• The energy companies will promote and implement FSC certification of small forest owners in North America. • The energy companies have agreed that in future, if it is found that they have not complied with the covenant, the environmental organizations may ultimately pursue a remedy in civil court in Amsterdam. • An expert group will determine which certification schemes are con-sidered to be equivalent to FSC. So far, the expert group has been unwilling to consider PEFC at the international level and has also been unwilling to consider Canada’s CSA forest certifi-cation standard. • Criteria that are essential to FSC have to be met in full. This would seem to include FSC’s requirement to conform to the International In-digenous Peoples Convention, even though Canada is not a participant in that convention. The Dutch government is doing its own assessment of forest certification schemes and has been adamant that FSC will not be the only accepted scheme. PEFC endorsed schemes and SBP will also be acceptable. However, Dutch en-vironmental organizations are equally adamant that FSC should be the only acceptable certification scheme and ap-pear to have stacked their expert com-mittee with individuals biased in favour of FSC. The energy companies’ response to this apparent bias has been weak. The new SDE+ subsidy system is in-tended to replace the MEP system and re-establish co-firing in the Netherlands. Unfortunately, protracted negotiations be-tween Dutch energy companies and envi-ronmental organizations have delayed its implementation. Two energy companies applied for SDE+ co-firing subsidies in 2015 but were unsuccessful because the annual budget had been already taken up for wind energy projects. The next oppor-tunity to apply won’t be until 2016. This means that the earliest we could see any new co-firing in the Netherlands would be in late 2016 at Essent’s Amer 9 plant, which has already been converted for biomass. Nuon, EON, and GDF Suez all have biomass conversion projects in the pipeline, but no investment decisions will be take until the results of the 2016 round of SDE+ subsidy applications are known. If any of them are successful, they will have to complete their conver-sion projects within three years to retain the SDE+ subsidy. This means that the next wave of co-firing plants will not come on line until 2018 at the earliest. So far, American pellet producers are telling us that the requirements for FSC or equivalent certification agreed to in the covenant may make it impossible for them to ship to the Netherlands. If this supply is not available, then the Dutch energy companies may conclude that there is too much supply risk to justify going ahead with biomass conversions at all, which would obviously result in eliminating the potential Dutch pellet market to Canada as well. If the Dutch wood pellet market does become re-established, Canada will be able to meet the sustainability require-ments by shipping pellets made from sawmill residuals. However, there is still doubt as to whether Canadian pellets made from SFI or CSA certified round wood would be acceptable due to the preference for FSC. For the short term this won’t be a problem because pro-ducers will be able to send pellets made from round wood to other export desti-nations, accounting for the round wood volumes using a mass balance approach. However, this mass balance approach may not hold for the long term if energy companies and environmental organiza-tions in other countries decide to adopt a similar covenant as the Dutch. Cer-tainly their success in the Netherlands will embolden environmental organiza-tions to achieve the same in neighbour-ing European countries. We will soon see how determined the Dutch government is to meet its obli-gations under the European Renewable Energy Directive and whether the new SDE+ subsidy scheme and regulation provide sufficient incentive for Dutch energy companies to begin co-firing once again. Only then will we know if the Netherlands will re-establish itself as a leading market for wood pellets. • Gordon Murray is executive director of the Wood Pellet Association of Canada. He encourages all those who want to support and benefit from the growth of the Canadian wood pellet industry to join. Gordon wel-comes all comments and can be contacted by telephone at 250-837-8821 or by e-mail at [email protected]. Canadian BIOMASS 9
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