3.1_ISCC CORSIA_Traceability and Supply Chain Certification for CEF.pdf

Traceability and Supply Chain Certification for CORSIA Eligible Fuels Christian Scherhag, Senior Sustainability Manager, ISCC System GmbH ISCC CORSIA Training, Online, 25 September 2024 © ISCC System GmbH: For personal use only. Reproduction and distribution is pr...

Traceability and Supply Chain Certification for CORSIA Eligible Fuels Christian Scherhag, Senior Sustainability Manager, ISCC System GmbH ISCC CORSIA Training, Online, 25 September 2024 © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 1  01 General Supply Chain Requirements 02 Group Certification 03 Traceability 04 Mass Balance 05 Co-Processing © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 2  The topics of this presentation are mainly covered in the ISCC CORSIA Document 203 ▪ Please see ISCC CORSIA Document 203 “Traceability and Chain of Custody” for more detailed information on the topics presented ▪ The requirements for traceability and chain of custody are generally the same for ISCC CORSIA and ISCC CORSIA PLUS In general, references made to ISCC CORSIA in this presentation apply to ISCC CORSIA PLUS as well Differences between the two schemes are explicitly stated © ISCC use © ISCC System GmbH: For personal System only.GmbH: For personal Reproduction use only. Reproduction and distribution is prohibited. and distribution is prohibited. 3  General Supply Chain Elements © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 4  A simplified supply chain for CORSIA eligible fuels Feedstock sourcing and processing SAF production Blending and distribution Agricultural crops and crop Farm/Plantation First Gathering residues Point Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Waste, (e.g Harbour) Plant Blend Point Trader residue or (Trader) Point of Origin Collecting by-product Point © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 5  Short description of supply chain elements Operations buying CORSIA eligible Operations cultivating CORSIA biomass directly from eligible crops or where eligible farms/plantations for agricultural crop residues occur further processing and/or trading Agricultural crops and crop Farm/Plantation First Gathering residues Point Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Waste, (e.g Harbour) Plant Blend Point Trader residue or (Trader) Point of Origin Collecting by-product Point © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 6  Short description of supply chain elements Operations buying CORSIA eligible Operations cultivating CORSIA biomass directly from eligible crops or where eligible farms/plantations for agricultural crop residues occur further processing and/or trading Agricultural crops and crop Farm/Plantation First Gathering residues Point Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Waste, (e.g Harbour) Plant Blend Point Trader residue or (Trader) Point of Origin Collecting by-product Point Operations collecting Operations where CORSIA waste, residues or by- eligible waste, residues or by- products directly from products occur or are generated points of origin for further processing and/or trading © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 7  Short description of supply chain elements Operations buying CORSIA eligible Operations cultivating CORSIA Operations trading biomass directly from eligible crops or where eligible and/or storing CORSIA farms/plantations for agricultural crop residues occur eligible material further processing and/or trading Agricultural crops and crop Farm/Plantation First Gathering residues Point Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Waste, (e.g Harbour) Plant Blend Point Trader residue or (Trader) Point of Origin Collecting by-product Point Operations collecting Processing units are operations Operations where CORSIA waste, residues or by- converting input materials by eligible waste, residues or by- products directly from changing their physical and/or products occur or are generated points of origin for chemical properties. further processing Includes units producing neat and/or trading CORSIA eligible fuel © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 8  Short description of supply chain elements Operations buying Operations blending Operators of CORSIA eligible Operations cultivating CORSIA Operations trading neat CORSIA eligible aeroplanes. biomass directly from eligible crops or where eligible and/or storing CORSIA fuel with aviation fuel. Provide Emissions farms/plantations for agricultural crop residues occur eligible material Certified as storage Report to state where further processing facility they are registered and/or trading Agricultural crops and crop Farm/Plantation First Gathering residues Point Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Waste, (e.g