have relatively low support
from various stakeholders. It is likely that with the launch of the Sustainable Biomass Partnership(SBP) its role will decrease and as a result it is unlikely that it will be suitable to include under the
Climate Bond Standard.

89 http://ic.fsc.org
90 http://pefc.org
91 http://www.greengoldcertified.org
92 http://www.sustainable-biomass.org
93 http://www.sustainablebiomasspartnership.org

8

http://www.biograce.net

94 Jinke van Dam Consultancy (2015). Inventory trends sustainability biomass for various end-uses; WWF (2013).

Searching for Sustainability Comparative Analysis of Certification Schemes for Biomass used for the Production of
Biofuels; IUCN (2013). Betting on Best Quality. A Comparison of Quality and Level of Assurance of Sustainability
Standards for Biomass, Soy and Palm oil.
95 WWF (2013). Searching for Sustainability Comparative Analysis of Certification Schemes for Biomass used for the
Production of Biofuels
96 Ibid.
97 Ibid.
98 Ibid.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

NTA8080 is another Dutch initiative, created following the adoption of the Cramer Criteria. Is generally
well regarded by stakeholders, but has low market share. While the environmental and social
requirements are relatively ambitious, implementation including auditing, transparency andaccreditation does not provide adequate confidence.
SBP is probably the most important initiative in Europe if we consider possible market share. The
SBP is a partnership of large European utilities that represent over 70% of the EU wood pellets market.
However the process was mainly industry driven, so the governance structure is not strong. Note that
the SBP is currently undergoing a transformation into a multi-stakeholder organisation where the newarrangement is expected to be implemented in early 2019.99 In due course the Bioenergy TWG will
re-assess the governance of the SBP to decide whether it should be included as one of the approved
standards. Other deficiencies of the SBP include lack of concrete, performance-oriented thresholds
and protections and thus little assurance regarding environmental or social protections in source
forests; little requirement on field verification of source forestry management; insufficient requirementson biodiversity, high conservation value forests, high carbon stock forests, water quality, harvest
sustainability, biomass removals to protect soils and habitats, conversion to plantations and nonforest.100
Another aspect the Bioenergy TWG recommends considering when selecting the different standards
to be leveraged by the Climate Bond Standard is the market share of various certification schemes.
The Climate Bond Standard aims to address the mainstream market, but it wants to do so by ensuring
robust implementation of the sustainability criteria. Market share of FSC, RSB, RTRS and ISCC Plus
are fairly high compared to other standards. More details can be found in Appendix 4.
The reports reviewed for this paper also found that there are significant differences between thevoluntary standards created specifically as a response to EU RED implementation and the multistakeholder processes developing sustainability standards independently from the legislativerequirements. The multi-stakeholder standards are, generally speaking, more ambitious when it
comes to the environmental and social criteria but also perform better on the process requirements.
Figure 5 below shows result of robustness analysis on pre-approved voluntary standards. Appendix
5 provides a summary of reasons to exclude other voluntary standards.
It should be noted that as discussed above, the Bioenergy Criteria are designed to be feedstock
agnostic. One implication of this is that they do not automatically exclude the use of palm oil as afeedstock. As the WWF pointed out, in order to achieve a more sustainable palm oil sector, real efforts
are needed to transform the entire industry toward sustainability, not just a niche group of sustainablesuppliers serving Western markets. Taking this approach, these Criteria should ensure that where
palm oil feedstock is used, palm oil production practices are sustainable – as evidenced bycertification under best practice standards including RSB, RTRS, FSC and ISCC Plus.
Proposal for approved best practice standards
Based on the discussion above, the TWG found that the RSB, RTRS, FSC and ISCC+ are sufficiently
covering the majority of the environmental issues and governance issues well. Therefore, the TWG

99 https://sbp-cert.org/news/sbp-governance-transition-process-consultation-launched
100 NRDC (2017). The Sustainable Biomass Program: Smokescreen for Forest Destruction and Corporate Non-Accounting

Ability.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

has chosen RSB, RTRS, FSC and ISCC+ as approved best practice standards under the Bioenergy
Criteria.
There are ongoing efforts to improve the compatibility of various standards, driven either bydevelopments related to the implementation of the EU RED or by efforts of various standards,
enjoying broad stakeholder support, under the umbrella of ISEAL.101 Therefore, the TWG will also
check every two years whether there are other standards or schemes that should be included in thepreferred voluntary standards in the Bioenergy Criteria.

