SUSTAINABILITY

The Highland FR Sustainability Commitment

Highland FR’s commitment to sustainability is at the core of who we are. Our pledge to operate in a transparent, ethical manner is essential to how we conduct business with our customers, our partners, and our stakeholders. Our commitment extends beyond current U.S. standards to the stringent European standards provided by the Sustainable Biomass Program, the Renewable Energy Directive and the Deforestation Regulations.

Highland FR Sustainable Forestry Policy

Highland FR is committed to continually achieve certification to the Sustainable Biomass Program (SBP), Sustainable Forestry Initiative® (SFI) Fiber Sourcing Standard, Forest Stewardship Council® (FSC®) and Programme for the Endorsement of Forest Certification (PEFC) Chain of Custody and Controlled Wood Standards, as well as comply with applicable environmental, social, and health and safety laws and regulations.

Highland FR supports strong labor laws and commits to observe and give effect to the below:
  • The organization shall not use child labor.
  • The organization shall not employ workers below the age of 15, or below the minimum age as stated under national, or local laws or regulations, whichever age is higher, except as specified in the following: In countries where the national law or regulations permit the employment of persons between the ages of 13-to-15 years in light work, such employment should not interfere with schooling nor, be harmful to their health or development. Notably, where children are subject to compulsory education laws, they shall work only outside of school hours during normal daytime working hours.
  • No person under the age of 18 is employed in hazardous or heavy work except for the purpose of training within approved national laws and regulations.
  • The organization shall prohibit the worst forms of child labor.
  • The organization shall eliminate all forms of forced and compulsory labor.
  • Employment relationships are voluntary and based on mutual consent, without the threat of a penalty.
  • There is no evidence of any practice’s indicative of forced or compulsory labor, including, but not limited to, the following:
    • physical and sexual violence
    • bonded labor
    • withholding of wages /including payment of employment fees and or payment of deposit to commence employment
    • restriction of mobility/movement
    • retention of passport and identity documents
    • threats of denunciation to the authorities
  • The organization shall ensure that there is no discrimination in employment and occupation.
  • Employment and occupation practices are non-discriminatory.
  • The organization shall respect freedom of association and the effective right to collective bargaining.
  • Workers are able to establish or join worker organizations of their own choosing.
  • The organization respects the full freedom of workers’ organizations to draw up their constitutions and rules.
  • The organization respects the rights of workers to engage in lawful activities related to forming, joining or assisting a workers’ organization, or to refrain from doing the same, and will not discriminate or punish workers for exercising these rights.
  • The organization negotiates with lawfully established workers’ organizations and/or duly selected representatives in good faith and with the best efforts to reach a collective bargaining agreement.
  • Collective bargaining agreements are implemented where they exist.
  • Indigenous Peoples’ rights, workers’ and communities’ right to know, and use of prevailing wages are respected.

Highland FR’s commitment to sustainability is at the core of our foundation. Our pledge to operate in a transparent, ethical manner is essential to how we conduct business with our customers, our partners and with our own stakeholders. That commitment extends beyond the current U.S. standards, as we will also be in complete compliance with stringent European standards provided by the Sustainable Biomass Program (SBP)[1]. We are in the business of delivering sustainable fuel products. And that business can only be achieved by making sustainability a key principle to our company.

Highland FR promotes the practice of sustainable forest management including:
  • Sustainable Forestry
  • Forest Productivity and Health
  • Protection of Water Resources
  • Protection of Biological Diversity
  • Aesthetics and Recreation
  • Protection of Special Sites
  • Legal Compliance
  • Research
  • Training and Education
  • Community Involvement and Social Responsibility, and respect for Indigenous Rights
  • Transparency
  • Continued Improvement
  • Responsible Fiber Sourcing

In production, our commitment to sustainability extends to minimizing our energy use in both our pellet production and transport logistics. To the extent commercially practicable, we use all the waste bark from our roundwood deliveries as fuel for our drying process in order to reduce our greenhouse gas emissions. Our pellets are transported to port by rail rather than road to minimize our transport emissions. Each Highland FR pellet site undertakes a detailed independent sustainability audit each year to ensure that fiber supply is sourced and used to the high sustainability regulations required by customers.