Harbour) Plant Blend Point Trader residue or (Trader) Point of Origin Collecting by-product Point Operations collecting Processing units are operations Operations trading Operations where CORSIA waste, residues or by- converting input materials by SAF, up to supplying eligible waste, residues or by- products directly from changing their physical and/or airlines with fuel at the products occur or are generated points of origin for chemical properties. airport. May also further processing Includes units producing neat conduct fuel loading and/or trading CORSIA eligible fuel and storing © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 9  Individual certification of supply chain elements under ISCC CORSIA and ISCC CORSIA PLUS Agricultural crops and crop Farm/Plantation First Gathering residues Point Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Waste, (e.g Harbour) Plant Blend Point Trader residue or (Trader) Point of Origin Collecting by-product Point − According to ICAO, certification up to and including the SAF blend point is required to claim SAF as CORSIA eligible fuel − For downstream traders certification is voluntary © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 10  Overview of certification requirements General supply chain certification requirements ✓ Management system Farm/Plantation audit requirements ✓ Traceability documents and mass balance ✓ ISCC CORSIA or ISCC CORSIA PLUS ✓ Life Cycle GHG Emissions Sustainability Requirements (not applicable for trader/storage/blending) Agricultural crops and crop Farm/Plantation First Gathering residues Point Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Waste, (e.g Harbour) Plant Blend Point Trader residue or (Trader) Point of Origin Collecting by-product Point Point of origin audit requirements Additional specific supply chain certification requirements ✓ Verification of raw material as genuine ✓ First Gathering Points/Collecting Points: Group certification of waste, residue or by-product supply base (farms/plantations or points of origin) ✓ Processing units: Conversion factor for company internal processes © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 11  Overview of certification requirements General supply chain certification requirements ✓ Management system Farm/Plantation audit requirements ✓ Traceability documents and mass balance ✓ ISCC CORSIA or ISCC CORSIA PLUS ✓ Life Cycle GHG Emissions Sustainability Requirements (not applicable for trader/storage/blending) Agricultural crops and crop Farm/Plantation First Gathering residues Point Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Waste, (e.g Harbour) Plant Blend Point Trader residue or Point of Origin Collecting by-product Point Point of origin audit requirements Additional specific supply chain certification requirements ✓ Verification of raw material as genuine ✓ First Gathering Points/Collecting Points: Group certification of waste, residue or by-product supply base (farms/plantations or points of origin) ✓ Processing units: Conversion factor for company internal processes © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 12 Reminder: The application of ISCC CORSIA PLUS is restricted to Farms/plantations, Central Offices of Farms/plantations and First Gathering Points © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 13 Transparency on other sustainability certification schemes used ▪ Economic operators have to disclose the names of all certification schemes they are participating ▪ Relevant information and documents have to be provided to auditor, including: Audit reports Mass balances, sustainability declarations ▪ Important measure to prevent multiple accounting of CORSIA eligible material and/or scheme-hopping ▪ SCS that are recognised by ICAO in the context of CORSIA may be accepted under ISCC CORSIA Deliveries of ISCC EU or ISCC PLUS certified materials cannot be accepted as CORSIA eligible as those schemes are not recognised by ICAO in the context of CORSIA © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 15  Group Certification © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 16  Group certification under ISCC CORSIA and ISCC CORSIA PLUS – Overview ▪ Definition of group certification: The practice of organising individual producers into structured groups and partly shifting responsibility from external audits to internal inspections ▪ Group certification applicable for: Farms/plantations Points of origin for waste, residues and by-products Storage facilities (part of a logistic network) ▪ Benefits of group certification: Considerable reduction of certification effort and cost One external annual audit for head of the group Only a sample of group members subject to audit ▪ Head of group is responsible for: Group members’ compliance with ISCC CORSIA/CORSIA PLUS requirements Implementation of the internal group management system © ISCC use © ISCC System GmbH: For personal System only.GmbH: For personal Reproduction use only. Reproduction and distribution is prohibited. and distribution is prohibited. 