Figure 5 Analysis on the robustness of approved best practice standards

Reference:
van Dam1.

Jinke

Consultancy (2015). Inventory trends sustainability biomass for various end-uses. 2. S2Biom (2015). Benchmark and gap
analysis of criteria and indicators (C&I) for legislation, regulations and voluntary schemes at international level and inselected EU Member States. 3. WWF (2013). Searching for Sustainability Comparative Analysis of Certification Schemesfor Biomass used for the Production of Biofuels. 4. IUCN (2013). Betting on Best Quality. A Comparison of Quality and Levelof Assurance of Sustainability Standards for Biomass, Soy and Palm oil.

101 ISEAL is a non-governmental organization whose mission is to strengthen sustainability standards systems for the

benefit of people and the environment.

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation

Option B – feedstock certified under a standard or a similar scheme where issuer can prove thestandard has sufficient requirements and thus is robust.
In cases where certification under one of the approved best practice standards is not a viable option,issuers will be able to demonstrate to the verifiers their compliance with the Criteria using otherstandards/certification schemes.
Issuer needs to provide: evidence that the proposed standard/scheme has sufficient requirement
about environmental impacts and governance, as shown in Table 13 and Appendix 3. That is, theissuer needs to check the proposed standard against Table 13 and Appendix 3 and demonstrate theproposed standard sufficiently covers the requirements in Table 13 and Appendix 3. A table similar
to Figure 5 can be submitted.
The TWG will review the evidence provided and decide whether the standards or scheme used by
the issuer is robust and sufficient to cover environmental and governance issues, and make a decisionon whether to approve the standard proposed by the issuer as one of the approved best practicestandards. Once approved, the issuer will be able to use the certification against the proposed
standard to demonstrate the compliance of their feedstock with the adaptation and resilience
requirements under the Bioenergy Criteria.
4.4.4

Requirement 3: Addressing food security risks

Bioenergy generation can create potential competition between feedstock for bioenergy and food.
Unless the feedstocks for bioenergy are grown on abandoned land or use residues that previously
had no economic value, liquid biofuel production places additional pressure on natural resources suchas land and water, which are needed for production of food and agriculture products as well. 102 It isestimated that an increase of 70% of global food production by 2050 is required to meet food demandof the world’s growing population.103 As the increase in arable land between 2005 and 2050 will only
be about 5%,104 using land for increased production of feedstock for bioenergy may pose risks to foodsecurity.
In order to reduce risks to food security, the TWG has decided to adopt the risk-based approach
under the RSB Food Security Assessment Guidelines.105 Under the RSB, operators are required toassess risks to food security in the region and locality and to mitigate any negative impacts that
result from their operations. And in food insecure regions, the operator is required to enhance thelocal food security of the directly affected stakeholders.106
Therefore, under the Bioenergy Criteria, issuers are required to first evaluate food security atnational level by checking latest International Food Policy and Research Institute’s Global Hunger
Index (GHI)107 to see whether their sourcing feedstock are produced in food insecure nations. If thefeedstock production is located in a country with low or moderate ranking on the GHI, there is nofurther requirement.
102 IPCC (2011). Special Report on Renewable Energy Sources and Climate Change Mitigation.
103 Bruinsma, J. (2009). The resource outlook to 2050: by how much do land, water and crop yields need to increase by

2050?
104 FAO (2008). The role of agricultural biotechnologies for production of bioenergy in developing countries.
105 http://rsb.org/the-rsb-standard/rsb-standard-tools-guidance/impact-assessment-guide/
106 RSB (2012). RSB Food Security Guidelines.
107 http://ghi.ifpri.org

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Otherwise, the issuer needs to assess whether the production of the sourcing feedstock is likely tohave impacts on food security, and to establish corresponding mitigation and enhancement measures
if the impacts are significant. Issuers can follow guidelines such as RSB Food Security Assessment
Guidelines and FAO’s Bioenergy and Food Security Assessment108, or any other robust and publicly
available guidance.
Note that there is no need for issuers whose feedstock already obtained certification from RSB (which
covers food security issues), to meet this requirement. In this case, verifiers only need to verify thatthe issuer’s feedstock is all certified under RSB.

