ISCC Certification for Grain Trading: What It Is, Why You Need It, and How to Pass the Audit

ISCC (International Sustainability and Carbon Certification) is an international certification system for sustainability and carbon footprint across biomass, biofuel, and related product supply chains. For the grain market, this means something very practical: it's not just about "what grain we sell" but about "how it was grown, harvested, stored, transported, and documented in accordance with sustainability requirements."

Ukrainian market data from 2023 clearly shows how ISCC has become an everyday condition for trading with EU processors. The reason is simple: European biofuel supply chains operate under RED requirements, and without sustainability confirmation, a trader or farmer loses access to a significant portion of buyers. That's why ISCC documentation requirements are increasingly appearing in procurement terms.

For businesses, it's important not to confuse company certification with "grain batch certification." Under the ISCC system, auditors assess processes, controls, and supply chain traceability — not just the final product. If the process is unmanaged, the mere existence of a shipment doesn't create trust for the European buyer.

In practice, ISCC certification provides two key commercial advantages: access to a broader pool of buyers and better pricing in segments where a sustainable supply chain is a mandatory contract condition. For grain trading, this is particularly noticeable when dealing with rapeseed and corn for the biofuel sector.

The EU buyer pays not "for a piece of paper" but for managed verifiability: they receive confirmation that the supply chain meets sustainability requirements and that carbon parameters have been calculated using accepted methodologies. Without this, a supplier may technically have the product but lack access to a specific sales channel.

In Ekontrol's projects, we consistently observe a pattern: the more consistently a company maintains its document flow and traceability, the fewer discounts arise during negotiations and the smoother counterparty audits go. In other words, ISCC works not only as a "door to the market" but also as a tool for maintaining margins.

The ISCC system is structured as a chain, meaning certification applies not to a single participant but to the entire sequence: farmers, first gathering points, elevators, traders, warehouses, exporters, and processors. If one link is missing, there is a risk of a traceability gap, which immediately impacts the ability to sell the product as sustainable.

For the Ukrainian market, this means it's not enough for a trader to simply "have their own certificate." They need suppliers who can confirm compliance through proper documents and declarations. This is often where the biggest challenges arise: the raw material exists, but the documentary chain is not connected.

That's why ISCC preparation is always a team effort with partners. The earlier a company establishes rules of engagement with farmers and elevators, the lower the risk of disrupted shipments during peak season.

One of the most practical decisions at the outset is determining which status your company will hold within the ISCC system. The most common options for grain trading are: FGP (First Gathering Point), Trader, and Trader with storage.

FGP is the first point of collection for sustainable biomass, where the company works closer to the farming base and takes on greater responsibility for the primary integration of data into the chain. Trader is a trading model where the critical factor is document control and procurement from certified counterparties. Trader with storage adds requirements for storage processes, mass segregation, and traceability at the warehouse or elevator level.

In practice, choosing the wrong status is costly: a company either overburdens itself with unnecessary requirements or fails to cover its actual operational model. That's why before starting certification, at Ekontrol we recommend a brief process audit with modeling of the actual grain route.

To avoid mistakes from the start, it's useful to match your status with your actual procurement and logistics model.

An ISCC certification audit typically includes document review, an on-site visit, and a sample-based supply chain verification. Auditors check whether there is confirmed compliance with sustainability requirements, whether records are maintained correctly, and whether the origin and movement of mass can be traced within the declared model.

In publicly documented cases from Ukrainian companies, the process took approximately two weeks from the active preparation phase to the audit itself. However, the timeline depends heavily on the readiness of internal processes. If documents and staff training aren't prepared in advance, the process can drag on and affect the commercial schedule.

An important nuance: the certificate requires annual confirmation through an audit. Therefore, ISCC is not a one-time project but an ongoing system. A company that treats certification as a "one-off deadline" almost always encounters problems during the next audit cycle.

Before the ISCC audit, it's advisable to conduct a brief internal check:

• whether the documentation package is complete for sample batches;
• whether the mass balance reconciles for the control period;
• whether the team can explain their actions at risk points.

For the farming segment, the most challenging part is often the self-declaration and supporting documentation for the technical card. In practice, it's not just about filling out a form — the data needs to be backed by invoices, logs, resource records, information on crop protection product usage, fuel consumption, and technological operations.

The problem is that record-keeping in many farms is fragmented: some data exists, but it's not consolidated into a unified system. This creates a compliance risk for the trader at the procurement stage. As a result, a batch may be "stuck" from a documentary standpoint, even if the goods are physically ready for shipment.

To avoid this, a simple farmer preparation standard is needed: a list of mandatory documents, a pre-submission checklist, a designated contact person for communication with the trader, and a data update calendar. In our Ekontrol projects, this particular element often delivers the greatest impact on the speed of seasonal preparation.

Once the certificate is issued, the most important part begins — consistently meeting the requirements in daily operations. The company must maintain mass balance, segregation of certified and non-certified streams, document control for every operation, and proper preparation of the sustainability declaration.

Special attention should be given to traceability between departments: procurement, warehouse, logistics, sales, and financial accounting. If data across functions is not synchronized, the risk of errors increases even when each team performs well individually.

Best practice is to conduct short, regular internal audits throughout the year rather than a single "dress rehearsal" before the audit. This approach allows deviations to be identified early and prevents critical issues from accumulating.

