News and Analysis • Volume 2 • Number 2 • May 2008

Biofuels and sustainability: Is certification the answer?

Do More

See also

Biofuels mandates and targets have come increasingly under fire from both development and environment groups, which say they have unintended consequences, driving up global food prices, encouraging conversion of forested land to monocultures, and leading to the exploitation of labourers in developing countries. One way to place some checks and balances on biofuels production is by using sustainability certification schemes. BioRes has talked to two biofuels experts to get their opinions on the topic.

Background

There are a number of national and international efforts to develop biofuel sustainability criteria. The global Roundtable on Sustainable Biofuels, which brings together stakeholders to develop a consensus on principles and criteria to achieve sustainable biofuels, is one such effort. The Roundtable has proposed the following environmental and social justice principles: the use of biofuels should reduce greenhouse gas emissions; production should not endanger wildlife, areas of high conservation value or the environment; production should not violate human rights or labour rights; production should not impair food security; and production should not violate land or water rights and should contribute to the development of local, rural and indigenous communities. The Roundtable’s principles provide insight into what the world is demanding from governments as they consider laws increasing the use of biofuels. The EU is targeting a ten percent biofuel blend in transport fuels by 2020. The US has enacted the Energy Policy Act of 2007, which calls for 36 billion gallons of biofuel to be used in vehicle fuel by 2022. The European Commission, the US, and the Sustainable Production of Biomass Project Group (Project Group), a project commissioned by the Dutch government, are among entities involved in trying to operationalise some form of biofuels criteria. The following paragraphs look at some of the potential criteria.

Greenhouse Gas Emission Savings: The Commission’s proposal requires an emissions saving of at least 35 percent. The US requires renewable fuels to achieve at least a 20 percent reduction, advanced biofuels and biomass-based diesel at least a 50 percent reduction, and cellulosic biofuels at least a 60 percent reduction. The Project Group would require a 30 percent reduction, increasing to 80 or 90 percent within the next decade as new technology is developed and agricultural production is improved.

Conservation, Biodiversity and Environmental Protection: The Commission would prohibit the use of raw materials cultivated from land with high biodiversity or high carbon stock. Domestically produced raw materials would be required to comply with EU environmental requirements for good agricultural practices as well. Member states have the option of considering other grounds of sustainability. The US requires the Administrator of the Environmental Protection Agency to consider environmental impacts when setting future volume levels (e.g. beyond 2022). The Project Group would require production facilities to comply with national and local environmental regulations and apply good practices to strengthen biodiversity and best practices to protect soil, water and air resources.

Human and Labour Rights, Land and Water Rights: The Project Group would require production to contribute to the well-being of employees and the local population through compliance with international principles. Furthermore, there should be no negative effects on working conditions or human rights, and property rights should not be violated.

Food Security: Impacts of biofuel production and use on food security is complex, which may explain why the impacts in the Commission’s Proposal, US law and the Project Group’s framework is considered during the programme review process. The Commission’s proposal requires it to monitor commodity price changes and their effects on food security and propose corrective action if necessary. Under US law, the EPA Administrator is to conduct an analysis of the impacts of the production and use of renewable fuels on the price and supply of agricultural commodities and food prices and, the National Academy of Sciences is to conduct an impact study on industries related to the production of agriculture industries, and to develop policy options to alleviate adverse impacts on agricultural feedstocks and capabilities. The Project Group would require information to be collected concerning land use and food price changes in the production region.

Socio-economic Development: Like food security, the affects on socio-economic development are complex and depend on a number of factors. The Commission is to report on the availability of foodstuffs in exporting countries, the ability of developing countries to afford foodstuffs and broader development issues, and to propose corrective action. Under US law, when the Administrator sets volume levels for future calendar years, he or she is to conduct an analysis of the impacts of the production and use of renewable fuels on job creation and rural economic development. The Project Group would require a positive contribution to the local economy.

Interview with Adrian Bebb, Agrofuels Campaign Coordinator for Friends of the Earth Europe

BioRes: What are the main pros and cons of biofuel sustainability schemes?

AB: Research by Friends of the Earth shows that the only way to make production sustainable is by controlling the level of demand to sustainable levels. None of the sustainability schemes that we have investigated address this issue, therefore undermining their credibility and adding weight to accusations that they are simply green-wash schemes for big business. A good example is the Roundtable on Responsible Soy, which is dominated by companies that have a substantial control of the international soy trade but have no interest in reducing soy production to more sustainable levels. A second major criticism is the inability of certification schemes to solve indirect issues such as rising commodity prices or displacement. Expanding crops to meet new demand replaces previous uses of that land, whether it was nature, pastoral or agricultural land. The latter is often displaced elsewhere and is one of the major concerns in relation to the production of agrofuels (or any other major expansion of a commodity crop). The new plantation could be certified as “sustainable” but if it has simply pushed other farming activities into sensitive areas then this makes a mockery of any certification scheme. This is a major failing that is unlikely to ever be solved by certification schemes. Friends of the Earth is therefore concerned that the public will be sold products under the impression that that they are “sustainable” or “responsible” when the opposite is true.