17 Self-declarations are crucial under the group certification approach to ensure traceability of CORSIA eligible raw material to its origin ▪ Self-declarations: Ensure the traceability of the CORSIA eligible material up to its origin Have to be completed by farms/plantations and points of origin covered under the group certification approach Example: Template of an ISCC CORSIA ▪ By signing the self-declaration the group member confirms: self-declaration for Declares compliance with the ISCC CORSIA/ISCC CORSIA PLUS farms/plantations requirements located within the EU Confirms the type of raw material provided as CORSIA eligible Grants access to its premises to external auditors ▪ Templates of self-declarations will be provided by ISCC for: Farms/plantations − For ISCC CORSIA PLUS separated for farms located inside or outside the EU Points of origin for waste, residues, by-products © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 21 External audits of group members: Calculating the sample size Calculating the sample size: s = r x √n Relevant group members: ▪ Minimum sample size: √n s = Sample size ▪ Rounding up of “s” is possible if result of calculating the sample size is a decimal number Risk level Risk factor ”r” r = Risk factor based on the Regular 1.0 auditors risk assessment Medium 1.5 High 2.0 Relevant group members: n = Total number of group members ▪ For First Gathering Points: All farms/plantations that signed self-declaration ▪ For Collecting Points: All points of origin that signed a self-declaration and are generating more than 10 mt of a waste/residue/by-product per month © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 22  Traceability © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 27  Traceability of the origin and distribution of CORSIA eligible fuel is ensured through sustainability declarations Agricultural crops and crop Farm/Plantation First Gathering residues Point Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Waste, (e.g Harbour) Plant Blend Point Trader residue or (Trader) Point of Origin Collecting by-product Point Self- Sustainability Sustainability Sustainability CORSIA CORSIA CORSIA Declaration Declaration Declaration Declaration eligible fuel eligible fuel eligible fuel information* + information* + information* + PoS** PoS** PoS** *Additional information for CORSIA eligible fuel according to ICAO Standards and Recommended Practices, Annex 16, Volume IV ** PoS = Sustainability Declaration for SAF © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 28 Sustainability declarations contain all relevant information to demonstrate compliance with the CORSIA sustainability criteria (I) Overview of information requirements for sustainability declarations General information – Related to the specific Product related information – Forwarded transaction parties through the entire supply chain ▪ Name, address, certification scheme and certificate ▪ Type of sustainable material, including raw material number of the supplier ▪ Country of origin of raw material ▪ Name and address of recipient ▪ Life cycle emissions information ▪ Unique number of sustainability declaration ▪ Scope of certification of the raw material ▪ Related contract number Applicable statements for agricultural biomass or waste/residue/by-product) ▪ Date and place of dispatch of the CORSIA eligible material ▪ Claims (if applicable) ▪ Quantity of the CORSIA eligible material © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 29 Sustainability declarations contain all relevant information to demonstrate compliance with the CORSIA sustainability criteria (II) Product related information: Scope of the raw material certification Statements for biomass from agricultural, Statement for waste, residues aquaculture, fisheries and forestry and their and by-products residues: ✓ “The raw material meets the definition of waste, ✓ “The raw material complies with the sustainability residue or by-product and is not directly derived from principles according to ISCC CORSIA PLUS”* agriculture, aquaculture, fisheries or forestry” OR ✓ “The raw material complies with the CORSIA sustainability principle to protect land with high carbon ▪ Please note stock”** The first certified element in the supply chain (First Gathering Point or Collecting Point) ADDITIONALLY (AND IF APPLICABLE) selects the applicable statement for the raw ✓ ”The raw material was additionally certified according material. This statement has to be forwarded to