The Integrated Administration and Control System: guidance

Annex 1: Energy Crop Scheme ( ECS)

1. Outline of the scheme

We will pay aid for areas sown under energy crops which are being grown for the production of energy products which meet the scheme conditions. For 2008, we will pay a flat rate of aid of €45 per hectare, for areas sown under energy crops. The payment is subject to a ceiling of 2 million hectares throughout the EU. If this ceiling is exceeded, the payment of €45 per hectare will be reduced. We aim to pay this between 1 December 2008 and 30 June 2009.

If you grow energy crops, we will only pay aid on areas where production is covered by either a contract between you and a processor, or a declaration by you that you are processing the crop on your holding, for use on your holding. You need to send us a copy of the contract or your declaration with your SAF. We can pay you the SFPS payment and the energy crop payment on eligible land if you declare the eligible crop code for SFPS in columns I and J of your Field Data Sheet. If you enter the eligible crop code in the 'Other Land' columns of your Field Data Sheet (columns K and L), we will pay you the Energy Crop Scheme payment only.

2. Eligibility

Land

You can claim aid for energy crops on any land declared on your SAF other than set-aside land, whether eligible for SFPS or not.

Raw materials

Energy crops are crops supplied essentially for the production of the following energy products:

• Those considered bio-fuels as listed in EC Directive 2003/30/ EC - Article 2 Point 2 (see below);
• Electric and thermal energy produced from bio-mass.

List of acceptable biofuels and energy products

• bioethanol: ethanol produced from biomass and/or the biodegradable fraction of waste, to be used as biofuel;
• biodiesel: a methyl-ester produced from vegetable or animal oil, of diesel quality, to be used as biofuel;
• biogas: a fuel gas produced from biomass and/or from the biodegradable fraction of waste, that can be purified to natural gas quality, to be used as biofuel, or woodgas;
• biomethanol: methanol produced from biomass, to be used as biofuel;
• biodimethylether: dimethylether produced from biomass, to be used as biofuel;
• bio- ETBE (ethyl-tertio-butyl-ether): ETBE produced on the basis of bioethanol. The percentage by volume of bio- ETBE that is calculated as biofuel is 47%;
• bio- MTBE (methyl-tertio-butyl-ether): a fuel produced on the biomass of biomethanol. The percentage by volume of bio- MTBE that is calculated as biofuel is 36%;
• synthetic biofuels: synthetic hydrocarbons or mixtures of synthetic hydrocarbons, which have been produced from biomass;
• biohydrogen: hydrogen produced from biomass, and/or from the biodegradable fraction of waste, to be used as biofuel; and
• pure vegetable oil: oil produced from oil plants through pressing, extraction or comparable procedures, crude or refined but chemically unmodified, when compatible with the types of engines involved and the corresponding emission requirements.

3. Selling to a collector or first processor

If you are selling to a collector or first processor, production must be covered by a signed and dated contract between you and the collector or first processor. A separate contract must be agreed and submitted for each raw material. You must deliver all raw materials harvested to the collector or first processor.

Contract

Your contract with the collector or first processor, in support of your application for aid, must be lodged by the collector or first processor with the Rural Payments Agency ( RPA) in Exeter by 15 May 2008. For biennial, multiannual or permanent crops (where harvesting does not take place each year), you do not need a new contract each year.You must send us a copy with your SAF.

Your contract must specify:

• the names and addresses of the parties to the contract, including the grower's main location code and Business Reference Number ( BRN);
• the duration of the contract. The dates of sowing/planting, harvesting, delivery of raw material from the holding and the date for final processing. For perennial crops a new contract should be submitted in respect of each harvest;
• the species of crop used to provide the raw material and the area planted with each species in hectares to two decimal places;
• any conditions applicable to the delivery of the forecast quantities of raw materials;
• an undertaking from you and the collector or first processor to fulfil the obligations in relation to equivalence (ie use of equivalent quantity of raw material within the EU Community); and
• the intended primary end uses for the raw material.

Amendment and termination

Contracting parties may amend or terminate a contract after it is submitted provided that they send the original of the amended or terminated contract to the RPA (and a copy to us) no later than 31 May 2008.

