• What is ISCC’s view on the claim that the certification system relies on self-reporting and trust?

Under ISCC, the entire supply chain is covered by certification, meaning that each economic operator is certified and controlled through at least annual audits.

The very first element in waste and residue supply chains where the materials occur or are generated are called Points of Origin. These can either be certified individually or covered by a group certification approach by the certificate of a Central Office or a Collecting Point. For those Points of Origins that are not individually certified, an annual self-assessment is required, and a signed self-declaration or self-assessment must be submitted to the Collecting Point or Central Office. A sample of the Points of Origin may be subject to on-site audits.

All individually certified economic operators must pass at least annual on-site (re-) certification audits to be granted an ISCC certificate. Additional surveillance audits take place in waste-based supply chains three and/or six months after the initial certification, as well as in cases of detected or suspected problems.

These audits are conducted by independent third-party auditors of cooperating Certification Bodies who verify the compliance with the requirements set out in ISCC system documents .

• Do auditors verify on-site whether materials meet the ISCC requirements?

Certification audits must generally be conducted on-site. During the on-site audit, the auditors verify that the economic operator meets the ISCC requirements.

• What mechanisms has ISCC in place to avoid errors or fraud along the supply chain?

ISCC cooperates with third-party Certification Bodies. These CBs issue the ISCC certificates following the successful audit of an economic operator.

All individually certified economic operators must pass at least annual on-site (re-) certification audits to be granted an ISCC certificate. Additional surveillance audits may take place in waste-based supply chains three and/or six months after the initial certification, as well as in cases of detected or suspected non-conformities.

Additionally, ISCC operates the ISCC Integrity Programme which is a tool to ensure compliance of ISCC System Users and Certification Bodies by conducting Integrity Assessments through independent Integrity Auditors. It is part of the overall Quality Management of ISCC.

Please find here further information: Quality, Integrity and Risk Management at ISCC and System Document 102.

• How does ISCC ensure that companies do not set up new companies and get re-certified?

In the registration process of new companies with ISCC, our data system conducts automatic checks if the data from the new registration belongs to an excluded System User. If a legal representative or contact of a new registration has worked with an excluded System User, this new registration will be blocked.  Additionally, ISCC conducts data checks such as the verification of email addresses and physical addresses being already used.

Also, the voluntary schemes ISCC, 2BSvs, KZR Inig, RSB and REDcert have agreed to improve their already established communication channels for exchanging certification-related information. There will now be a systematic and immediate exchange of suspended and withdrawn certificates between those schemes. The sharing of this information will contribute to the common goal of preventing economic operators from ‘scheme hopping’ as a result of suspended or withdrawn certificates.

• Once ISCC introduces new rules, how does it guarantee that Certification Bodies and their auditors are fully aware about the updated traceability and certification requirements concerning waste and residues?

The updated requirements for wastes and residues are communicated through system updates which are emailed to all Certification Bodies, auditors and stakeholders. These system updates are mandatory for CBs and System Users to be complied with and are also available in detail on the website.

It is the auditor’s responsibility to determine the eligibility of waste/residue materials under ISCC and the plausibility of yields at the point of origin. ISCC has developed a guidance document for auditors, specifically for POME (Palm Oil Mill Effluent). Further documentation for other advanced waste/residue biofuels is in progress, along with a supply chain knowledge base explaining the origin of waste/residue material at different steps in the supply chain.

Additionally, more general information is also shared via our Newsletter which one can subscribe, too.Lastly, ISCC auditors must have existing experience and undergo training as described in ISCC EU – 103 Requirements for Certification Bodies and Auditors.

Auditors are also provided with the ISCC audit procedures to follow when carrying out an audit. These audit procedures are updated regularly by ISCC to include all new requirements.

• Does the recent strengthening of requirements for waste and residue supply chains imply that existing requirements were not effectively implemented by auditors and companies?

ISCC is constantly strengthening its requirements to ensure a robust system. By implementing changes, we can maintain and help to prevent any potential fraud activity, misconduct, or non-conformities.