the low LUC risk approach”*** through the supply chain *Statement only applicable for agricultural biomass certified under ISCC CORSIA PLUS **Statement applicable under ISCC CORSIA *** Statement applicable under ISCC CORSIA and ISCC CORSIA PLUS but only if the raw material was certified according to the l ow LUC risk approach © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 30 Sustainability declarations contain all relevant information to demonstrate compliance with the CORSIA sustainability criteria (III) Product related information: Claims “ISCC CORSIA PLUS Compliant” ”CORSIA Compliant” ▪ Claim means that the entire upstream supply chain is ▪ Claim means that the upstream supply chain is certified ISCC CORSIA PLUS certified under a CORSIA-recognised SCS* ▪ Operator can only make the claim if an equivalent ▪ Incoming CORSIA eligible material without any claim amount of material with the claim “ISCC CORSIA PLUS can be considered “CORSIA Compliant” Compliant” was received ▪ It is NOT possible to forward “CORSIA Compliant” ▪ It is possible to forward ”ISCC CORSIA PLUS material with the claim “ISCC CORSIA PLUS Compliant” material with the claim “CORSIA Compliant” Compliant” ▪ Application of the claim is voluntary ▪ Application of the claim is voluntary *This claim is also applicable if the raw material was certified under ISCC CORSIA © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 31 Accepting and forwarding sustainable material under ISCC CORSIA PLUS and ISCC CORSIA (I) – Start of the supply chain (sourcing of raw material) ISCC CORSIA PLUS certified FGP ▪ Receives biomass from farms that fulfil the six ISCC Sustainability Principles* ISCC CORSIA PLUS Material ▪ FGP supplies ISCC CORSIA PLUS Farm/Plantation First Gathering Point Material into the supply chain fulfills the six ISCC CORSIA PLUS ▪ Statement on the sustainability ISCC Sustainability Principles certified declaration: “The raw material complies with the sustainability principles according to ISCC CORSIA PLUS” ISCC CORSIA certified FGP ▪ Receives biomass from farms that fulfil the two CORSIA Sustainability Criteria ISCC CORSIA Material ▪ FGP supplies ISCC CORSIA Material Farm/Plantation First Gathering Point into the supply chain fulfills the two ISCC CORSIA ▪ Statement on the sustainability CORSIA Sustainability Criteria certified declaration: “The raw material complies with the CORSIA sustainability principle * The ISCC Sustainability Principles cover the CORSIA Sustainability Criteria to protect land with high carbon stock © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 32 Accepting and forwarding CORSIA eligible material under ISCC CORSIA PLUS and ISCC CORSIA (II) – In the supply chain ISCC CORSIA PLUS certified unit ▪ Can accept deliveries of ISCC CORSIA ISCC CORSIA PLUS Material ISCC CORSIA PLUS Material PLUS materials and ISCC CORSIA/CORSIA compliant materials HVO Plant ▪ Can forward of ISCC CORSIA PLUS ISCC CORSIA Material* ISCC CORSIA PLUS ISCC CORSIA Material materials and ISCC CORSIA/CORSIA certified compliant materials** ▪ Materials must be kept in separate mass balances ISCC CORSIA certified unit ▪ Can accept deliveries of ISCC CORSIA ISCC CORSIA PLUS Material ISCC CORSIA PLUS Material PLUS materials and ISCC CORSIA/CORSIA compliant materials HVO Plant ▪ Can forward of ISCC CORSIA PLUS ISCC CORSIA Material* ISCC CORSIA ISCC CORSIA Material materials and ISCC CORSIA/CORSIA certified compliant materials** ▪ Materials must be kept in separate mass balances * Or from other SCS accepted under ISCC EU ** And vice versa. Under ISCC EU material cannot be accepted as compliant that is certified under a CORSISA scheme © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 33 Acceptance of sustainable material for companies certified under ISCC CORSIA PLUS or ISCC CORSIA and ISCC EU Example ISCC CORSIA PLUS ISCC CORSIA PLUS and ISCC EU certified unit ISCC CORSIA PLUS Material ISCC CORSIA PLUS Material ▪ Can accept deliveries of ISCC CORSIA/CORSIA PLUS materials and HVO Plant ISCC EU materials* ISCC EU Material* ISCC CORSIA PLUS and ISCC EU Material* ISCC EU certified ▪ Materials must be kept in separate mass balances ▪ Materials must be forwarded as ISCC CORSIA, or ISCC CORSIA PLUS or ISCC EU respectively ▪ ISCC EU Materials cannot be accepted ISCC CORSIA PLUS Material as eligible under ISCC CORSIA/CORSIA PLUS** ISCC CORSIA PLUS Material ▪ This is due to the fact that under HVO Plant CORSIA, currently no SCS under other ISCC EU Material* ISCC CORSIA PLUS and ISCC EU certified regulatory programs (e.g. RED) are recognised * Or from other SCS accepted under ISCC EU ** And vice versa. Under ISCC EU material cannot be accepted as compliant that is certified under a CORSISA scheme © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 34 ISCC