Sourcing sustainable biomass

Evidencing that our sourcing delivers beneficial climate outcomes, promotes sustainable management, protects the environment, and supports people and communities.

Pine trees in Mississippi working forest

Forest Positive Approach

At Drax we use wood pellets sourced from sustainably managed working forests and residues from forest industries to generate low-carbon, renewable electricity. Our forest positive approach to sourcing sustainable biomass is made up of the following elements:

We ensure our biomass is sustainable and compliant with relevant legislation through Sustainable Biomass Program (SBP) certification, alongside proactive supplier engagement, other third-party certification schemes and our own audits and checks. Our Group Sustainability Policy outlines our requirements, and it is evidenced and included in biomass supplier contracts.

Our Biomass Sustainability Requirements

We adhere to the UK Government criteria for sustainable biomass, the Forest Europe Sustainable Forest Management criteria and we comply with the European Union Timber Regulation (EUTR).

  • Group sustainability policy – in place since 2008, our policy covers our core sustainability values on protecting biodiversity, reduction of greenhouse gas emissions and contribution to social values.
  • UK Government criteria for sustainable biomass – we report monthly on compliance with the UK sustainability criteria, including life cycle emissions limits and the land criteria. This covers the requirements of the Forest Europe Sustainable Forest Management criteria, including: maintaining forest area and carbon stocks; encouraging the production of forest products; maintaining the health and vitality of the forest ecosystem; conserving and enhancing biological diversity; contributing socio-economic benefits; and ensuring that soil and water protection is maintained.
  • European Union Timber Regulation – in place since 2013, the EUTR requires purchasers of wood products to have coherent due diligence processes in place to minimise the risk of trading illegally logged timber.

Responsible Sourcing Policy for Biomass

Further to our Group Sustainability Policy, our Responsible Sourcing Policy for Biomass outlines our forest biomass sustainability commitments. The policy strengthens our approach in line with recommendations made by a report commissioned by the European Climate Foundation. This is to provide further assurance that the sustainable biomass we source makes a net positive contribution to climate change, protects and enhances biodiversity and has a positive social impact on local communities.

Our forest biomass sustainability commitments:

  1. We will reduce carbon dioxide emissions

We are committed to ensuring our use of biomass makes a positive contribution to tackling climate change and fulfilling the UK’s net zero by 2050 target.

  1. We will protect the natural environment

We recognise our duty to keep forests thriving and to respect the many benefits they bring, including carbon storage, protection of soil and water quality, supporting biodiversity and provision of habitat.

  1. We will support people and communities

From state-owned forests to smallholdings, and from the US southeast to the Baltic states, forest owners, forest workers and communities in our sourcing areas are bound by their common reliance on forests for employment, wellbeing and quality of life.

  1. We will invest in research, outreach and intervention

The strength of our collaboration with others will improve the sourcing choices we make. We are committed to working with governments, non-governmental organisations, academia and other stakeholders to continually improve biomass sourcing and develop best practice.

Due Diligence

Supplier compliance with our policies and appropriate legislation is evidenced by Sustainable Biomass Program (SBP) certification, a certification system for woody biomass, or by our own checks and third-party audits. We require suppliers to progress from our own checks and third-party audits commissioned by Drax, towards SBP certification. In 2020, 99% of the woody biomass we sourced was SBP compliant.

Governance

The Group Director of Corporate Affairs has overall responsibility for delivering Drax Group’s sustainability performance and ensuring biomass meets the Government’s sustainability criteria. Cases requiring special attention are escalated to the Group Ethics and Business Conduct Committee (EBCC) or the Executive Committee. The Independent Advisory Board on Sustainable Biomass [link https://www.drax.com/sustainability/independent-advisory-board-on-sustainable-biomass/] established in 2019 provides advice on sustainable biomass and its role in Drax’s transition to net zero emissions.

No concerns regarding biomass supplier sustainability compliance were raised or escalated to the EBCC or the Executive Committee in 2020.