While this does not imply that existing requirements were not implemented effectively, we are dedicated to continuously improving our system by strengthening it to foster long-term social, environmental, and economic impacts, and to adapt to changing economic environments.

ISCC has strengthened requirements for auditing wastes and residues in response to industry reports of possibly fraudulent flows of these materials. These strengthened requirements are additional measures to ensure the integrity of the certification system.

• Have the system user with a currently valid ISCC Certificate demonstrated compliance with the existing requirements for waste and residues?

All System Users with a valid ISCC certificate have passed a successful annual (re-)certification audit by a Certification Body. If the system users are handling waste and residues, the respective requirements for waste and residues are part of the audit. Successful means that no non-conformities were detected by the certification body, or that all non-conformities could be corrected by the System Users within a timeframe of 40 days after the audit.

In the context of the ISCC Integrity Programme, ISCC additionally conducts Integrity Assessments by independent auditors. In cases where non-conformities by System Users and/or CBs are detected, sanctions are implemented and certificates may be suspended or withdrawn, depending on the severity of the case.

Valid certificates on the ISCC website indicate that neither in the certification body audit, nor in a potential Integrity Assessments, severe non-conformities have been detected.

• Do certification audits for operators collecting UCO (used cooking oil) from points of origin have to be conducted on-site?

Companies who produce, trade, store or otherwise take ownership of biofuels, including those made from waste materials such as UCO, must pass an on-site audit to be granted an ISCC certificate.

Points of Origin where the waste material such as UCO occurs or is generated (e.g., restaurants) are covered under the certificate of the so-called Collecting Point and are audited on-site based on a sample audit approach.

During the on-site audit of a UCO Collecting Point, the auditor carries out checks on the correctness and plausibility of amounts of incoming and outgoing material. Checks that take place include, for instance, that the quantities of the incoming and outgoing deliveries of UCO are consistent with the amounts stated in commercial contracts. Also, that actual quantities from weighbridge tickets, delivery notes, or sustainability declarations of the incoming and outgoing sustainable material match with the information from the reporting system of the company. Additionally, to the above-mentioned obligatory samples of Points of Origin that must be audited, where inconsistencies are suspected, the auditor is obliged to physically verify the Point of Origin.

• Is there a laboratory test to distinguish between UCO (used cooking oil) and a virgin vegetable oil such as palm oil, which would make the certification of UCO more straightforward?

Used cooking oil, in the context of the EU’s waste-based biofuel regulation, is not currently defined by a laboratory test. ISCC is in discussion with laboratories about methodologies to distinguish between different kinds of raw materials and products to prevent fraudulent mislabelling. Distinguishing virgin oil from used cooking oil when they have been converted to biodiesel and HVO (hydrogenated vegetable oil) is challenging.  We are in a continuing dialogue with Member States authorities and customs authorities to evaluate the effectiveness of laboratory tests in this context.

• What is the role of ISCC’s Technical Committee for Wastes, Residues and Advanced Low Carbon Fuels?

ISCC Stakeholder Committees form an integral part of the ISCC Association and are intended to support a constructive dialogue on the continuous development of the ISCC system. Stakeholder Committees are appointed by the Board of the ISCC Association to facilitate the discussion of topics with high practical relevance. Practical experiences are discussed and, where possible, lead to improvements of the ISCC system.

The circular economy is a model to reduce consumption of raw materials and to establish a sustainable growth onwards. The attention towards this concept keeps rising on a global scale. Many EU member states provide incentives for the use of waste- and residue-based biofuels in the framework of the Renewable Energy Directive (RED II), which highlights the importance of waste and residues also with respect to third-party certification.

In that context, prospectively we are determined to host another ISCC Technical Committee for Waste, Residues and Advanced Low Carbon Fuels. You can see any updates on our events page.

• What are the measures taken by ISCC to support the auditors in the identification of discrepancies and potential risks?
  

ISCC is in the process of developing a mapping tool related to waste and residue materials for our auditors.