BioRes: How would such schemes affect the balance between homegrown and imported biofuels and biofuel feedstocks?

AB: The European Union scheme currently under development sets the greenhouse gas savings particularly low (35 percent) in order to allow EU-grown crops to qualify. A higher saving would be better for the climate but would rule out most EU crops, which have a generally low energy balance.

BioRes: In your opinion, are national biofuel sustainability requirements compatible with WTO obligations? If not, are there any alternative ways to ensure the sustainable production of biofuels that would comply with WTO obligations?

AB: FOE has not investigated the WTO compatibility of the UK scheme (the only national scheme currently in force). What is clear though is that most countries, and the European Commission in particular, appear to be running scared of the WTO and intend to only implement weak sustainability criteria (especially in relation to social aspects) as a result. There is a tendency to depend more on voluntary schemes with mandatory reporting – an approach that FOE considers weak and unacceptable.

BioRes: In your opinion, will large-scale production and use of biofuels become a reality? What part would trade play under such a scenario?

AB: Large-scale production is already happening whether we like it or not, with major expansions planned largely in the South to meet, at least, the European market. However, the increasing attention to the global food crisis and the role agrofuels have in exacerbating the situation has led governments and the European Commission to review their policies. There won’t be enough agricultural land (or water!) available to produce feeds, fuels and foods for a growing population, especially if climate predictions come true. Some hard choices will have to be made and it is unlikely that agrofuels will come out favourably Some level of biofuel production will be available, especially from waste products such as used vegetable oil, but what level that will be at is highly questionable – certainly below the proposed 10 percent target.

BioRes spoke to Marcelo M. R Moreira, Researcher at ICONE, the Institute for International Trade Negotiations in São Paulo, Brazil.

BioRes: What are the main pros and cons of biofuel sustainability schemes?

MM: When ethanol was first implemented in Brazil (in the 1970s), the main objective was to guarantee a national fuel supply, so sustainability schemes where mainly designed to control gas and liquid emissions. Broader sustainability issues are of greater concern nowadays and sustainability stamps are being studied by two Brazilian government agencies and by the private sector. Nevertheless, identifying criteria that ensure environmental benefits is not an easy task, especially with respect to traceability systems. Biodiesel is required to carry a ‘green stamp’ with environmental and social standards (specifying region of origin and family-farm production) in order to be sold in the public fuel distribution market in Brazil. Critics point out the inviability of reducing greenhouse gas emissions through biodiesel usage without achieving largescale production, which is very difficult through small-scale family farm sourcing.

BioRes: How would such schemes affect the balance between homegrown and imported biofuels and biofuel feedstocks?

MM: Brazil has a long experience in biofuel production and consumption, without needing to import these. Concerning ethanol, the country has developed world leading technology in terms of costs, but also in sustainability aspects such as yields per hectare, energy balance and greenhouse gas reductions. So, if sustainable production were treated as it ought to be (i.e. not as an excuse to raise trade barriers), Brazilian exports would benefit. As for biodiesel, large scale consumption might imply some adjustments on seal requirements.

BioRes: In your opinion, are national biofuel sustainability requirements compatible with WTO obligations? If not, are there any alternative ways to ensure the sustainable production of biofuels that would comply with WTO obligations?

MM: Brazil is itself able to supply its domestic demand for biofuels, and there is almost no import demand. Brazilis engaged in discussions regarding sustainability criteria for ethanol production, focusing on environmental and social aspects. WTO compliance is a question that needs to be addressed carefully. The sustainability requirements imposed by importing countries may be a concern, and their requirements could be challenged against WTO compliance. I can name at least eight different initiatives seeking to define sustainability aspects of biofuels today, and it is not easy to foresee what set of criteria importer will recognise and implement. If the US, the EU and other countries are really interested in sustainability, one can say that Brazil is doing a good job. The key question is: will the sustainability requirements really be needed to achieve sustainability goals, or will they just amount to barriers to trade? The harmonisation between different certification schemes is another tough issue to address since there are plenty of initiativesand a “certification market” is emerging.

BioRes: In your opinion, will large-scale production and use of biofuels become a reality? Can biofuels be a reliable and sustainable fuel source used by all countries? What part would trade play under such a scenario?

MM: From a Brazilian perspective, biofuels are a permanent part of the national energy matrix, which can also create a global biofuel market, assuming key producers become engaged. It is known that in the case of sugarcane-based ethanol, the countries that offer the best conditions are developing and least developing countries, mainly in Latin America, the Caribbean and Africa. Since developed countries are the major oil consumers and have severe area constraints, international trade assumes a very important role. It would allow the best production patterns and, at the same time, provide incentives for technological and infrastructure development, as well as income generation, in the poorest countries. Significant trade flows, with diversified production through biofuels commoditisation, would generate conditions for establishing reliable supply.