Case study: ENCE Energia – ESG due diligence in practice

Due diligence is critical to ensure that systemic risks and opportunities that may manifest over a longer time-period are factored into our investment decisions. The ESG due diligence for ENCE EnergÍa, Spain’s largest owner and operator of biomass renewable generation assets, included assessing the long-term viability of the business model in light of the growing impetus to reduce Greenhouse Gas (GHG) emissions.

In addition to the main ESG risks and opportunities and the ESG maturity level of the company, a carbon footprint assessment was conducted to understand the GHG emissions associated with the utilisation of biomass residues for different end use scenarios, including combustion in power plants, biogas production and landfill. The assessment concluded that diverting biomass residues from landfill and utilising them as feedstock for power production resulted in the lowest emissions overall.

The assessment also included a comparative analysis of different types of biomass feedstock and found that the firm’s most significant biomass source – olive cake – generates the greatest emissions savings.

Comparison of Greenhouse Gas net emissions[2] for various biomass fuel types according to end use (kg CO2e per tonne of fuel)

[2] Net emissions consider carbon footprint associated with the end use, net of emissions savings resulting from side streams of end use, such as electricity, heat and digestate.