Briefing Document: ISCC Proof of Compliance (PoC) Framework

Date: March 31st, 2025

Source: "ISCC-Guidance-Document-Proof-of-Compliance-V1.0.pdf"

1. Introduction

This briefing document summarizes the key aspects of the International Sustainable Carbon Certification (ISCC) Proof of Compliance (PoC) framework as detailed in the "ISCC Proof of Compliance Guidance Document V1.0." This new framework aims to address the challenge of Proof of Sustainability (PoS) unavailability for final users in complex regulatory environments, enabling them to make legitimate emissions reduction claims.

2. Main Themes and Key Ideas

The central theme of this document is the introduction of the Proof of Compliance (PoC) framework as an optional, standardized mechanism within the ISCC system. This framework allows fuel suppliers to forward documentary evidence of sustainability and Greenhouse Gas (GHG) emissions savings to downstream economic operators (final users like aircraft operators and shipping companies) even after the original Proof of Sustainability (PoS) document has been surrendered for compliance by the fuel supplier.

Key Challenges Addressed

• Unavailability of PoS for Final Users: The document highlights that under current regulations, once a fuel supplier submits a PoS to a competent authority for compliance (e.g., under EU RED II), that PoS cannot be re-issued or re-used. This prevents final users from obtaining the necessary documentation to make their own emissions reduction claims, even when allowed by regulations like the EU Emissions Trading System (EU ETS) or FuelEU Maritime.

• "However, the current process and flow of sustainability documentation and submission of PoS documentation to competent authorities under certification systems for compliance purposes does not yet properly reflect this reality. It is not allowed for a PoS document to be “re-issued” or “re-used” to validate compliance further downstream in a supply chain for the same batch of certified fuel once used under a compliance scheme by a fuel supplier."

• Need for a Standardized Framework: The absence of PoS documentation for final users necessitates a standardized way to transfer the relevant information.

• "Given the absence of PoS documentation, it is therefore necessary to provide an optional standardised framework under which it is possible for fuel suppliers and downstream economic operators to forward and receive the required documentary evidence enabling claims on a batch of certified fuel, when allowed by competent authorities."

• Preventing Double Counting: The framework is designed with clear rules and a robust auditing structure to prevent the improper double counting of certified fuel volumes and associated GHG emissions reductions.

• "Crucially, this framework must feature clear and transparent rules and be underpinned by a robust auditing structure, building on existing certification processes where possible, minimising additional administrative effort and cost for economic operators."

The Proof of Compliance (PoC) Framework

• Optional and Standardized: The PoC framework is an optional tool for ISCC System Users, providing a standardized document for forwarding evidence when PoS is unavailable.

• "The “Proof of Compliance (PoC)” framework provides this optionally available standardised framework for ISCC System Users..."

• Mirrors PoS but Distinct: The PoC document contains similar information to a PoS regarding sustainability criteria and GHG emissions savings but clearly distinguishes itself from the original PoS.

• "A standardised document that, like the PoS, provides evidence regarding the compliance of a fuel batch with a defined set of sustainability criteria and GHG emissions savings (e.g., as per EU RED II), while clearly distinguishing the status of the PoC document from that of the original, underlying PoS document."

• Issuance Conditions: Issuance of a PoC is only permitted under specific conditions:

• The original PoS has been surrendered to relevant authorities or formally marked for submission within internal management systems with a clear audit trail and no further use intended.

• "The original, underlying PoS document for that batch of fuel has been surrendered to relevant competent authorities (for the applicable claim being made) or has been clearly and formally marked for submission within internal management systems, and submission requirements occur within the defined timelines as laid out in this document and as required by applicable legislative authorities."

• The relevant competent authorities allow for a claim on the same batch of fuel (and/or GHG savings) by both the fuel supplier (via PoS) and the final user (via PoC).

• Issuance is not allowed if the original PoS is still available, if such a claim is prohibited by authorities, or if digital systems already track the claim for the same purpose.

