“RED BP Scheme: Sustainable Biofuel Requirements in Lithuania and EU”

In Lithuania, on May 1, the national scheme “RED BP” came into full force, which sets requirements for the compliance of solid biofuel with sustainability criteria. Latvian suppliers can also participate in the scheme and sell sustainable biofuel.

From January 1, European Union energy market participants who operate plants using biofuel and whose total nominal heat capacity is 20 MW or more, or who participate in the Emissions Trading System (ETS), may only use sustainable biofuel.

The requirement to market and use sustainable biofuels is defined in the European directive “RED II” (Renewable energy directive).

This directive requires biofuel users to know about the raw materials and origin of the used biofuel, to request information from suppliers and to make sure that the raw materials have been obtained in compliance with the applicable sustainability requirements, as well as to calculate the GHG emissions associated with the burning of biofuel.

“I am sure that everyone understands the importance of the new requirements. By using sustainable biofuels, we will aim to reduce the amount of greenhouse gases (GHGs) and achieve common EU goals in this area, while also increasing the trust of the public and non-governmental organizations in the sector. Because every member of society at any time will be able to find out the exact information from which the biofuel burned by heat energy supply companies is actually produced. So far, more than one myth has been created about it”, says Andris Smaliukas, head of the Baltpool company.

By amending the Renewable Energy Law, in 2022 “Baltpool”, as the operator of the energy exchange, was entrusted with the creation of a voluntary national assessment scheme “RED BP” for the compliance of biomass fuel with sustainability and GHG reduction criteria, in order to implement the RED II directive in Lithuania.

“When creating the “RED BP” scheme, we tried to collect the data, creating a minimal administrative burden for the participants of the biofuel exchange, verifying the reliability of the collected data in the existing registers managed by state institutions,” says the manager of the “Baltpool” company.

“Baltpool” has been introducing the upcoming changes and technical details to the market participants for some time.

From now on, the “RED BP” label is mandatory for all sustainable biofuels, both produced in Lithuania and imported from abroad, if the buyer requests the delivery of biofuels according to the “RED BP” scheme.

Transactions with sustainable biofuel under “RED BP” are already being successfully implemented in Lithuania. Latvian biofuel sellers, like market participants from other countries, can participate in the Lithuanian “RED BP” scheme.

According to the scheme, foreign sellers in Lithuania can sell by-products (residues) of wood processing, certified wood according to the voluntary international schemes SBP, SURE and KZR recognized by the European Commission, as well as sustainable forest management schemes FSC, PEFC.

Biofuel is considered sustainable if it meets sustainability criteria, for example, it is produced in compliance with existing laws and regulations regarding forest protection, biodiversity and soil quality, it is extracted and collected in an environmentally friendly manner. Biofuels must not be obtained from areas with high biodiversity. All existing energy resource exchange participants will be able to participate in this scheme. In addition, all information will be collected on compliance with sustainability and GHG reduction criteria for biofuels, but the collected information will be transferred by the state to the European Commission.

“The current requirements for biofuels in Lithuania have already worked in accordance with the “RED II” directive, but there was no clear accounting system. “RED BP” will promote the collection and systematization of all information about the used biofuel, its origin, raw materials, compliance with the principles of sustainability. The scheme will provide more clarity for market participants. After the start of operations of the Vilnius cogeneration power plant, biofuel consumption will increase significantly in Lithuania. More than 80% of the heat will be produced using biofuel. Our goal is that the prices of both sustainable biofuels and biofuels without documents certifying sustainability do not differ or differ insignificantly”, says A. Smaļuks.