This system will allow users to visualize specific areas to better understand the dependencies between locations in the value chain (i.e., points of origin, dependent collecting point samples, collecting points, and refineries). For example, the visualisation of locations will provide evidence of the distances between points of origin and collecting points, it will display networks of waste residue collectors as well as the respective travel and audit time, and the plausibility of such a setup.

Other planned functions include plausibility checks of waste/residue material quantities in a region or country.

• How do auditors qualify to conduct an ISCC audit and especially in the case of waste and residues?

Certification Bodies recognized by the Federal Office for Agriculture and Food (Bundesanstalt für Landwirtschaft und Ernährung – BLE) or by a competent national authority or accreditation body may cooperate with ISCC, if the requirements laid down in the ISCC EU 103 – Requirements for Certification Bodies and Auditors are met. From these Certification Bodies auditors are additionally trained by ISCC to be able to conduct ISCC certification audits.

All auditors must meet general requirements and qualifications in order to conduct ISCC audits, as well as additional specific requirements depending on the kind of audits they conduct.

Requirements include:

• minimum 2 years of work experience in the relevant work area (3 years of work experience overall);
• minimum 40 hours of audit training (e.g., according to ISO 19011);
• 3 complete audits (completed within the last two consecutive years) for a total of at least 15 days under the direction and guidance of an audit team leader.
• It is mandatory for auditors to complete and actively participate in the three-day ISCC Basic Training. At the end of these training courses, auditors are required to pass a test on the topics and methodologies covered which needs to be redone at least every 5 years. ISCC also offers training modules for auditors with a focus on specific topics. In the situation where the CB is conducting audits and certifications for any element in the supply chain handling waste or residues, the CB must ensure that the auditor has already participated in an ISCC Waste and Residues Training, which also needs to be redone every 5 years.

For a comprehensive overview of the requirements and qualifications, please refer to chapter 5 of the document ISCC EU 103 – Requirements for Certification Bodies and Auditors.

• How does ISCC monitor the performance of Certification Bodies and auditors and what sanctions are applied to those that do not reach the necessary standard?

ISCC operates the ISCC Integrity Programme that was launched as a tool to enable closer monitoring of the CBs’ verification activities and companies’ compliance and is based on an ongoing assessment process. It aims to ensure a consistent, objective and reliable audit and certification process by all CBs cooperating with ISCC globally.

In the event of detected non-compliant behaviour of a CB, its auditors or representatives, ISCC may impose sanctions against the CB or the individuals responsible for the non-conformity. ISCC assesses the type and level of non-conformity and determines the level of sanction on a case-by-case basis.

There are four levels of sanctioning: Warning, Yellow Card, Red Card, and Contract Cancellation. Furthermore, ISCC reserves the right to impose a contractual penalty if there is a violation against the ISCC requirements.

In addition, ISCC is also entitled to impose measures which are suitable for preventing future non-conformities or for ensuring future compliance of the CB with ISCC requirements. Examples for measures include additional training of auditors and/or members of staff. ISCC is entitled to set a time frame for the implementation of the measures by the CB, and the CB has to provide evidence to ISCC that the measures have been implemented within the set time.

All details related to the sanctions and preventing measures for CBs are explained in detail in the ISCC EU 102 – Governance.

• During the Integrity Assessment, does the ISCC Integrity Auditor check the same sites that have been audited by the certification body before?

During the ISCC Integrity Assessments, Integrity Auditors conduct audits at the sites of System Users that have previously been verified by the CB. The process aims at verifying if the System User is compliant with ISCC requirements, but also if the audit by the CB has been carried out in line with ISCC standards.

For sample Integrity Assessments of Points of Origin, these may take place at the same or different sites that were audited by the CB before.

• In the cases of withdrawn certificates has ISCC conducted Integrity Assessment on the respective auditors and Certification Bodies?

ISCC takes appropriate actions concerning the Certification Body (CB) in the event of an audit performed by the CB that does not meet the required standards. Such insufficient performance may be identified during an Integrity Assessment of the System User, prompting necessary investigations and corrective measures. However, it is important to note that when a non-conformity of the System User is detected during an Integrity Assessment, it does not necessarily indicate a misperformance by the CB. For example, non-conformities can emerge after the audit performed by the CB has taken place, and, as a result, there may not be a direct correlation between a suspended or withdrawn certificate of a System User and a misperformed audit by the CB.

