Biomass or Biomess?: Examining sustainability schemes as way to address stakeholder concerns over the use of forest biomass

Abstract: Stakeholders are voicing concerns over the social and environmental impacts of components of Europe’s renewable energy strategy that will significantly increase the region’s demand for forest biomass. Energy companies must address these concerns if they are to manage financial, reputational, regulatory and competitive risks. Sustainability schemes may help reduce such risks by increasing the social trust and legitimacy in both the company and its supply chains. This paper examines how the application of sustainability schemes can help European utility companies address stakeholder concerns over the use of solid biomass in large scale energy generation. Both primary and secondary research techniques are applied for data collection and elements of stakeholder theory are used to set out (i) who the most relevant stakeholders are; (ii) what their principal concerns are; and (iii) how these concerns may best be addressed through sustainability schemes. The research involved an in-depth review of eleven sustainability schemes and a survey with responses from 140 biomass experts. The sustainability schemes were benchmarked against the EU’s legislative requirements and against stakeholder ratings in order to show which sustainability criteria are covered by which scheme, and to what extent each scheme satisfies legal and stakeholder requirements. The research results indicate that government representatives and NGOs are the most significant stakeholders. They also showed that, while no scheme currently addresses all concerns highlighted by these stakeholders, the criteria of the FSC, the PEFC, the ISCC and the IWPB are comparatively comprehensive. Further, results indicate that, in practice, the actual sustainability criteria may be less important for a scheme’s trustworthiness than the name of the organisation leading the scheme. The work finds that NGO-led schemes engender the highest level of trust by stakeholders and are thus most likely to satisfy their demands. This comes despite equal or greater levels of stringency in a number of industry-led schemes. Despite the current legitimacy concerns with their efforts, this research indicates that utilities should continue their efforts; in particular under the IWPB certification system, as the scheme provides a valuable opportunity to consolidate the proliferation of existing standards. Regardless of which sustainability scheme is chosen, energy providers will benefit if they clearly recognise the significant limitations of sustainability schemes. When devising mediumto long-term strategies, they must proactively account for the risks that stem from a highly volatile policy environment created by increasingly vehement stakeholder opposition to the large-scale utilisation of biomass before locking themselves into substantive infrastructure investments.