4.5

Reporting Requirement

4.5.1

Reporting to demonstrate compliance with the Criteria

In accordance with the Climate Bonds Standard, it is the issuers responsibility to provide to theapproved verifier the information necessary to demonstrate compliance with each requirement of theCriteria. Per the requirements outlined above, it is therefore necessary for the issuer to provide theapproved verifier with:
•

•

•
•
•
•

•

Life cycle assessment (LCA) of GHG emissions of biofuel/biomass produced/used, including
scope, tool(s), GHG emissions allocation methodology, and the result of GHG emissions (notapplicable for facilities producing electricity from biofuel/biomass).
LCA of GHG emissions of electricity produced, including scope, tool(s), GHG emissions
allocation methodology, and the results of GHG emissions in terms of gCO2e/kWh (onlyapplicable for facilities producing electricity from biofuel/biomass).
Energy efficiency of facilities (only applicable for heating/cooling, and co-generation facilities
using biofuel/biomass).
Certification against the RSB iLUC module or evidence and documentation required under the
RSB iLUC optional module to demonstrate the compliance with the module.
Assessment against the Adaptation & Resilience Checklist.
Certification of the feedstock against one of the approved best practice standards; orassessment of the proposed standard/scheme against Table 13 and Appendix 3, andcertification of the feedstock against the proposed standard/scheme.
Information about the GHI ranking of the country where the feedstock production is, and if
applicable, assessment of impacts on food security and the corresponding mitigation plan (notapplicable to operators already obtained certification from RSB).

Note that when the bond portfolio includes several separately identifiable projects or groups of assets,
these conditions must be met for each separately identified project or asset grouping. Bond issuers
should determine these project boundaries, which may be based on geographical and/ or supply chain
linkages.
4.5.2

Additional reporting encouraged, but not mandatory for certification

In the interests of transparency and disclosure, issuers of Certified Climate Bonds are encouraged to
publically disclose the following in respect of the assets and use of proceeds incorporated in thatissuance. This is for transparency purpose only. There is no need for verifier to check this information.
108 http://www.fao.org/energy/bioenergy/bioenergy-and-food-security/assessment/en/

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•
•
•
•
•
•
•

4.6

Project location and size, including description of ecosystem in proximity to planned
installations;
Projected lifespan of the asset/project;
Key stakeholders involved, including other users of the area and surrounding area (sea, landor air depending on what is applicable) of the facility(ies);
Description of project activities including details on installation, operation anddecommissioning activities;
Expected/current facility capacity and generation during and after the life of the bond;
Details of where the energy generated is being fed into, and estimated impact on grid mix;
The planning standards, environmental regulations and other regulations that the project has
been required to comply with.

Updating the Criteria

The Bioenergy TWG will revisit these requirements and make adjustments to the requirements if
necessary. Where amendments are made, they will not be applied retrospectively to any bonds
already certified under prior versions of the Criteria.