provides templates for sustainability declarations under ISCC CORSIA/CORSIA PLUS – Application is voluntary ▪ Templates for sustainability declarations* provided for: Raw materials/intermediate products CORSIA eligible fuels ▪ Templates contain fields for all information that must be forwarded through the supply chain to demonstrate compliance with all relevant sustainability and LCA criteria ▪ The use of the template is voluntary ▪ Companies can set up own templates or attach required sustainability information to existing documents (e.g. delivery documents) *Sustainability declarations for CORSIA eligible fuels also referred to as Proof of Sustainability (PoS) © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 35 Supplementary information on CORSIA eligible fuel – Information requirements for the neat (unblended) fuel and downstream supply chain ▪ Supplementary information* from the producer of the neat (unblended) fuel and downstream supply chain up to the aeroplane operator/airline required ▪ Information have to be forwarded by: The producer of the neat (unblended) CORSIA eligible fuel, The blender Any intermediate purchaser (if applicable) ▪ Aeroplane operators/airline have to provide this information together with the Emission Report to the state *Additional information for CORSIA eligible fuel according to ICAO Standards and Recommended Practices, Annex 16, Volume IV where they are registered © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 36 Supplementary information on CORSIA eligible fuel – The template provided by CORSIA should be applied* Template information Eligible fuel claim Aeroplane operator – Cover sheet form identification form Summary of eligible Economic operators are required to complete all elements of the fuel information template on which they have information and pass it on in the supply chain For each batch of eligible fuel a separate form has to be completed *See ICAO Standards and Recommended Practices, Annex 16, Volume IV, Part II, Appendix 5, Table A5 -2. Template provided in Appendix 1 of the Environmental Technical Manual (Doc 9501), Volume IV © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 37 CORSIA eligible fuel claim form – Overview of information requirements* Fuel information Sustainability and life cycle emissions information of the fuel ✓ Production date ✓ Evidence that fuel satisfies CORSIA Sustainability ✓ Production location criteria, i.e. valid sustainability certification document ✓ Fuel type , for example Jet-A, Jet-A1, Jet-B, ✓ Default or Actual Life Cycle Emissions Value (LSf) Aviation Gasoline (AvGAS) ✓ Default or Actual Core Life Cycle Assessment (LCA) ✓ Feedstock/raw material of the fuel produced value ✓ Conversion process used to produce the fuel ✓ Default Induced Land Use Change (ILUC) value Intermediate purchaser and shipper information Fuel blender information ✓ Name and contact of the intermediate purchaser (in ✓ Name and contact of blending facility case the airline did not buy eligible fuel directly from ✓ Location of the blending facility the producer) ✓ Date of receipt of the eligible neat fuel ✓ Name and contact party responsible for shipping the neat eligible fuel to the fuel blender ✓ Blend ratio of neat eligible fuel and aviation fuel *See ISCC CORSIA Document 203 “Traceability and Chain of Custody” for the full set of required information © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 38 CORSIA eligible fuels form versus ISCC CORSIA Sustainability Declaration Information to be forwarded with the ISCC Sustainability Declaration which are not covered by the CORSIA eligible fuels form ▪ Country of origin of the raw material ▪ Status of the raw material, e.g.: Compliance with ISCC CORSIA PLUS Sustainability Requirements Certification according the low LUC risk approach Meets the definition of waste, residues, by-products ▪ Detailed information on life cycle emissions Life cycle emissions per upstream supply chain element © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 40  Mass Balance © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 41  Mass balance approach: CORSIA eligible and CORSIA non-eligible material can be physically mixed but must be kept separated in the bookkeeping Separate bookkeeping for CORSIA eligible material CORSIA eligible feedstocks First Gathering Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines Point/Collecting Point (e.g Harbour) Plant Blend Point Trader CORSIA non- (Trader) eligible feedstocks Separate bookkeeping for CORSIA non-eligible material Physical segregation is also allowed under ISCC CORSIA. © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 42 Main features of the mass balance system ▪ Comprise a specific set of ▪ Product-specific sustainability characteristics Indicating