Blog Post

Transparency is the key to achieving SBP’s success

by User Not Found May 11, 2016

Wood_Pellet_productionThe Sustainable Biomass Partnership is poised to break down one of the biggest barriers to liquidity and growth in the industrial biomass markets, creating a universal certification framework for sustainably-sourced biomass. Already the SBP has gained traction, with 22 parties awarded the certification since September 2015 and more than 70 more in the certification pipeline.

Furthermore, the SBP is supported in many of the countries which have implemented national sustainability criteria, including the UK and Denmark, and is likely to have an important role as part of the Netherlands’ burden of proof – though the Dutch require sustainable forest management to be proven at the forest management unit (FMU) level, rather than on a regional level as is demonstrated with SBP.

Unfortunately, some cracks among stakeholders have emerged. On 1 April, the SBP announced a fee structure applicable to certification bodies, suppliers and intermediaries. Suppliers will pay a fee of €0.15 for every tonne of wood pellets (in line with ENplus), or €0.08 for every tonne of wood chips, sold with an SBP “claim”. The fee would be paid quarterly in advance based on a projection of sales, and will be implemented from 1 October 2016 for pellets and 1 April 2017 for chips. Traders, meanwhile, will pay an annual fee based upon the annual volume of biomass traded, ranging from zero to €25k, and certification bodies will be charged €3k per year to maintain their “approved” status.

This move has irritated some suppliers, supplier associations and traders which claim that they were not consulted nor informed prior to the decision. The SBP was founded in 2013 as a successor to the old Initiative of Wood Pellet Buyers (IWPB) group – which created the industrial pellet specifications used today. Like the IWPB, the SBP board is made up of high-level executives of all the major biomass-consuming utilities in Europe, but fails to have any representation from the supply side.

However, the SBP maintains that a move towards a fee structure was “well-signposted” from the early days of its implementation. To get the certification to market quickly, the partnership initially approved the certification bodies itself and did not charge a fee for the service – but always intended to transition to utilising accredited certification bodies to bring it in line with other schemes such as FSC and PEFC. This comes at a cost. In addition, several suppliers in the SBP pipeline were consulted individually about the fee implementation, and according to the SBP most of the communications regarding the announcement are for clarification rather than complaint.

A fee structure for the certification does not seem unreasonable, but the SBP must be careful not to jeopardise the scheme by alienating those that will be supporting and adopting the certification. Communication and transparency are vital in this industry, which has the wider job of getting the public and policymakers on side to ensure the long-term future of the industry. A single tool to universally provide evidence of the sustainability of biomass could go a long way to achieving that.

Stakeholders across the whole supply chain have long been in favour of a single, voluntary framework which could boost liquidity and trading – something which is sorely needed in the market. But for the SBP to achieve its aim of being the universally-recognised pellet certification scheme for industrial markets, its implementation must unite suppliers, consumers, policymakers and intermediaries alike. 

The SBP aims to address this by – soon – publishing its full working structure which will give details of the process by which certificates and certification body approvals are issued. Hopefully this will allay some concerns so that the scheme can realise its potential of a credible, robust certification scheme which can be adopted by the whole market.

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