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5. Appendix
Appendix 1 Bioenergy Working Group Member
Bioenergy Technical Working Group (TWG) Members
Round 2 development
Dr. Ausilio Bauen, Director, E4Tech.
Barbara Bramble, Vice President, International Conservation and Corporate Strategies, National
Wildlife Federation.
Aziz Elbehri, Senior Economist, Trade and Markets Division, Food & Agriculture Organisation(FAO).
Dr Birka Wicke, Assistant Professor, Copernicus Institute of Sustainable Development - Energy &Resource, Utrecht University.
Jack (John) N Saddler, Professor, Department of Wood Science, The University of British Columbia.
Uwe R. Fritsche, Scientific Director, International Institute for Sustainability Analysis and Strategy.
Luc Pelkmans, Project Manager Bioenergy & Biomass, VITO.
Dr Thomas Buchholz, Forest and Agriculture, Spatial Informatics Group (SIG).
Round 1 development
László Máthé, Accreditation Program Manager and Lead Author, Accreditation Services
International.
Molly Jahn, Professor, University of Wisconsin-Madison.
Uwe R. Fritsche, Scientific Director, International Institute for Sustainability Analysis and Strategy.
Luc Pelkmans, Project Manager Bioenergy & Biomass, VITO.
Dr Thomas Buchholz, Forest and Agriculture, Spatial Informatics Group (SIG).
Shay Reza, Co-Founder, Arise International.
Bioenergy Industry Working Group (IWG) Members
Artur Yabe Milanez, Director of Biofuels, BNDES
Brad C. Friedman, Ramirez & Co., Inc.
Bryan Sherbacow, CEO, AltAir Fuels
Christian Carraretto, EBRD
Cindy Thyfault, Founder & CEO, Wester Trade ResourcesDavid Fairchild, Principal Consultant, Assurance and Sustainability Services, Bureau Veritas UK
David Kemp, Director, Project & Infrastructure Finance Fixed Income, M&G Investment
Dimitri Koufos, EBRD
Elena Schmidt, Standards Director, RSB
Gerard J.Ostheimer, PhD. Senior Advisor, Below50
Mark Robinson, Manager, Sustainability Services, DNV GL Business Assurance
Matthew Brander, University of Edinburgh
Melanie Eddis, Partner, ERM Certification and Verification Services
Michael Brown, Technology Advisor, Ryze Capital Partners, LLC
Michael Burns, Head of Biorefining Business Development, Novozymes North America Inc.
Mike Cao, Managing director, Shanghai Mu Yi Investment Advisors Ltd.
Monica Reid, Kestrel Consulting
Nikos Ntavos, Manager, Cluster of Bioenergy & Environment of Western Macedonia
Noim Uddin, Senior Consultant, CPMA International
Paul Curtis-Hayward, Guy Butler Limited

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Steve Csonka, Executive Director, CAAFI
Terri Smalinsky, Managing Director, Ziegler Investment Banking
Wenqin Lu, China Energy Conservation and Environmental Protection (CECEP) Consulting

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Appendix 2 Climate Bonds Standard & Certification Scheme
The Climate Bonds Standard and Certification Scheme is a Fair Trade-like labelling scheme for bonds.
It is designed as an easy-to-use tool for investors and issuers to assist them in prioritising investmentsthat truly contribute to addressing climate change. The Standard is a public good resource for themarket.
The Climate Bonds Standard is made up of two parts; (i) the parent standard detailing management
and reporting processes (see Climate Bonds Standard V2.1) and (ii) a suite of sector Criteria
detailing the requirements assets must meet to be eligible for certification.
The Certification Scheme requires issuers to obtain independent verification, pre- and post-issuance,
to ensure the bond meets the requirements of the Climate Bonds Standard (see diagram below).

The Climate Bonds Standard has been developed based on public consultation, road testing, review
by the assurance roundtable and expert support from experienced green bond market actors. The
Standard is revisited and amended on an annual basis in response to the growing green bond market.
Sector specific Criteria, or definitions of green, are developed by Technical Working Groups (TWGs),
made up of scientists, engineers and technical specialists. Draft Criteria are presented to Industry
Working Groups before being released for public comment. Finally, Criteria are presented to the
Climate Bonds Standard Board for approval.

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To date, Sector Criteria for wind, solar, geothermal, road transport, water, buildings and forestry areavailable for certification. Sector Criteria for hydropower, marine, waste management, agriculture,and shipping are under development. Work groups for energy distribution & management, ICT, andindustrial energy efficiency will be launched soon.
As of December 2017, USD31.2bn green bonds have been successfully certified against the
Climate Bonds Standard and issued in the market, including those from issuers ANZ, New YorkMTA, SNCF and San Francisco Public Utilities Commission. In 2017, 14% of green bonds issued
globally were Certified Climate Bonds.

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Appendix 3 Areas to be considered for determining the robustness of best practicestandards
Priority areas protection
The area of land to be utilized does not contain, and is not suspected of containing,
primary forest or High Conservation Value (HCV) areas. The land area is not being
converted from native ecosystems, such as forests to a plantation or other land use.

