RED BP scheme facilitates biomass sustainability compliance in Latvia and Lithuania, while Estonia yet to adopt

As the European Union tightens rules to reduce greenhouse gas (GHG) emissions, certifying biomass is becoming important—even for small-town heat plants. The Renewable Energy Directive II (RED II) sets big goals for EU countries: increase renewable energy use to 32% by 2030 and cut GHG emissions. This raises the standards for biomass sustainability. In response, Latvia and Lithuania have chosen to adopt the RED BP biomass sustainability scheme, developed by Baltpool, to help biomass buyers and suppliers comply easily and efficiently. Estonia, however, has not yet utilized this scheme, as it is not approved there.

RED BP biomass sustainability scheme in Latvia and Lithuania

Biomass is a key part of the EU’s plan to reduce carbon emissions, and RED II helps make this happen. But the new rules bring challenges. Since January 1, 2023, RED II has changed the biomass market—biomass is no longer automatically considered sustainable and carbon-neutral. All EU countries must now prove that their biomass is sustainable by providing detailed data on the origin of raw materials and other criteria.

Latvia and Lithuania have chosen a path to meet these requirements by adopting the RED BP scheme. This centralized certification process reduces paperwork for individual companies and ensures that biomass meets strict environmental standards, like protecting forests, maintaining soil quality, and reducing GHG emissions. Estonia has not yet adopted this solution, as the scheme is not approved there.

In May 2023, the Latvian government officially approved the RED BP scheme as suitable for verifying sustainability for businesses in the country. “Rīgas Siltums,” the largest biomass user in Latvia, has already seen the benefits in their daily work. Procurement Project Manager Andis Balka said:

“The RED BP biomass sustainability scheme has greatly reduced our administrative workload because “Baltpool” collects most of the necessary data and documents from the biomass purchase and sale contracts made on the exchange. This centralized way of collecting documents lets us focus on our main activities instead of bureaucratic requirements, especially since we can have over 70 supply contracts in a week. Reports are easy to access in the system, and with one click, they can be prepared and printed. Also, the lower biomass costs allow us to reduce heating prices for end consumers, giving real benefits to people.”

In Lithuania, companies are also benefiting from the RED BP scheme. Vilniaus kogeneracinė jėgainė (Vilnius Combined Heat and Power Plant) received its first biomass load already verified with the RED BP label. Giedrius Vasiliauskas, Chief Commerce and Development Officer, said:

“This has made our sustainability efforts easier from day one. RED BP handles all the paperwork, and we can focus on our main activities. The scheme ensures that our biomass meets all the strict environmental requirements, and we appreciate the transparency it brings to our supply chain.”

Estonia’s Position

In contrast, Estonia has not yet adopted the RED BP scheme, as it is not approved there. However, Estonia is using voluntary schemes to meet the requirements. Estonian biomass market participants are still collecting sustainability documentation independently, which increases administrative burdens and the risk of errors. This approach can be challenging, considering that RED II sets strict sustainability and transparency standards. Non-compliance can lead to additional costs due to emission quotas.

There is an opportunity for Estonia to consider adopting the RED BP scheme, as Latvia and Lithuania have done, to simplify compliance and reduce administrative efforts.

Why Consider RED BP?

The RED BP scheme helps companies comply with EU rules with minimal administrative burden. Instead of spending hours collecting documents, participants benefit from:

Less Work – RED BP scheme gathers the necessary data for the declaration from existing data in biomass exchange, reducing the need for extra staff and allowing companies to focus on their core activities.

Cost Savings –The scheme is free for participants of the Baltpool biomass exchange.

Transparency and Compliance – RED BP scheme ensures that biomass is sourced sustainably, meeting strict environmental rules like forest protection, soil quality maintenance, and GHG emissions reduction. All relevant details are documented and accessible, giving confidence to both suppliers and buyers.

Data Privacy – Each party in the supply chain sees only information relevant to them, while the full data set is accessible only to Baltpool. This keeps business information private while ensuring transparency throughout the supply chain.

Looking Ahead: Preparing for RED III

Looking to the future, the European Union is getting ready for the RED III directive, expected to start in 2025. This directive will make the rules even stricter, reducing the minimum power plant size that needs certification from 20 to 7.5 megawatts. This means almost all biomass-using companies in Latvia and Lithuania will have to meet sustainability requirements.

Estonia will also need to comply with these stricter requirements, and adopting solutions like the RED BP scheme could help ease the transition and ensure compliance with EU regulations.

Tomas Jorudas, Head of Commerce at Baltpool:

“Latvia and Lithuania have shown how to effectively and transparently manage sustainability processes. The RED BP scheme not only benefits businesses by reducing administrative burdens and costs but also positively impacts the economy and consumers by potentially lowering heating prices. As the EU moves towards stricter sustainability requirements, other countries like Estonia might consider similar approaches.”

RED BP is promoting sustainable biomass use in Latvia and Lithuania, helping them meet the EU’s higher sustainability standards efficiently. By simplifying compliance with EU requirements, reducing paperwork, and ensuring transparency, RED BP benefits businesses and contributes to environmental goals.

As the EU moves towards stricter sustainability requirements with the upcoming RED III directive, adopting practical solutions like the RED BP scheme will be important. The steps taken by Latvia and Lithuania in this area may be informative for Estonia and other countries considering how to adapt to new regulations.