The auditors who carry out the Integrity Assessments on System Users, report on both the economic operator and the original auditor.

In case a misperformance by the CB is detected, different corrective measures are taken depending on the level of misperformance, as referred in the ISCC EU 102 –  Governance. In the case of the performance needing to be improved, ISCC requires the CB/auditor to implement improvement measures. This can include but is not limited to: further training, corrective actions, new assessments as well as specific training for individual auditors. Repeated failures can lead to suspension of individual auditors from conducting further ISCC audits.

• What is the latest update on the Integrity Audits that have been conducted in connection with the allegations of fraud regarding Chinese biodiesel imports?

Since the beginning of 2023, ISCC has initiated and is further planning Integrity Assessments in China and in Southeast Asia. A part of them was conducted as unannounced desk-based assessments of traceability and mass balance data, the other part as announced or unannounced on-site audits. The results of the Assessments are being carefully analyzed and evaluated by the ISCC Integrity Management. In case detected non-conformities lead to suspensions or withdrawals of certificates, or to exclusions of System Users from re-certification, these will be published on the ISCC website.

 

• Have ISCC Integrity Auditors been able to conduct on-site audits in China?

The first on-site Integrity Assessments by ISCC Integrity Auditors were conducted in China in July 2023. Further on-site Integrity Assessments in China are scheduled for August 2023, and depending on the outcomes, further candidates could be identified for on-site assessments in the following months.

• What action has ISCC taken in response to industry reports of possibly fraudulent flows of wastes and residues?

ISCC is in continuous dialogue with System Users, Certification Bodies, authorities, associations, the European Commission, and other voluntary schemes to closely monitor the current situation. As a result, ISCC has taken the following actions.

Unannounced integrity audits;

• Follow up with stakeholders;
• Discussion with laboratories and customs authorities;
• Engagement with other voluntary schemes to ensure a level playing field;
• Implementation of tightened system requirements;
• Development of yield guidelines for waste / residue points.

70 unannounced integrity audits, connected with allegations of biodiesel fraud, have been initiated on Chinese biofuel producers. Out of these, six certificates have been withdrawn.

Additionally, an enhanced number of on-site integrity audits have been conducted out by ISCC Integrity Auditors in Southeast Asia since the beginning of 2023, and since July 2023 also in China.

• How is ISCC working with the European Commission or German Ministry investigating mislabelled imports?

ISCC is in continuous dialogue with the European Commission and key Member States to target mislabelled imports. As a result, three certificate holders were subject to on-site audits in China that were conducted in close cooperation with the Certification Body and authorities of a Member State.

• How does the traceability approach under ISCC work so that biofuels and their raw materials can be certified and traced?

Certification Bodies provide summary audit reports and ISCC publishes these summary audit reports for all certified operators on its website, together with lists of operators from whom certificates have been withdrawn. However, reporting of information relating to purchased quantities of raw materials and sales volumes of biofuels is not a requirement, as this information is regarded by most operators as commercially confidential.

ISCC organises regular meetings with representatives of the recognized Certification Bodies. The aim of those meetings is to exchange practical feedback and experiences from the application of ISCC, to discuss best practices, to identify potential risks to the system and to facilitate improvements of the system.

• What sanctions does ISCC apply to economic operators who make false declarations of materials?

ISCC will immediately have the Certification Body withdraw an operator’s certificate if waste materials such as UCO are falsely declared. This means that the operator is no longer able to trade UCO or biofuels derived from it, for the purposes of providing renewable road transport fuels that are eligible for being counted towards the share of renewable energy in the transport sector in any Member State. In practice, this denies the operator access to the most important market for UCO and UCO derived biodiesel.

• Does ISCC provide information about withdrawn certificates and excluded companies?