• Issuance Timeline: Generally, the PoC should be generated no later than 30 days after the PoS document has been surrendered. In cases where PoS submission timelines vary, PoC generation can occur before PoS submission, but strict internal controls and audit trails are required.

• Forwarding Process: The process of issuing and forwarding PoC documents mirrors that of PoS documents, following applicable mass balancing rules.

• Data Requirements: The PoC document must contain specific information, including:

• Unique ID and issuance date of the PoC.

• Reference to the original, underlying PoS document(s) (unique ID(s) and submission date).

• Information on the fuel supplier compliance/incentive scheme under which the original PoS was surrendered (e.g., EU RED II, UK RTFO).

• Quantity of certified product from the original PoS.

• Certification system (e.g., ISCC EU).

• Details of the supplier and recipient of the PoC.

• Contract number and dispatch/receipt points.

• ISCC certificate number of the supplier.

• General product information (type, feedstock, origin, quantity, energy content, density, chain of custody).

• Information on the scope of certification of the raw material/feedstock (e.g., RED II compliance statements).

• Information on GHG life cycle emissions.

• Implementation Elements: The PoC framework consists of:

1. The PoC Guidance Document (this document).

2. The ISCC PoC Excel template (optional for users, but all required data points must be included).

3. The PoC Audit Procedures (mandatory for certification bodies).

Auditing of PoC Issuance and Forwarding

• Robust Auditing Framework: A robust auditing framework is essential to ensure the integrity of PoC documentation and related claims.

• Certification Requirement for Handlers: Every economic operator involved in issuing, receiving, and/or forwarding PoC documents must be individually audited and certified under the relevant ISCC scheme (e.g., ISCC EU) and must apply for the ISCC PoC add-on to their certification scope.

• Audit Focus: Audits will verify that PoCs are only issued for fuel batches where the original PoS has been surrendered or marked for surrender correctly, that PoCs clearly reference the underlying PoS and its submission purpose, and that issuance and forwarding follow ISCC rules and mass balance principles.

• No Certification for Final Users (Receivers Only): Final users who only receive PoC documents (like aircraft operators and shipping companies) do not need to be ISCC certified for handling PoCs. However, their suppliers must be certified to ensure proper PoC issuance. The emissions reports and claims of final users will be audited by verification bodies under the relevant regulatory frameworks.

Important Considerations

• Acceptance by Competent Authorities: ISCC explicitly states that it cannot guarantee the acceptance of PoC documents under specific regulatory frameworks. Economic operators are strongly advised to contact the relevant authorities to confirm PoC acceptance.

• "It is important to note that ISCC is not in the position to guarantee the acceptance of PoC documents under specific regulatory frameworks – this remains under the jurisdiction of applicable competent authorities. It is therefore highly recommended that economic operators contact the respective authorities to confirm acceptance of PoC documents."

• Voluntary Markets: The guidance does not cover the implications of using PoC documents for claims in voluntary (non-regulated) markets, recommending careful examination of potential double counting issues.

3. Implications and Next Steps

The introduction of the ISCC PoC framework is a significant development that aims to facilitate the recognition of certified sustainable fuel use by final consumers in sectors like aviation and maritime, particularly under regulations like the EU ETS and FuelEU Maritime.

For economic operators, the key takeaways are:

• The PoC framework offers a solution to the PoS unavailability challenge, potentially enabling downstream users to claim emissions reductions.

• Adherence to strict issuance and forwarding rules is crucial.

• Certification (including the PoC add-on) is required for all entities issuing, forwarding, or receiving (and potentially altering) PoC documents within the supply chain.

• Proactive communication with relevant competent authorities is essential to confirm the acceptance of PoC documents for specific compliance purposes.

This briefing document provides a high-level overview. Economic operators intending to utilize the PoC framework should thoroughly review the complete "ISCC Proof of Compliance Guidance Document V1.0" and any subsequent updates. They should also engage with their certification bodies to understand the specific audit requirements and implementation processes.

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