2. Feedback Brussels meeting with producers associations
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1 Initiative of Wood Pellet Buyers Steering Committee Meeting, Minutes Friday 19 July 2013 Schiphol - WTC Attendees Drax E.On RWE Vattenfall GDF SUEZ Nigel Burdett (NAB) Diekumo Anthony (DA) Peter-Paul Schouwenberg(PPS) Bart Dehue (BDH) Laura Bartle (LB) Yves Ryckmans (YR, moderator) Chrystelle Verhoest (CVE, facilitation) 1. Anti-trust BDH stresses the importance of anti-trust issue that must be recalled at the beginning of every meeting. See extract hereafter and dedicated Annex for further details. The policy of IWPB and its members is therefore to conduct all of its activities in strict compliance with all applicable antitrust and competition laws, in order to facilitate legitimate pro-competitive and other activities that help advance the objectives of the initiative. It is therefore against the policy of IWPB to sponsor, encourage or tolerate any discussion, communication, information sharing or agreement that would violate applicable antitrust or competition laws. Any discussion, communication or agreement relating to strategic information, including but not limited to the following, should therefore be strictly avoided: o Actual prices, pricing policies, bids, discounts, promotions, terms of sale or credit, royalties, or license fees; o Customer lists; o Production costs or volumes; o Costs, profits or turnover of individual companies, products or services; o Offers or sales volumes to customers or territorial markets; o Marketing plans; o Production quotas, output, capacity or inventory; o Purchased volumes and demand; o Boycotts and refusals to deal with particular companies or groups; o Agreements concerning individual company decisions on whether to produce certain products, adopt certain product designs, or carry out specific product release dates or cycles; o Risks; o Investments; or o Technologies and R&D programmes and their results. 2. Feedback Brussels meeting with producers associations Participants: Fanny-Pomme Langue (EIPS), Gordon Murray (WPAC), Seth Ginther (USIPA), François Ducarme (SGS), Tjipke Hoekstra (PCU) Michael Schytz, Diekumo Anthony, Bart Dehue, Yves Ryckmans (IWPB SteerCo) Documents were distributed for the better understanding of the SBSS but with special request to avoid distribution among their members yet: - document describing the Standard by SGS and PCU - answers to key questions by the SteerCo (my document) - description of a Risk Assessment (document by Bart Dehue)
2 The Producers did not identify any trouble with our approach, but need to further exchange with their members. Apparently, the discussions with their members are positive up to now. Therefore, we should convene for another meeting with them soon. Define who should be the representatives of the producers in the future: the SteerCo suggests to invite 2 experts per producer association + director EIPS : FP Langue+2 candidate suppliers; USIPA : Seth Ginther + Elisabeth Woodworth (Enviva) + technical expert from their sustainability working group; WPAC: Gordon Murray + Robert Tarcon + X. 3. Governance (see Vattenfall proposal, slides) Board The Board defines the strategy and takes the key decisions. Nevertheless, the Board should be well informed on the work already done by the SteerCo and avoid contradictory decisions. YR expresses concern about the lack of representation of Belgium in the Board: the focus lies on the UK, but Belgium, Denmark and the Netherlands should not be forgotten. Next meeting of the Board on 29 July in London should gather available members of the board and key members of the SteerCo: - Michael Schytz has already been invited to this meeting - Dorothy Thompson opened up participation of SteerCo members to next Board meeting (London, 29 June): YR will participate in agreement with Steve Riley. Interim Director (ID) The ID makes the link between the SteerCo and the Board but makes himself no decision. If there is a consensus in the SteerCo, the ID should ask the Board to confirm the decision. If there is no consensus, and some alternative views do appear in the SteerCo, the ID should ask the Board to make the decision from those alternatives. SteerCo Basic roles are: - Prepare all support document for the Board. - Update the business plan - Manage the development of the Standard and the Scheme - Organize the Sounding Board meetings - Propose a budget and approves offers by third parties - Prepare legal entity for the scheme Sounding Board The Sounding Board today comprises of certification bodies and market regulators. NGO s are still lacking as members. The Sounding Board needed to be created in Track1 as a response to NGO s that do not want to step into a running train. The Sounding Board expects to be informed on our progress on the Standard. They requested the draft Standard / Scheme to be sent out at least one month to study our documents before the next meeting
