1. Scope

This Standard provides requirements, recommendations, and guidance for understanding the potential
risks to biomass supply chains, including the following risk categories and associated risk factors:
a) supplier risk (including credit-worthiness/problematic future solvency of supplier; supplier
contracts; supply inventory; conflicts of interest/vested interest with competing market; supplier
control over production and transportation; distance from the proponent; supplier’s experience;
supplier harvesting/collection/processing capacity; supplier motivation; human resource impacts);
b) competitor risk (including competitor influence on the feedstock market; competitors’ competitive
advantage);
c) supply chain risk (including feedstock availability; historical issues; non-weather based externalities;
risks related to feedstock production, harvest, and collection; transportation; supply chain
resiliency; climate and natural risks; political and social; sustainability and environmental concern;
greenhouse gas (GHG) accounting system);
d) feedstock quality risk (including feedstock quality; specific feedstock quality variables);
e) feedstock scale-up risk (including feedstock scale-up); and
f) internal organizational risk (including feedstock cost margins; on-site inventory; internal feedstock
yard operations; management and personnel).
The Standard applies to activities starting at harvest point and ending at plant gate.
1.2
In this Standard, “shall” is used to express a requirement, i.e., a provision that the user is obliged to
satisfy in order to comply with the Standard; “should” is used to express a recommendation or that
which is advised but not required; and “may” is used to express an option or that which is permissible
within the limits of the Standard.
Notes accompanying clauses do not include requirements or alternative requirements; the purpose of a
note accompanying a clause is to separate from the text explanatory or informative material.
Notes to tables and figures are considered part of the table or figure and may be written as
requirements.
Annexes are designated normative (mandatory) or informative (non-mandatory) to define their
application.

Keywords

risk indicator; feedstock; BSCR

Rationale

One of the key challenges to the rate of growth of the bio-industry is that the risks associated with
biomass supply chains are not well understood. While concerns about technology, construction, and
offtake have clear paths to resolution, at present there are no established protocols, standards, or
recognized industry best practices for developers, investors, commercial lenders, insurance companies,
and rating agencies to utilize and rely upon to empirically demonstrate biomass supply chain risk.
The absence of a standardized and recognized approach means that the debt and capital markets are
independently using inconsistent approaches and evaluation criteria, leading to unreliable assessments
of bio-project risks. This results in significant project financing barriers for bio-projects and in millions of
dollars of “financial-drag” on the projects that are eventually built.
This Standard presents a standardized biomass feedstock risk assessment protocol designed to enable
stakeholders (owners, investors, lenders, capital market entities, insurers, contractors, customers,
government departments, regulators) to more accurately quantify bio-feedstock risk and reduce the
level of uncertainty that is currently a significant driver of low bio-project credit ratings and high capital
costs. Development of this Standard supports the goal of a viable, sustainable domestic biomass
industry that produces renewable biofuels, biochemicals, bioproducts, and biopower by decreasing
project stakeholder risks to investment in bio-economy projects and by increasing the number of
projects that pass the crucial financing stage. This Standard represents the current science in terms of
quantification of biomass supply chain risk.
Development of this Standard is the first of a two-phase process to achieve the ultimate goal of creating
efficiencies for mainstream capital markets that help drive capital into bio-economy plant construction
more rapidly and at a reduced cost. Phase 2 consists of developing a biomass risk rating framework
based on this Standard (i.e., the BSCR rating framework) to enable independent third-party evaluators
to carry out quantitative assessments of feedstock risk of bio-project supply chains. Combined with this
Standard, an integrated BSCR rating framework will provide capital markets with the tools needed to
drive investment at the scale required for delivery of Canadian bio-economy policies. It will do so by
enabling investors and capital markets to efficiently quantify biomass feedstock risk, accurately price
that risk, and prioritize investments with minimum feedstock risk.
The Standard is organized into six risk categories that fully encompass biomass feedstock supply chain
risk: supplier risk, competitor risk, supply chain risk, feedstock quality risk, feedstock scale-up risk, and
internal organizational risk. Each risk category identifies specific risk factors (i.e., the itemized risk
elements within each category), risk indicators (i.e., the markers of risk for each factor), and establishes
guidance to point users to best available methods and tools, to measure and mitigate feedstock risks.

The title and scope are in draft form and are under development within this ASTM Committee.