4. Processing on your Holding

If you undertake processing on your holding, for use on your holding. You may:

• Use short rotation forest trees covered by ex 0602 90 41 or all the cereals or the oilseeds covered by CN codes 1201 00 90, 1205 90 00 and 1206 00 91 harvested (see below):
• As fuel for heating your agricultural holding.
• For the production on the holding of power or bio-fuels.
• Process all the raw material harvested on your holding into bio-gas falling within CN code
  2711 29 00 (see below).

In these cases, you must give us a declaration that you will use or process directly the raw material for your own use.

We will apply adequate checks to ensure that the raw material is used directly on the holding or is processed into bio-gas falling within CN code 2711 29 00 for your own use.

Cereals and oilseeds used as fuel for heating your agricultural holding or for the production of power or bio-fuels for use on your holding must be denatured in accordance with the method laid down by SGRPID. We may, however, authorise the oil produced by processing oilseeds for the production on your holding of power or bio-fuels for use on your holding to be denatured instead of the oilseeds themselves, provided that such denaturing takes place immediately after the seeds are processed into oil and that the use to which the seeds are put is checked.

CN codes

• 1201 00 90 Soya beans other than for sowing.
• 1205 00 90 Rape or colza seeds other than for sowing (only those types referred to in Articles 4(1) and 4(2)(a), (b) and (e) of Commission Regulation ( EC) No 2316/1999 i.e. certified seed of double-zero (00) varieties of colza and rape seed notified and entered as such in the Common Catalogue.
• 1206 00 91Sunflower seeds other than for sowing.
• 2711 29 00 Petroleum gases and other gaseous hydrocarbons in gaseous state, other than natural gas.

Declarations

If you are processing on your holding production must be covered by a declaration. For biennial, multiannual or permanent crops (where harvesting does not take place each year), we will not need a new declaration each year. Your declaration should cover the period up to and including the processing of the crop at the next harvest. You must send us your declaration with your SAF.

Your declaration must specify:

• that you will use or directly process the raw material grown;
• the duration of the declaration and the dates of sowing or planting, harvesting, and final processing;
• the species of crop used to provide the raw material concerned, and the area planted with each species in hectares (to two decimal places);
• any conditions applicable to the production of the forecasted quantities of raw materials; and
• the intended primary end use(s) for the raw material.

Measurement and accounts

• You must have all the raw material harvested weighed by an operator of a weighbridge approved by the local authority. In the case of cereals and oilseeds, where either the entire plant or the straw is used, weighing may be replaced by volumetric measurement of the raw material.
• You must keep separate accounts for the raw material used and the products and by-products resulting from its processing.

5. Representative yields

Each year before the harvest, we will establish and advise you of the representative yields which will have to be attained.

Quantities delivered

You must declare the total quantity of raw materials harvested by variety to us and must confirm the quantities of raw materials delivered and the parties to whom such deliveries are made. The actual quantities to be delivered by you must at least correspond to the representative yield. In duly justified cases, we may, by way of exception, allow a shortfall of up to 10% in the yield.

Where the amendment or termination of a contract has been authorised the quantities you are required to deliver will be reduced.

Exceptional circumstances

Where you inform us that, owing to exceptional circumstances, you will not be able to supply all or part of the raw materials specified in the contract or declaration, we may, after obtaining sufficient evidence of such special circumstances, authorise such amendments to contracts or declarations as appear justified, or may authorise their termination.

Where the land covered by contracts is reduced as a result of an amendment, or where a contract is terminated, you will lose the right to aid in respect of areas struck out of the contracts.

6. Payment

Payment of aid may be made to you once the raw material has been delivered to the collector or first processor and where:

• the declaration of total quantity of raw materials has been made;
• a copy of the contract has been deposited with the RPA;
• the RPA has received proof that the full security has been lodged; and
• each contract meets the conditions detailed in section 3.

For biennial crops, aid can be claimed in each of the two years following the date of the making of the contract, if the conditions above are met from the first year of cultivation (in the second year of cultivation payment can be made without lodgement of security). And the raw material is delivered and declared (see section 5) in the year in which the crop is harvested.

For permanent and multiannual crops, aid can be claimed in each year of cultivation if the conditions above are met from the first year of cultivation and the raw material is delivered and declared (see section 5) in each year in which the crop is harvested.