Due Diligence Process

Drax has developed a rigorous process to ensure that new and existing biomass suppliers demonstrate that all necessary sustainability and legal requirements are met. Our eight key stages for ensuring compliance are: chain of custody; supplier audits; the EUTR legality assessment; GHG life cycle assessment and monitoring; the sustainability data return (SDR) captured in the contract; the SDR and annual declaration; regional and country risk assessments; and supplier relationship management and monitoring. These stages are implemented in an ongoing cycle to provide robust evidence across each element.

Our due diligence process always begins with a regional risk assessment, which identifies high-level risks such as deforestation or illegal logging, corruption and issues with workers’ rights. This ensures that we focus on these high risks and how they are being mitigated. These reports are renewed every three years, or more frequently if there are causes for concern, to ensure that we always stay on top of developing issues.

This is followed by the SDR, where we ask the supplier 43 detailed questions about all aspects of their supply chain and to provide documentary evidence to support their answers. This sustainability declaration subsequently forms part of the contract between Drax and the supplier.


Third-Party Audits

Each new supplier is subject to an independent audit commissioned by Drax before pellets can be delivered. Existing suppliers are audited at least once every three to four years. The audit requires the supplier to pass a series of detailed environmental and social checks along the whole length of their supply chain and pellet manufacturing process. Findings are categorised as high, medium or low priority.

High-priority findings can result in termination of a supplier agreement. Medium-priority findings result in the supplier being given a deadline for rectifying them. Low-priority issues highlight areas where our independent auditors believe there is scope for the supplier to improve their practices. Drax engages with our suppliers to share best practice and support and encourage improvements to procedures.


The Sustainable Biomass Program

Suppliers can evidence the necessary sustainability requirements through Sustainable Biomass Program (SBP) certification, a certification system for woody biomass.

SBP-certified material has been benchmarked by Ofgem to fully meet the UK sustainability requirements. We encourage our suppliers to progress from our own checks and third-party audits commissioned by Drax towards SBP certification. In 2020, 99% of the woody biomass we sourced was SBP compliant.

 

The Sustainable Biomass Program 


Forest Management Certification

In addition to our own checks, third-party audits commissioned by Drax and SBP certification, sustainability can also be demonstrated through the Forest Stewardship Council® (FSC®) – Drax FSC License Code: FSC-C119787 – and PEFC’s Forest Management (FM) certification. These schemes are global not-for-profit organisations dedicated to the promotion of responsible forest management worldwide. FM certification process confirms that the forest is being managed in a way that preserves the natural ecosystem and benefits the lives of local people and workers, while ensuring that it sustains economic viability.

FM certification may be difficult to achieve for some types of forest owners and, for this reason, a secondary level of FSC certification called Controlled Wood is available. This ensures that wood fibre is not: illegally harvested; harvested in violation of traditional and human rights; harvested in forests in which high conservation values are threatened by management activities; harvested in forests being converted to plantations or non-forest use; or from forests in which genetically modified trees are planted.

American Tree Farm 


Chain of Custody

Once certified, Chain of Custody can be used as a mechanism for tracking wood fibre from the forest to the final product and destination. Each supplier in the chain must have a documented system that enables the supplier to demonstrate that the wood fibre has been identified and separated from non-certified and non-controlled wood at each stage in the supply chain. Drax requires that all of its suppliers achieve Chain of Custody certification before contracts are signed and pellets can be delivered.

At Drax, our key biomass buyers, logistics, legal and communications colleagues are required to complete Chain of Custody training with the sustainability team.


Supplier Engagement

Drax operates a proactive supplier engagement programme to develop closer relationships with all biomass suppliers on sustainability issues. Our approach includes regular site visits to improve overall performance by identifying any potential risks, understanding constraints and capacity, monitoring audit findings and corrective actions, carrying out training and providing resources as required.