the material (e.g. crude oil, HVO, HEFA, etc.) ▪ Maximum mass balance period of 3 months ▪ Scope-specific ▪ Site-specific If an operation is certified under different scopes (e.g. Confined to geographic location of certified operation processing unit and trader) for each scope individual mass balances should be kept ▪ Material-specific ▪ System-specific Indicating the raw material Separate mass balances kept for each certified scheme (e.g. ISCC CORSIA and ISCC EU) © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 43  The information that are relevant for the mass balance are forwarded on the sustainability declarations Separate bookkeeping for CORSIA eligible material CORSIA eligible feedstocks First Gathering Oil Mill/Refinery Trader/Storage SAF Production SAF Downstream Airlines CORSIA non- Point/Collecting Point (e.g Harbour) Plant Blend Point Trader (Trader) eligible feedstocks Sustainability Sustainability Sustainability CORSIA CORSIA CORSIA Declaration Declaration Declaration eligible fuel eligible fuel eligible fuel information* + information* + information* + *Additional information for CORSIA eligible fuel according to ICAO Standards and Recommended Practices, PoS** PoS** PoS** Annex 16, Volume IV © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 44 Mass balances are set up according to the information received on the sustainability declarations ▪ The sustainability characteristics that are necessary for the mass balances are included in the sustainability declarations of the incoming sustainable material ▪ Sustainability characteristics must remain assigned to batches of materials in the mass balance Batches of materials with the same sustainability characteristics can be kept in one mass balance Materials with different sustainability characteristics have to be kept in separate mass balances Exception for information on life cycle emissions: − Batches with identical sustainability characteristics apart from the life cycle emission values can be aggregated in the mass balance Close link between sustainability declarations if the highest emission value out of all batches is applied to and mass balances all batches Information on the Sustainability Declarations are the basis to set up correct mass balances © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 46 ISCC CORSIA and ISCC EU certified operator: Separate mass balances required Example Batch 126 Physical Batch 123 Batch 127 Mix of Physical mix of ISCC batches 123, CORSIA PLUS, ISCC Batch 124 Batch 128 124, 125* CORSIA and ISCC EU SAF Plant materials ISCC CORSIA and ISCC Batch 129 Batch 125 EU certified Batch 130 Bookkeeping Input Company Internal Process Output Batch Kind Amount (t) Batch Kind Amount (t) Batch Kind Amount (t) 123 CORSIA PLUS 2000 123 CORSIA PLUS 2000 126 CORSIA PLUS 1200 124 CORSIA 1500 124 CORSIA 1500 127 CORSIA PLUS 800 125 ISCC EU 1000 125 ISCC EU 1000 128 CORSIA 1500 129 ISCC EU 500 130 ISCC EU 500 Total 4500 Total 4500 Total 4500 * Assumed conversion factor CF = 1 © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 47  A mass balance ensures that volumes of outgoing CORSIA eligible material do not exceed volumes of incoming CORSIA eligible material Example Mass Balance Period* ISCC CORSIA/CORSIA PLUS mass balance requirements: ▪ During the mass balance period: It is possible to go short, i.e. to sell more material as CORSIA eligible than available ▪ At the end of the mass balance period: Input Incoming CORSIA eligible products and outgoing Total Month 1 Month 2 Month 3 period CORSIA eligible products must in balance, OR Output More CORSIA eligible material was taken in than taken out − Credits of CORSIA eligible material may be transferred into the next mass balance period A negative balance at the end of the mass balance period is not permitted Non- CORSIA eligible material − This is the case when more CORSIA eligible material CORSIA eligible material was taken out than taken in *Assumption: In this example no CORSIA eligible material is in stock at the beginning of the mass balance period and no credits were available © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 48 Verification of mass balance and credit transfer: Ensuring that bookkeeping is balanced and available credits are forwarded correctly Step 3 Step 1 Step 2 Credit Transfer Verification Mass Balance Calculation Mass Balance Verification Verification that transfer Determination of Comparison of the of credits amount amounts of available (surplus of CORSIA eligible of CORSIA eligible material CORSIA eligible material with material in the mass balance) was that is available for the entire mass the amounts of outgoing CORSIA done correctly balance period eligible material © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 49 Mass balance