3 4. Three issues to be agreed for SGS/PCU The three issues are: 1. Next steps for the standard and scheme development (see slides by Bart Dehue), including applicable Principles for Phase 1 2. Criteria for the risk assessment (based on PEFC/FSC) (see draft document by YR) 3. Decision points still to be taken for the Standard (see document on decisions by YR) Issue 1 : Next steps Standard and Scheme development for SBSS Track 1 Key remarks: - the certificate covers the pellet plant and catchment area of the raw material and pellet mills must have their own CoC between the forest and the pellet mill; - IWPB should ensure that a pellet plant has either SFI FS or FSC CW; - recognition process to be defined in order to endorse FSC / PEFC; - track one will need to add GHG balance (and carbon stock if DECC requires it); - supply chain parties = pellet mills; - risk assessment for the pellet mill covering certified and non-certified; - mechanism for approval of the regional risk assessment still to be agreed: this might be by the technical committee or possibly by the auditor.. Work plan - Steerco prepares with SGS/PCU the Principles & Criteria (P&C) based on draft by YR and CPET- CatB and to be approved by the Board. - The defined Principles and Criteria are then to be discussed with FSC & PEFC - Finalised draft end of September PPS proposes that the GGL technical group challenges the documents of the Standard. Need to clarify what legal compliance means for the Board, and move forward based on expectations on what is going to happen at regulatory level. Need to clarify what certification means for the Board: in Belgium, it means that the audit process does not need to be approved by a market regulator as the procedure covers inherently all needed elements to assure sustainability. In Belgium, some of those elements may still be based on verification if it engages the responsibility of an independent accredited body and/or the technical committee of the Scheme. Need to clarify what risk assessment means for the Board: a national/regional risk assessment is complemented by a local risk assessment if some risks are highlighted in the national/regional assessment. The national/regional assessment can be drawn from an endorsed independent source (FSC, PEFC,...) while the local risk assessment must be performed by the pellet plant operator. Criteria that cannot be shown to be low-risk in the regional assessment will need to be addressed in the sample-based supplier verification program. See document from Bart Dehue on risk-based approach for details. Need to clarify the Chain of Custody: - There are still some important issues to be resolved around the CoC In order to provide an overview, thecoc between the pellet factory and the power plant will be described in the Scheme in a separate document prepared by SGS and CU. This will incorporate discussion on mass balance One question raised by SGS was if the description of the mass balance system should be in it or not and it should be in. - The CoC for the raw material upstream of the pellet factory will be tackled by PEFC/FSC CoC systems. But we need to describe our requirements for this such that PEFC and FSC systems can be endorsed on that basis.
4 ideally, this description should take the common part out of the PEFC and FSC CoC systems. Need to clarify the Applicable Principles in Phase 1 The biomass end producer (meaning the pellet plant in the case of pellets, the trader in case of wood chips) sourcing raw material from forests must ensure that sustainable forest management is in place Issue 2: criteria for the SBSS Risk Assessment derived from PEFC/FSC Review of existing FSC Controlled Wood and PEFC Non Controversial Wood Principles The Group agrees on requiring RISK ASSESSMENT with at least (FSC C.W.) points a) Illegally harvested wood; b) Wood harvested in violation of traditional and civil rights; c) Wood harvested in forests where high conservation values are threatened by management activities; d) Wood harvested in forests being converted to plantations or non- forest use; e) Wood from forests in which genetically modified trees are planted. But consider that it is not sufficient We realize that PEFC NCS is much weaker than FSC CW. Issue 3:Review the document Basic elements of IWPB standard in phase1 Annex 6: Decisions to be taken by SteerCo on SBSS standard-yr-ppj.docx (updated)to be submitted to the Board. Most of the Decisions are agreed. Only the following ones requires additional comments. Decision 1 to 3 are descriptive of the assurance process. Will be further discussed. Decision 13 Discussed with Producers that the catchment area of the saw mills would be included in the risk assessment. But this might be an issue for EU producers as saw mills import logs from other countries, what is not the case in USA/Canada. Decision 15 : Not agreed yet The technical committee should set the rules for the risk assessments including the approval. SBSS shall define the criteria for the risk analysis. The risk criteria and process shall be reviewed by 3rd parties. Need for Belgium to have this. The proposal refers to the GGL requirements. Decision 21 : HCV is indirectly mentioned in CPET-B Agreed. 5. Conference call with SGS/PCU Additional participants through the phone: Bettina Jahn (SGS), Tjipke Hoekstra (PCU), François Ducarme (SGS), Vas Verkerk (PCU). Requests submitted to SGS/PCU. 1. Deliverable 1: define the criteria for the risk assessment: benchmark FSC CW, PEFC NCS, SFI Fiber against the CPET cat B compliance. Re-word the CPET wording to have it applicable at the regional level. Deadline: by mid August. 2. Deliverable 2: Make a separate document describing CoC from pellet mill to power plant, including mass balance system extracted from existing document of SBSS Standard. Deadline: end of August.
5 3. Deliverable 3: Audit protocol (// indicators)for the GHG balance on the basis of the Document 2 of IWPB date June 2012, part GHG. Deadline: end of August. up to pellet mill 4. Deliverable 4: Accreditation document including the requirements on the competences of the auditors. Deadline: mid September. Clarify product or process certification? Next meeting: 23 August, WTC Schiphol
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