Summary:

Highland FR wood pellet business is environmentally friendly and sustainable in several ways:

  • Wood pellets directly replace coal burned in European power stations, reducing the emission of GHG emissions by over 80%.
  • Contributes to protecting the commercial viability of the forestry sector, thereby helping forests to remain as forest rather than be converted to alternative land uses.
  • Our wood pellets are sourced from waste material from mills. Our fiber demand creates an additional local market which helps the livelihood of local rural communities.

Highland FR is committed to sourcing wood and residual fiber from renewable, legal, and sustainable sources and to promote the principles of sustainable development and use of renewable resources.  It also strives to broaden the practice of sustainable forestry and improve the professionalism of forest workers and the forestry community.

Highland FR has set an overall goal of increasing the use of renewable wood energy, reducing wood waste and decreasing greenhouse gas emissions. The use of woody biomass as a replacement for fossil fuels is a proven way to improve forest utilization, facilitate regeneration of the forest, reduce the risk of wildfire, reduce carbon emissions, and improve the international trade in forest-based products. It will also provide a market incentive for landowners to keep their lands in forest cover.

To help implement and achieve the above sustainability, renewability, and greenhouse gas reduction objectives, Highland FR has developed and adopted appropriate programs and documented procedures to guide its wood and fiber procurement, sustainable forestry practices, and certification claims.

Highland FR is committed to annually review the effectiveness of our Sustainable Forestry Policy, chain of custody and responsible fiber sourcing programs to continually improve our wood procurement systems and to ensure legal and regulatory compliance.

Notes:
[1] https://sbp-cert.org/

[2] Source: Highland FR data using Ofgem UK Solid and gaseous Biomass Carbon Calculator, Model Version 2.0 (Build 36, released 2nd October 2015)

[3] Source: Ecostrat study undertaken on behalf of Highland FR, May 2023.

A Market for Unwanted Biomass Helps Keep Forests Healthy 

Highland FR’s commitment to sustainability also extends to minimizing our energy use in both our production processes and transport logistics. All our pellet material is dried using waste wood rather than natural gas. Each plant undertakes a detailed independent sustainability audit every year to ensure our fiber supply is sourced and used to the high sustainability regulations required by our customers and government regulators.

Highland FR is part of a broader sustainable forestry sector with a track record of encouraging best forest management practices among U.S. landowners that have a positive impact on forests. According to data from the U.S. Forest Service Forest Inventory and Analysis (FIA) Program, U.S. forests have increased over the last 100 years, and forest carbon stocks have doubled since the 1950s. These gains happened despite a tripling of the U.S. population, record commercial and urban development, and devastating forest fires.

No, biomass is part of a closed cycle involving the atmosphere and biosphere. Trees take carbon from the atmosphere when they are growing and release it again when they decay in the forest or are burned. This is known as the carbon cycle and is shown in the diagram below. In contrast, when fossil fuels are burned, carbon is released that has been stored for millions of years, which increases the amount of carbon in the atmosphere. This carbon would have continued to have been stored if it was not burned. Instead, the burning of fossil fuels adds to a net increase in the amount of carbon in the cycle, which adversely contributes to the greenhouse effect.

Biomass-fueled power stations are available to be ramped up or down when needed by the power system operator. Biomass is therefore an alternative to dispatchable fossil fueled energy, which intermittent wind and solar are unable to replace. (Dispatchable power sources can be adjusted on demand by grid operators to match supply with electricity demand.) In the last few years, many European countries have significantly changed their energy mix away from fossil fuels to include a much greater proportion of renewable energy. The prior high dependence on coal has largely been replaced by a combination of solar and wind, while natural gas remains an important dispatchable source of power for balancing the networks.

However, with most European countries now committed towards a net-zero carbon economy by 2050, natural gas remains part of the emissions problem until carbon capture storage (CCS) technology becomes commercially available and enables natural gas to become carbon neutral. Applying CCS to biomass (biomass energy carbon capture storage or BECCS) would move biomass energy from carbon neutral (existing carbon cycle) to carbon negative (most emissions captured and used in other production of goods or stored underground). BECCS technology is being developed by several utilities internationally and is expected to be commercially available within the next five years.

Biomass is therefore important today as a carbon neutral form of dispatchable energy that is cleaner than natural gas and more controllable than alternative forms of renewable energy. In the future, BECCS will be essential for countries hoping to achieve a carbon-neutral power sector by 2030 or if it is to meet its legally binding net-zero carbon targets by 2050.