Biomass Sources in 2020

Biomass supply chain transparency is a key element of our forest positive approach and we provide further detailed supply chain information at Drax ForestScope www.forestscope.info.

We respond annually to the CDP Forests questionnaire and achieved a rating of B in 2020.

In 2020 our biomass was sourced from established, responsibly managed working forests in the US South, Europe, Canada, Brazil and Russia.

CountrySawmill and other wood industry residues (t)Branches and tops (t)Thinnings (t)Low grade roundwood (t)Arboricultural residues (t)Agricultural residues (t)Country total (t)
USA1,675,92992,9341,117,7951,768,8732,48714,680,402
Canada1,021,44499,2331,316395,2671,229,107
Latvia206,4687,922453,621668,011
Portugal1,28304,67231,53099,015470148,516
Brazil141274141,274
Belarus10,67342223108,957
Russia5928,530185,893
Estonia2,999710,2034520085,399
Lithuania6,71611,0191495283,132
UK70,08670,086
Other European1,63577385,642473,520
Total313,7511196,839118,1631262,1163470236,682 7,374,296

Biomass Supply Chain Emissions

Biomass can only be considered a low carbon, renewable energy solution when it can be evidenced that greenhouse gas (GHG) emissions savings are delivered on a lifecycle basis, compared to alternatives such as fossil fuel generation. We therefore collect fuel and energy data for each step in the supply chain, enabling us to calculate lifecycle GHG emissions for our biomass and to demonstrate compliance with our regulatory requirements.

Every supplier is required to give detailed information on what type of fibre is used to make wood pellets along with full details of their sources, the distances and vehicle types involved in their production, the production process itself, data about fuel and energy usage, plus any sea freight data (including what type of vessel was used, over which route, and over what distance). GHG emissions are affected by a wide range of factors including cultivation, harvesting and transportation. The majority of our pellets are shipped to the UK from North America. The most significant GHG impacts in the biomass supply chain are the electricity used in pelletisation and the sea freight emissions in transport.

The impact of shipping emissions is determined by both distance and vessel size. For longer distances (e.g. from North America) it is essential to use large-scale vessels capable of transporting more than 40,000 tonnes of wood pellets (sometimes up to 60,000 tonnes); this significantly reduces the emissions per tonne of wood pellets. Within Europe, shipping distances are much shorter and therefore smaller vessels can be utilised, which allows vessels to access small ports that can reduce inland transportation.

Drax uses specially designed rail wagons to transport the biomass pellets direct from port to the power station. This is dramatically more carbon efficient than road transport. Pellet mills are ideally located close to the forest resource and close to ports in order to minimise inland transport emissions.

The UK Government has set a limit on biomass supply chain GHG emissions, which must be met by generators to be eligible for support under the Renewables Obligation and Contract for Difference schemes. The current limit is 200 kgCO2e/ MWh of electricity. In 2020, our average biomass supply chain GHG emissions amounted to 109 kgCO2e/MWh of electricity.

Our Biomass Carbon Calculator is a GHG lifecycle emission tool designed to improve the accuracy and transparency of reporting emissions for wood pellet supply chains. The calculator has been externally verified against UK and EU regulations. It includes all material sources of GHG emissions, including categories absent from other UK reporting tools, such as methane and nitrous oxide emissions arising from fuel combustion. Drax is committed to taking a leading role in the lifecycle emissions reporting of biomass, and we are providing the calculator for open use to facilitate improved reporting standards across the industry.

 Unit 2020 2019201820172016
Average biomass supply chain GHG emissionskgCO2 e/MWh109*124131130122
* Limited external assurance by Bureau Veritas using the assurance standard ISAE 3000. For assurance statement see https://www.drax.com/sustainability/approach/#assurance-statements

Note: includes the biomass supply chain emissions associated with both Drax’s direct operations (Pellet Production business) and third parties.
* These categories are aggregated in our Biomass Carbon Calculator and the proportion of emissions assigned to transport to port, shipping and rail to Drax has been estimated.