Companies most frequently make mistakes at three points. First — underestimating the preparation of farmer documents and self-declarations. Second — a weak link between operational accounting and certification documents. Third — the absence of ongoing control after receiving the certificate.

Another common mistake is starting certification too late, when a contract is already "on fire." In such circumstances, the team starts patching gaps instead of preparing systematically, which increases costs and the burden on staff.

This can be avoided with a simple model: an early gap analysis, clear role assignment, a supplier preparation calendar, an internal audit before the external review, and brief monthly monitoring of key indicators.

To assess ISCC effectiveness, it's worth looking not only at audit and support costs but at the full economics of the chain. Core KPIs for management: the share of deals where ISCC is a condition of access; average margin on certified shipments; number of rejections due to documentary gaps; speed of contract package preparation; trends in findings from internal and external audits.

When these indicators are tracked regularly, the company sees the real picture: where certification generates revenue and where processes "consume" potential gains. For example, a price premium may be offset by delays caused by weak document management. Or conversely, strong data discipline enables faster deal execution and increased turnover.

Ultimately, ISCC needs to be managed as a business process, not as a compliance task. Only then does the certificate start working as an asset: opening markets, building trust, and supporting stable margins in a competitive environment.

In the practical work with ISCC, the most problems arise not during the initial audit but during seasonal peaks of procurement and shipments. This is when the system is truly stress-tested: whether the document flow can handle the actual speed of operations, whether links between batches are being lost, whether the mass balance is correctly maintained, and whether gaps appear in the Sustainability Declaration.

Mass balance in the ISCC context is not simply an accounting spreadsheet. It's a proof mechanism demonstrating that the volume of "sustainable" product sold as certified matches the confirmed volume of "sustainable" purchases within a defined period and under the system's rules. For a trader, this is critical because an error in the balance can put multiple contracts at risk simultaneously.

The most common risk is delayed or incomplete primary data from suppliers during peak season. When the team is rushing to close logistics, documents are often "brought in later." As a result, the operation has already taken place, but the evidence base is incomplete. This is exactly when future audit findings are created. To prevent this, the company needs a rule: no movement of an ISCC batch without a minimum confirmation package.

The second risk is misalignment between functions. Procurement may see one product nomenclature, the warehouse — another, logistics — a third, and sales may work with an entirely different name in the contract. If reference data, codes, and statuses are not synchronized, traceability becomes fragile. On paper, the data exists, but linking it into a coherent chain is difficult. Internal audits in such cases often reveal that the error lies not with people but with the accounting architecture.

The third risk is improper handling of the Sustainability Declaration (SD). This document serves as the carrier of critical information about the sustainable status of a shipment for the counterparty. If the SD is incomplete, contains errors, or references incorrect primary data, the buyer may reject the batch as an ISCC shipment. Commercially, this means either a discount or redirecting the goods to a less profitable channel.

In Ekontrol's projects, we recommend using a three-tier SD control model for peak seasons. The first tier — automated validations in the accounting system: mandatory fields, format checks, linkage to the batch and supplier. The second tier — operational control by the shift manager or the person responsible for documentation. The third tier — selective daily review by the quality or compliance function. This model doesn't overburden the team but significantly reduces the risk of critical errors.

A separate element is managing time lags. In grain trading, there is often a gap between the physical movement, financial closing, and the certification document. If these events don't have clear SLAs in the internal regulations, a "gray zone" appears where the batch status becomes ambiguous. Best practice is to establish internal deadlines: when a system record must be created, when the mass balance is verified, when the SD is generated, and who approves the final version.

Another critical element is inventory management within the ISCC scope. During peak season, companies rarely have time for deep reconciliations, but it's precisely short, regular reconciliations that prevent error accumulation. When the balance is checked once a month or quarter, gaps become difficult to recover. When reconciliation is brief and frequent, deviations are caught immediately and corrected with minimal losses.

For management, it's useful to have a dedicated "seasonal risk dashboard" with 4–5 indicators: the percentage of batches with a complete documentation package, time from operation to SD generation, number of mass balance deviations, number of corrections after internal review, and the share of operations exceeding the internal SLA. These are simple metrics, but they provide a real picture of system stability during periods of maximum load.

In the long term, it's precisely this element — mass balance plus SD discipline — that determines whether a company can scale its ISCC operations without losing quality. If the foundation is built correctly, volume growth doesn't destroy the system. If the foundation is weak, every increase in turnover proportionally increases risks and correction costs.

Therefore, the approach to ISCC in grain trading must be process-driven. Not "close the audit" but build a mechanism that operates as reliably during peak season as it does during the off-season. Only then does certification become a managed asset rather than a source of constant operational stress.

For grain trading directed toward the EU, ISCC certification is no longer an "optional extra." In many channels, it's a basic condition for buyer access. But the main value of the system lies not only in formal admission — it disciplines the entire chain: from the farmer and elevator to the contract and shipment.

Companies that implement ISCC systematically gain more than a certificate: faster deal flow, fewer documentary risks, a stronger negotiating position, and more stable margins. That's why investing in proper preparation pays off not through a single contract but through long-term competitive advantage.

The Ekontrol team supports businesses at every stage: status selection, document preparation, audit readiness, internal control setup, and annual system recertification. As a result, you get not just "a certificate for a year" but a managed model for operating in the EU market.