Benchmark of RenovaBio certification tools compared to BonsucroMeetingAugust, 14th, 2019

Summary

1. Reviewing context, scope and objective

2. Preliminary results

1. Standards

2. Audit and Certification process

3. Life Cycle

4. Tools

3. Final Questions

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1. Reviewing context, scope and objective

Reviewing context, scope and objective

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Deliverable 1: Presentation at BGW

Deliverable 2: Technical Study

Deliverable 3: Forum to promote discussion (PS Public Consultation) – Mar/20

Reviewing context, scope and objectiveConsidering the focus on the development of an integrated audit protocol and the possibilityof mutual recognition in future, RenovaBio and Bonsucro were reviewed and compared on astructural and systemically levels looking for the benchmarking of these Standards.

The comparison was carried out through a documentation review mainly focused on theBonsucro Certification Protocol and for RenovaBio the Resolution nº 758/2018 from NationalPetroleum Agency (ANP), using the Bonsucro Benchmarking Protocol as a guide.

Comparison was done on the following broad areas:

• Standards system & characteristics• Audit methodology• Certification

Regarding the Benchmarking of the calculator, the principal objective is to make the certificationprocess simpler for the biofuel producers who want to achieve the mutual certification, Bonsucroand Renovabio.

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2. Preliminary results

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2.1 Standards

Purpose

The primary purpose is to define a set of principles, criteria and indicators, along with explanatory notes, for the assessment of the operator’s performance against the three pillars of sustainability.

It is aimed at:

• Bonsucro members who wish to achieve certification

• Licensed Certification Bodies and auditors when carrying out certification audits

• The wider audience of the sugarcane sector and any interested parties.

BONSUCRO RenovaBio

The primary purpose of the RenovaBioCertification is to certify biofuel producers according to the high energetic efficiency standard, less GHG emissions, expanding the use of renewable fuels at the national energy market, increasing biofuels competitivenessand to attend the country’s commitment at the Paris Agreement

It is aimed at:

• Biofuels producers (and chain of custody -importers)

• Fuel distributers

• Licensed Certification Bodies

Scope

Can be applied worldwide to any sugarcanemill and their supplying area wishing to sellsugarcane products as a Bonsucrocertified

Standard Structure: 5 principles and producers need to illustrate compliance with:

• all of the 16 core indicators (plus Principle 6 for certification against Bonsucro EU) is required, plus

• a minimum of 80 % of all the indicators must be satisfied. To be considered satisfied, an indicator which applies to mill and farm must be met by both entities.

BONSUCRO RenovaBio

Can be applied worldwide to any biofuelproducer and their supplying area wishing tosell Decarbonization Credit Unit (CBIOs).

Standard Structure: quantity of CBIOsdepends on:

• the eligibility fraction

• the GHG emissions based on the LCAanalysis, and

• Volume of biofuel sold to the internalmarket.

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2.2 Audit and Certification process

Audit Methods

Membership

Bonsucro RenovaBio

Must be a member of Bonsucro

All biofuel producers (national or international)

Audit Stages

Audit Guidance

• Internal Control System (ICS) audit;

• Implementation audit “in locu”

No standardized checklist. Requires CBs to develop their own checklists based on the Bonsucro Production Standard Guidance

• Implementation audit (variable according to the inspection firm)

No standardized checklist. Inspection firms must present an inspection protocol to ANP

Question: is it desirable to create a standardized checklist for both certifications?

Audit Methods

Bonsucro RenovaBio

Approved auditors• Food Chain ID• SGS• Control Union• SCS Global• LRQA

• Green Domus• SGS • Inst. Totum• Fundação Vanzolini• KPMG

Question: Is it important to increase the number of inspection firms common for both certifications?

Auditors requirements

Bonsucro: Certification Body RenovaBio: Inspection firm

• Prove the technical capacity

• The inspection firm should be accredited as Greenhouse Gas Inventory Verification Body (OVV)

• Accreditation against ISO 14065:2013 and experience in carrying out audits in conformity with ISO 14064-3:2006 is recommended but not mandatory

• Shall operate at least one accredited scheme under ISO 17065:2012 (OCP)

The only possibility for a common certification process is that all requirements of both certification are met by a single firm.

Certification process

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Bonsucro RenovaBio

Certification cycle• Three years cycle• Initial audit• Annual surveillance audits• Re-certification audit

• Three years cycle • Specific conditions (10%

reduction) • Any time if company wants

Compliance Full compliance with core andminimum of 80% of all indicators Full compliance with eligibility criteria

Suspension orrecertification

No full compliance with core indicators and/or less than 80% oftotal indicators

Recertification: efficiency note reduction higher than 10% and non compliance with eligibility criteria

Certification stages• Audit• Public consultation• Validation of efficiency note by

ANP

• Audit• Validation of audit by Bonsucro

Data for certification • Data of previous year (12 months base)

• From the second certified emission shall be used the moving average from the previous three years

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2.3 Life cycle approach

Eligibility: “no go” areas

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Bonsucro RenovaBio

Full compliance for “no go” areas indicators Full compliance with eligibility criteria

Indicator 4.1.2: 0% of areas defined internationally or nationally as legally protected or classified as of High Conservation Value planted to sugarcane after the cut-off date of 1 January 2008

• Cultivation areas cannot be from natural areas after December 2017/ November 2018;

• Sugarcane producers must have their Rural Environmental Register (CAR – “CadastroAmbiental Rural”) updated or at least pending in the CAR federal system;

• The cultivation areas must respect the agro-ecological zoning for sugarcane (ZAE Cana).