Environmental

GHG emissions
Efforts are made on the farm to reduce fossil fuel emissions and increase carbon
sequestration. Techniques can include soil carbon management, restoration of native
vegetation, and eliminating in-field burning practices.
Indirect land use
Possible unintended consequences of indirect land use change have been assessed andshow that the crop generates low indirect land use change risks (e.g., produced fromagricultural waste/byproducts, produced on degraded lands, or production is integrated
with food production).
Chemical use
Agrochemicals are properly used on site, judiciously and in a targeted fashion using
available expertise. There is no use of hazardous agrochemicals listed as Classification I
or II in the World Health Organization's Recommended Classification of Pesticides by
Hazard. Agrochemicals are prepared and applied by trained personnel with appropriate
protective gear and in accordance with the law and producer guidelines - and not bychildren or pregnant women. Potential impacts on local communities of chemical run-off
and spraying are assessed and managed.
Pest management
An Integrated Pest Management (IPM) plan is developed and implemented, ideallyincorporating biological controls. An Integrated Weed Management plan is developed andimplemented, ideally including cultural and biological controls, appropriate rates of preand post-emergent applications, and appropriate altering of active ingredients.
Nutrient management
A Nutrient Management Plan focused on optimal uptake and minimal loss of nutrientshas been developed and is implemented. The plan can include: soil and foliage testing(regularly and especially prior to fertilizer applications), use of variable rate technologies
for fertilizer application, crop rotation, and use of cover crops and filter strips.
Soil management
A Soil Management Plan is developed and implemented with a focus on soil productivity,
including retention of soil biomass levels, soil structure, salinity, pH, and carbon
sequestration. The plan can outline crop and geographically appropriate practices suchas no-till, only planting on suitable slopes, use of cover crops, crop rotation, tree hedges,
and contour planting, etc. The plan should also include adequate protection of riparian
areas.

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Water management
A complete assessment of water resource requirements and discharge impacts should
be conducted, taking into consideration crop needs, soil water holding capacity,hydrological conditions, downstream human and environmental needs and uses, andimpacts that the water use and discharge will have on the watershed, community health,and regional ecology. This is especially important in water stressed areas. A Water
Management Plan is in place that addresses relevant risks and includes concretemeasures to protect ground water or local water bodies.
Genetic diversity management
Species selection e.g. no introduction of invasive alien species that disrupt native genetic
diversity, or that are not suitable for current or projected future ecological conditions
Sustainable resource extraction
Resources are managed to prevent overexploitation
Waste management
Minimising waste from spoilage, utilisation of by products, maximisation of waste toenergy opportunities
Compliant with ISEAL's code of good practiceMulti-stakeholder in involvement in standard development process

Governance

Multi-stakeholder participation in the standards system
Scientific input in development of standard
Transparency in public reporting
Transparency in communication of the standards documents and processes
Complaints and appeals process
Regular reviews and revisions of the standard
Standard gives accreditation
Stakeholder consultation in certification and auditing process
Audits required annually
Audit sample size specified
Sanction mechanisms in place
Training of auditors
Training opportunities for users of the standard

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Appendix 4 Market Share of Various Voluntary Standards
Standards –liquid biofuels
RSPO
RTRS
RSB
Bonsucro
ISCC
NTA8080
Greenergy
Red Tractor

SQC
2BSvs
REDcertRBSA

Standards –solid biomass
FSC
PEFC
NTA8080
RSB
SBP

Market share
Over 1000 certificates, representing approx. 15% of the global market andcovering over 1,7 million hectares of plantations (RSPO n.d.).
Over 480 thousand hectares producing around 873 thousand tonnes ofcertified soy (RTRS n.d.).
15 valid certificates, slowly growing market share (RSB n.d.).
38 production certificates, representing 3,6% of global sugarcane surface,over 2,6 million m3 of certified ethanol (Bonsucro n.d.).
Over 2600 certificates, no further details on area or volumes (ISCC n.d.).
31 certificates (including biofuels, solid biomass, biogas) no further details withregards to volumes or certified area (NTA8080 n.d.).
No publicly available information.
There are over 78,000 UK farmers (the majority of these is for foodproduction) certified, but no information with regards to biofuel share, area orvolumes (RED Tractor n.d.).
No publicly available information.
635 certificates, no further information with regards to area or volumes (2BSvs
n.d.)
Approximately 2000 certificates, but no further information about area orvolumes (REDcert n.d.).
No publicly available information.

