RED BP scheme expansion in the Baltics: Transparency and sustainability become the norm in biomass trading

2024 was a year of significant changes for the Baltic biomass market, with the RED BP biomass sustainability scheme becoming one of the key mechanisms ensuring transparency. Market dynamics continued to evolve, and both suppliers and buyers increasingly sought solutions that not only met sustainability requirements but also simplified trading processes. In 2024, the RED BP scheme emerged as the leading biomass sustainability certification in the region, encompassing 122 suppliers and 69 buyers. The total volume of biomass purchased with RED BP certification reached 6.4 TWh, accounting for as much as 81% of all biomass traded and delivered via the exchange in Lithuania and Latvia. In Latvia alone, biomass traded under the RED BP label represented an even larger share—84% of all biomass transactions concluded on the Blackpool Exchange in the country.

“Ensuring sustainability and transparency is no longer an individual country’s decision but a market-wide requirement. The more participants join a certified trading system, the clearer the market conditions become. This improves forecast accuracy and reduces risks for both buyers and investors,” emphasizes Vaidotas Jonutis, Head of Trading at the Baltpool biomass exchange.

Lower-quality biomass takes the market lead

One of the most notable market shifts in 2024 was lower-quality biomass—classified as SM3/SM4 wood chip products—overtaking higher-quality biomass (SM1/SM2) sales for the first time in Baltpool’s history. Annual trading volumes for lower-quality biomass increased by 31.3%, accounting for more than half of the total biomass trade in the Baltic region.

“Previously, logging residues like branches often rotted in forests, releasing CO₂ regardless. Today, these residues are used as fuel in cogeneration plants. This approach efficiently utilizes raw materials, reduces waste, and decreases dependency on imported fuel,” explains V. Jonutis.

Jonutis adds that EU directives also encourage broader use of logging residues to minimize resource waste and boost local production efficiency.

Recognition of the RED BP scheme

Sustainability considerations have become integral to the biomass market. In Latvia, the RED BP scheme has been officially recognised as suitable for demonstrating biomass sustainability, easing compliance with regulatory requirements. This recognition allows Latvian companies complying with national regulations to use RED BP directly, avoiding additional administrative burdens.

Among Latvia’s most active RED BP users is Adven Latvia, which provides centralised heating to the largest municipalities in Latvia’s Vidzeme region. The company chose the RED BP scheme to ensure sustainability compliance and simplify biomass procurement.

“When we began exploring efficient ways to meet EU Renewable Energy Directive (RED II) requirements, we were already working with Baltpool. Therefore, when the opportunity arose to purchase certified biomass directly, we made the decision quickly—it was a natural step. The RED BP scheme became the simplest and most effective way for us to ensure compliance with sustainability standards,” says Māris Kānītis, Head of Adven Latvia.

The company initially considered developing an internal sustainability system but quickly realised it would require substantial additional resources and create extra administrative burdens, ultimately increasing service costs. By adopting the RED BP scheme, Adven Latvia significantly reduced bureaucracy and implemented a clear, centralised data management model.

“There are various ways to ensure sustainability—you can invest in dedicated teams to verify suppliers and documentation, or choose a reliable, comprehensive system service. Our decision was clear: RED BP allows us to easily purchase certified biomass and ensures full compliance,” adds Kānītis.

He also highlights clear and easily accessible data as one of RED BP’s greatest advantages.

“The system allows us to quickly view necessary certificates, verify supply chain data, and provide complete information to auditors. This eliminates excess documentation and helps our team operate more efficiently,” Kānītis emphasises.

Future outlook: A more transparent and efficient market

Sustainability certification is increasingly becoming integral to biomass trading. This is especially relevant in Latvia, where market participants actively seek transparent, administratively streamlined solutions. This trend reflects the broader market shift towards increased transparency, clearer standards, and more efficient trading processes.

“The RED BP scheme has already demonstrated its effectiveness in the Baltics, and now we aim for it to gain recognition throughout the EU. Broader adoption at the EU level would allow market participants to benefit from the scheme regardless of national regulations, further reduce administrative burdens, and enhance market transparency. This not only simplifies trading but also contributes to creating a more transparent, sustainable biomass market,” concludes Vaidotas Jonutis, Head of Trading at Baltpool.