Indicator 5.7.1: 100% of greenfield expansion (in non HCV areas) or new sugarcane project after the cut-off date of 1 January 2008 must be covered by the environmental and social impact assessment (ESIA)

Should RenovaBio accept compliance with Bonsucro standards for “no-go” areas?Compliance with Agroecological zoning should be added?

Life cycle approach: methodology and premises

Life-Cycle

Bonsucro RenovaBio

Cradle to gate Well to wheels

Technological scope

Temporal scope

Sugarcane technologies

Previous 12 months

Several recognized by the certification (sugarcane,

soybean, corn, gas)

Fiscal year

Approach Attributional Attributional

Functional unit gCO2e /MJkgCO2e/t cane

gCO2e /MJkgCO2e/t cane (intermediate)

Geographical scope World World

Suggestion for Bonsucro: Include in the life cycle the product distribution phase. Further alignment would require Bonsucro to restrict temporal scope.

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2.4 Tools

Benchmark results: ToolsBonsucro Calculator RenovaCalc

Input data

Input Sheet:• Company general

data• Agriculture• Cane transport• Milling/Processing

Producer sheet:• Consolidated data• Producer primary data• Producer standard data• Eligibility informationRenovaCalc sheet:• Producer information• Agriculture phase• Industrial phase/ethanol processing• Distribution phase

Period: Previous 12 months

Information: farm area included in the unit of certification and used for cane production

Structure Sheet

Period: Fiscal year

Information: farm and industrial data by CNPJ/CPF

Benchmark results: Aligned elements In order to verify if the Bonsucro input data are aligned with RenovaBio, each input variable ofRenovaCalc was compared to Bonsucro input data and classified in fully aligned, partially aligned andnot aligned, as described below.

• Fully aligned: when the variable included in RenovaCalc and Bonsucro tool are exactly the same, including the unit. It is represented by the green color.

• Partially aligned: when the variable of RenovaCalc and Bonsucro are not equal, but it can become equal through a unit transformation or a simple calculation using the input data; or if the variable is required in an aggregated form and to become equal is only necessary to disaggregate it. It is represented by the yellow color

• Not aligned: in the case that the RenovaCalc variable used is not included or is not considered in the Bonsucro calculator. It is represented by the red color.

The table below summarizes the alignment of Bonsucro calculator with RenovaCalc:

Variables Alignment

Fully aligned 8%

Partially aligned 50%

Not aligned 42%

RenovaBio Verifier Bonsucro Verifier How to adjust data? Comments Indicator

Total production harvested for milling tonnes Total supplying

area to the mill tonnes

Benchmark results: Aligned elements

Organic fertilizers Verifier Bonsucro Verifier How to

adjust data? Comments Indicator

Vinasse L/t cane Vinasse applied to cane m3

Multiply by 10^3 and divided by

cane production1 m3 = 1000 litros

Synthetic fertilizers Verifier Bonsucro Verifier How to

adjust data? Comments IndicatorUrea (CH4N2O) kg N/t cane

N, P2O5, K2O (Not specify by source) kg/ha

Specify the fertilizers used in

this phase

This information is already collected in a desagregated way

Monoammonium phosphate (MAP) kg N/t cane

Monoammonium phosphate (MAP)

kg P₂O₅/t cane

Diammonium phosphate (DAP) kg N/t cane

Benchmark results: Aligned elements Distribution phase

Transport Verifier Bonsucro Verifier How to adjustdata? Comments Indicator

Anhydrousethanol

% Not reported -

Bonsucro does not consider the transport in the distribution phase

RoadDuctworkRailway

Hydrous ethanol

% Not reported -RoadDuctworkRailway

Link para o Excel

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3. Final Questions

Questions for further development v Did you find any difference not listed in this benchmark?

v Regarding companies that will engage in both certifications:

ü Does your company use a management system that already incorporates Bonsucro requirements? Which one?

v For audit companies: how much the “per audit” cost would reduce in a scenario of common inspection (20%, 30%, 50%)?

v What seems to be the most promising solution to reduce costs (short and medium term):

a) Recognition of Bonsucro score (gCO2/MJ) by RenovaBio?b) Recognition of RenovaBio score as part of Bonsucro (GHG emissions)?c) Development of an “Input sheet/system” that would automatically fill both

calculators, Bonsucro and RenovaBio, based on a common inspection protocol?d) Others?

v Should Bonsucro change its requirements for audit companies?

Obrigado!www.agroicone.com.br

Marcelo MoreiraPartner+55 11 3025-0506 marcelo@agroicone.com.br

Contacts

Luciane ChiodiPartner+55 11 3025-0505 luciane@agroicone.com.br