verification to ensure that bookkeeping is balanced or that credits are available B C Conversion A a process b Outgoing Incoming CORSIA eligible + Inventory CORSIA eligible Conversion factor Inventory CORSIA eligible CORSIA eligible product feedstock feedstock CF* product Mass balance period Step 1: Mass balance calculation Step 2: Mass balance verification Calculation of B (total available CORSIA Requirement at end of mass balance period: eligible product in balancing period): B≥C B - C = 0: Balanced = No credit (exact amount forwarded as CORSIA eligible B = (A + a)*CF + b than available) B-C>0: Credits (Positive balance) = Less CORSIA eligible material forwarded than available B - C < 0: Negative balance = More material forwarded as CORSIA eligible than available. This is not allowed! *Conversion factor can be assumed to be 1 (CF=1) for all scopes other than processing units © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 50 Step 3: Verification of credit transfer (I) Credits = Surplus of CORSIA eligible material at the end of the mass balance period (B>C) Credit transfer into the next mass balance period: The equivalent amount of material has to be physically in stock This has to be verified by the auditor during the audit Credit transfer between materials: Not possible between materials with different status of raw material (e.g. no transfer between materials based on waste/residues/by-products and materials based on biomass compliant with land related sustainability requirements) Not possible between materials with different conversion factors Credit transfer between certification periods Possible in case of a gap between certification periods of up to 3 months During this time, the amount of material in stock must not Material in stock fall below the amount of credits that shall be transferred ▪ Can be identical products or product groups Credit transfer between sites: ▪ Can be CORSIA eligible and CORSIA non- Not permitted eligible material © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 51  Co-Processing © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 52  Co-processing is allowed under ISCC CORSIA ▪ Co-processing: Bio-based and fossil-based feedstocks are physically mixed and processed simultaneously in the same production unit, e.g. in a refinery ▪ Not considered as co-processing: The addition of denaturants or other auxiliaries ▪ Bio-based inputs have to meet the sustainability, traceability, mass balance and LCA requirements of ISCC CORSIA/CORSIA PLUS ▪ Default values for co-processed CORSIA eligible fuels available See ISCC CORSIA Documents 203 and 205 for further information ▪ For co-processed SAF the mass balance is kept for share of bio- based input and the bio-yield (i.e. bio-based share in the output) Correct determination of bio-yield is important ▪ Free attribution of sustainability characteristics to specific outputs is not allowed © ISCC use © ISCC System GmbH: For personal System only.GmbH: For personal Reproduction use only. Reproduction and distribution is prohibited. and distribution is prohibited. 53 Three calculation methods available for determination of bio-content in co-processed fuels 1. Determination of energetic weighted ratios of the different inputs 2. Tracking of the bio-carbon molecules through 12C or 14C analyses 3. Mass-based determination considering efficiency/losses ▪ Determination of bio-yield is always specific to the co-processing site ▪ Determination of bio-yield to be conducted either under day-to-day operational conditions or, where not possible, under specific test conditions © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 55  Summary ▪ Under ISCC CORSIA certification all supply chain elements up to the airport fuel supplier can be individually certified ▪ Group certification approach can be applied for farms/plantations, points of origin of waste/residues/by- products to cover the supply base efficiently ▪ Traceability is ensured by Sustainability Declarations that are forwarded through the CEF supply chain ▪ Supplementary information for CORSIA eligible fuels have to be provided by producers of the neat (unblended) SAF, blender and distributors up to the aeroplane operator/airline ▪ The mass balance approach can be applied which allows a physical mixing of CORSIA eligible and CORSIA non-eligible materials ▪ Credits for CORSIA eligible material can be forwarded into the next mass balance period under certain provisions ▪ The certification of co-processing is possible under ISCC (free allocation not allowed) © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 56  Thank you! ISCC System GmbH Hohenzollernring 72, 50672 Cologne, Germany www.iscc-system.org © ISCC System GmbH: For personal use only. Reproduction and distribution is prohibited. 57