In the case of suspension or withdrawal of a certificate, ISCC will immediately update the status of the certificate on the online certificate database. In the database, you can browse all ISCC certificates, or sort them by “Valid Certificates”, “Withdrawn Certificates”, or “Fake Certificates”. If you want to be notified when a certificate is withdrawn or a System User excluded, there is a sign-up form.

Exclusions from recertification and their duration are also published on the website .

ISCC will not publish specific reasons for the suspension and withdrawal of a certificate or the exclusion of System Users, but it can, if required, notify the Certification Bodies, the European Commission and national authorities about the suspension and withdrawal of certificates as well as the exclusion of System Users. For this topic, please see chapter 10.2.1 of the document ISCC EU 102 – Governance.

• Why is biofuel sourced from waste and residue material connected to a higher risk of fraud?

Under the REDII, incentives exist that foster the use of waste and residue materials for the production of biofuels. These incentives include, e.g., the double-counting approach, and GHG-emissions savings for waste-based supply chains, leading also to price premiums for certain waste and residue materials. Therefore, these materials may pose a higher risk of fraud than non-incentivized raw materials. Therefore, under ISCC, waste and residues-based supply chains are considered as high-risk supply chains.

ISCC has set up different measures to reduce to the minimum the risk in such cases. These include, for example:

• mandatory surveillance audits to be conducted by the Certification Body six months after the first (initial) certification of any economic operator in a high-risk supply chain (please see chapter 3.4.10 of the document ISCC EU 203 – Traceability and Chain of Custody);
• the ISCC Integrity Programme (see chapter 4.10 of the document ISCC EU 103 – Requirements for Certification Bodies and Auditors)
• the latest strengthened requirements for waste and residue supply chains (see the ISCC System Update of 28 April 2023).

• What are ISCC’s comments on the plan for a centralized database in the EU and its delay in enforcement? Is ISCC supportive of that plan and how will that change transparency in the supply chain?

ISCC fully supports the “Union Database” (UDB) for biofuels and bioliquids, as set out in the RED II. The database aims to ensure the tracing of liquid and gaseous transport fuels that are eligible for being counted towards the share of renewable energy in the transport sector in any Member State. The potential for additional verification of flows of materials down the supply chain, together with independent third party ISCC audits, will strengthen biofuel certification.

• What is the role of ISCC in setting up the European Union Database?

ISCC has been cooperating with the EU and the other voluntary schemes to ensure the database is launched on time. The amount of information that must be transferred and the number of actors involved, requires thorough planning. ISCC has set up a dedicated team in order to meet the timeframe set by the EC and is counting on the cooperation of its recognized Certification Bodies to transfer the data and make sure the database is fully functioning as quickly as possible. Its aim will be to ensure further traceability and transparency along the supply chain and mitigate the risk of fraudulent behavior by economic operators.

• Will the UDB (Union Database) help to mitigate the risks of fraudulent behaviour?

Yes, the UDB will help to prevent fraudulent behaviour because its aim will be to ensure further traceability and transparency along the supply chain. ISCC is continuously working and supporting the EC UDB team.

Therefore, ISCC will implement a traceability database by the end of the year. This database will also connect to the UDB.

A pilot program involving ISCC system users is underway, covering the value chain for waste/residue materials from the point of origin down to the biofuel producer. Material uptake from the point of origin will be supported by a mobile app, which, among other functionalities, matches the restaurant location with the position of collector vehicles. The ISCC transactional database will be part of an integrated IT solution, which further includes the ISCC HUB.

• When will ISCC onboard all Economic Operators to the Union Database for Biofuels (UDB) and make UDB reporting mandatory for all System Users?

The UDB is not actively operational yet. However, ISCC is onboarding Economic Operators, as they provide additional information needed. Once the UDB is active and operational, ISCC will be collecting this data online via the ISCC Hub.

Key features of the ISCC HUB are the digital registration and certification process as well as online credibility check of potential system users requesting a registration with ISCC. ISCC is also exploring options to enhance the credibility check with analysis results from social listening. The Hub is expected to go live by the end of this year.

More information can be found on the ISCC webpage about the Union Database.