Market share
Over 180 million hectares of certified forests, in 80 countries and nearly 1300
certificates (FSC n.d.).
220 million hectares of certified forests (PEFC n.d.)
See above.
See above.
Over 100 certificate holders.

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Appendix 5 Reasons for exclusion of other voluntary standards
SchemeReason for exclusion
TWG view

Literature review

ISCC EU

Medium quality.

Only partially covers criteria on
environmental and social management
system, pest management, soil
management, water; no criteria on GHG
emissions; poor requirement on
biodiversity and conservation (IUCN,
WWF).

RSPO

2BSvs

The governance due tooverweighting of local
industry; Land use anddeforestation issues are notcovered.
Low quality.

RBSA

Market share N/A.

Greenergy

Medium quality; market share
N/A.

Ensus
Red Tractor

NTA 8080

There are over 78,000 UK
farmers (the majority of theseis for food production)
certified, but no information
with regards to biofuel share,area or volumes.
Low market share,
implementation including

Partially covers soil and water on voluntarybasis, not cover legality, land tenure andlabour rights (Jinke van Dam Consultancy);
Does not cover soil and agrochemical
issues, water quality and management
issues; no criteria on highly biodiverse
grassland; no/poor criteria on biodiversity;
not adequately address any of the labour
related criteria (IUCN);
The majority of the environmental andsocial issues are not covered; a few
partially covered. Not perform good interms of governance (WWF)The majority of the environmental andsocial issues are not covered; a few
partially covered. Not perform good interms of governance (WWF)No requirement on GHG emissions;partially covers soil, pest and water
management, biodiversity (habitat
protection and conservation) issues; poor
requirements on social and governanceissues (S2Biom, IUCN, WWF).
Poor/no requirements on all environmental,social and governance issues (WWF).
Poor requirements on governance andsocial issues, water, biodiversity andconservation, soil and waste issues (IUCN,WWF).

Poor requirements on soil management,
pest management, water, andMarch 201958

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GGL

PEFC

Proterra

Bonscucro

SBP

auditing, transparency andaccreditation does not provide
adequate confidence.
Relatively low support fromvarious stakeholders. It is
likely that with the launch of
the Sustainable Biomass
Partnership (SBP) its role will
decrease and as a result it isunlikely that it will be suitable
to include under the Climate
Bond Standard.
Implementation of thestandard at national, regional
level remains fragmented.
There are significant
qualitative differences
between various PEFC
labels.
Medium quality

Application is small, and it isdriven by large commodity
chain for food sector, so its
ambition level iscomparatively low.
The governance is not strong;
the requirements onenvironmental issues are notsufficient.
Note that the SBP is currently
undergoing a transformation
into a multi-stakeholder
organisation where the newarrangement is expected to
be implemented in early2019.109 In due course the
Bioenergy TWG will reassess the governance of the
SBP to decide whether itshould be included as one of
the approved standards.

agrochemicals and fertilisers, and social
issues (health and risks).
Partially covers legality and waste issues;poor requirement on social issues (Jinke
van Dam Consultancy, S2Biom).

No requirement on GHG issues; only
partially covers water issues (Jinke van
Dam Consultancy, S2Biom).

Partially covers water and soil, GHG,
biodiversity and conservation issues; poor
requirements on social issues (IUCN).
The majority of the environmental andsocial issues are only partially covered or
not covered (WWF, S2Biom).

The process was mainly industry driven, so
the governance structure is not strong.
Other deficiencies include lack of concrete,
performance-oriented thresholds andprotections and thus little assurance
regarding environmental or social
protections in source forests; little
requirement on field verification of source
forestry management; insufficientrequirements on biodiversity, highconservation value forests, high carbon
stock forests, water quality, harvest
sustainability, biomass removals to protect
soils and habitats, conversion toplantations and non-forest.