The economies of scale are a big advantage as we are able to ship our biomass in vessels with a capacity of 27,000 tonnes. Highland FR measures the carbon footprint of every step in the supply chain, so we know exactly how much carbon is emitted during harvest, processing, and transport. Even when this entire life cycle is taken into account, savings relative to coal are over 80%. Wind power cannot be relied upon to respond to changes in demand when needed. Other renewables are important, but on their own they cannot meet our electricity needs.

Although wood is one of the oldest sources of energy, modern technology now enables it to be processed into densified pellets that can be efficiently transported to power stations overseas. Even after allowing for the energy spent in collecting the wood, processing it into pellets and transporting the pellets by ship to Europe, the amount of greenhouse gas (GHG) released from burning the pellets is over 80% less than if the power station in Europe burned coal. Highland FR uses carbon calculators approved by the European Commission’s REDII protocols to monitor its greenhouse gas emissions. This allows Highland FR to monitor its emissions and look to make continuous improvements where possible.

Forest owners typically supply a range of markets including sawmilling, panel board, pulp and paper, energy and heat; therefore, wood for energy is just one use among many. The forest owners will sell the best wood to the highest-value markets, such as sawlogs. Large-diameter logs from the trees’ lower trunks are usually the most valuable part of a tree. It is typically sawn and used in construction, joinery and furniture-making.

Biomass often uses leftover fiber that is low value, because it has no alternative market. It is often the case that a new pellet facility will be located in an area where there was once a paper factory but has since closed due to the dramatic decline in the demand for paper in recent years due to advances in technology. Pellet facilities therefore help to replace old industries and provide new value streams for forests, enabling them to remain commercially viable and preserve local employment.

Wood pellets make up a very small amount of the overall wood products industry. Wood pellet production made less than 4% of total production of U.S. forest products 2022. Wood pellets therefore do not have a strong impact on the furniture and construction industries because they are much larger markets and use higher quality saw logs rather than low-quality fiber for pellet production.

Yes, Highland FR is independently audited against stringent sustainability standards covering a range of issues including protection of biodiversity and conversion of forestland to other uses. Highland FR puts feet on the ground to have firsthand knowledge that any material coming to Highland FR follows state-level forest best management practices. At the federal level in the U.S., forestry is regulated nationally by the Clean Water Act, Clean Air Act, Endangered Species Act, Migratory Bird Treaty Act, Coastal Zone Management Act, and the Lacey Act, and internationally by several more regulations, including the European Union Deforestation Regulation (EUDR). At the state level, it is regulated by a range of water quality management regimes, established industry best practices, wetlands protections, and zoning and landscaping ordinances.

Certifications

Forest certification programs ensure that raw materials for Highland FR products are sourced from forests that prioritize forest health, biodiversity conservation, soil protection, and climate-smart forestry.

SFI

SFI® is a sustainability leader through its work in standards, conservation, community, and education. Organizations certified to SFI standards conserve wildlife and water, practice climate-smart forestry, and support relationship-building with Indigenous Peoples.

SBP

SBP is a certification system designed for woody biomass used in industrial, large-scale energy production. It provides assurance that woody biomass is sourced legally and sustainably. SBP includes a rigorous risk assessment to ensure that the wood is sourced from environmentally, economically, and socially sound practices.

PEFC is an umbrella organization that endorses forest certification systems that have been developed through multi-stakeholder processes and tailored to local priorities and conditions. PEFC endorses SFI.

Community Engagement

Highland FR recognizes that building relationships with local communities involves being a responsible corporate citizen, contributing positively to community development initiatives, and addressing any concerns or grievances that may arise. We engage with community stakeholders to foster goodwill, support rural economies, and encourage people to see Highland FR as an employer of choice.

Sustaining Rural Economies

Highland FR contributes to rural economic development by creating stable, well-paying jobs within the forestry and manufacturing sectors. Investments in timber harvesting, processing, and associated industries that supply sustainable wood pellet feedstocks can generate substantial income and employment opportunities for local communities. Sustainable forestry practices also stimulate ecotourism activities such as hiking, mountain biking, hunting, birding, and fishing —attracting visitors and invigorating local businesses.

Resources

Forest of Exceptional Conservation Value (FECV) In Highland’s Supply Region