Reference: 1. Jinke van Dam Consultancy (2015). Inventory trends sustainability biomass for various end-uses. 2. S2Biom(2015). Benchmark and gap analysis of criteria and indicators (C&I) for legislation, regulations and voluntary schemes atinternational level and in selected EU Member States. 3. WWF (2013). Searching for Sustainability Comparative Analysis
of Certification Schemes for Biomass used for the Production of Biofuels. 4. IUCN (2013). Betting on Best Quality. A
109 https://sbp-cert.org/news/sbp-governance-transition-process-consultation-launched

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Climate Bonds Standard Bioenergy Criteria – Background Paper for Public Consultation
Comparison of Quality and Level of Assurance of Sustainability Standards for Biomass, Soy and Palmoil. 5. NRDC (2017).
The Sustainable Biomass Program: Smokescreen for Forest Destruction and Corporate Non-Accounting Ability.

Appendix 6 Summary of Public Consultation Responses

Feedback

Response

The use of a ‘feedstock neutral approach’ is Regarding the facilities which use wood as aproblematic as burning trees for biomass energy feedstock, we have additional requirements in
is not carbon neutral.
place to ensure that carbon stock ismaintained or enhanced within the decade.

Endorsed GHG calculation tools BIOGRACE II
and UK Solid and Gaseous Biomass Carbon
As aboveCalculator methodologies both ignore theemissions of combustion of biomass.

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On emissions associated with the forest
sources of feedstock, the models mandateaccounting for land use change emissions. Thisis seriously lacking as forest conversion to tree
plantations and clearcutting of forests that remain
in a logging cycle do not qualify as LUC.

The carbon stock of the forests is managedwith a separate requirement, the forest
management plan that requires carbon stocks
to be maintained or enhanced within a decade

The Bioenergy TWG has agreed to go further
than the existing regulations such as EU RED
The established GHG emissions threshold forto ensure that bioenergy is consistent with theelectricity generators is significantly lower thanneed to make the power sector as a whole net
the agreed value in EU RED II.
zero carbon by 2050, as required to stay within
the 2D global warming target.
Issuers need to decide what information theywould disclose in the documentation, andWhat would be considered “equivalentverifiers need to decide whether the
documentation” to a forest management plan?
documentation is sufficient for them toevaluate the compliance of the issuer.
The TWG has decided to use Forest
Management Plan as this approach is morepractical than including carbon stock changes
The requirement to collect a forest management in LCA or a Carbon Payback Period; and moreplan for each source forest may be an onerous robust and consistent compared to having no
requirement to implement.
additional requirements as covered by thebest practice standards. It is a conservative
approach but necessary to address concerns
over carbon debts.
The TWG chose the RSB, RTRS, FSC and
ISCC+ as they are sufficiently covering mostof the environmental issues and governanceissues. The FSC scores at the highest level in
If some indicators are only partially covered, why
all aspects except three (excluding GHG
is FSC still considered compliant?
emissions as that is covered separately inthese criteria), and even for those three thereis particial coverage. Therefore, overall, it isdeemed sufficiently robust.
The TWG reviewed many schemes with theintention to give as broad a reach to these
Criteria as possible. However, only these fiveschemes were deemed sufficiently robust.
Still, the TWG has left open the option for an
Many feedstock certification schemes do notissuer to present a case for an alternative
have sufficient coverage to be used in all regions
scheme to the TWG for approval, with thewhere bioenergy is used.
intention of adding as many schemes as
possible so long as they are sufficiently robust.
The TWG will also check every two years
whether there are other standards or schemesthat should be included.

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The TWG have now decided to require
Addressing food security is not a requirement bioenergy assets and projects to identify foodbut a voluntary assessment.
security risk, if any; and have a plan to address
it when the risk is significant.
This has now been amended. In the forest
management plan, the TWG has decided touse a ten-year timeframe period for calculating
carbon stocks with continuous forestry
There are no timeframes specified when inventory. This time period is based on thecalculating the carbon debt
European Academics Science Advisory
Council endorsement. Some fluctuations
within those 10 years due to harvest and otherevents are acceptable but on average, it
should not decline.

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