Can sustainability criteria for certification of agrofuels be effective?

Chapter
(4 pages)
May, 2008

Helena Paul

in: Policy Department Economic and Scientific Policy Sustainable Biofuel Production in Tropical and Subtropical Countries Workshop proceedings 12 June 2008, p. 19-22

Agrofuel production involves the artificial creation of a new market with the help of government incentives, targets and subsidies. These are necessary because agrofuels cannot compete without them, so they need support in order to develop. However, it is clear that these supportive measures, including the EU target, are already impacting the global South. They are contributing to land seizure, speculation and rising land prices in Africa, Asia and South America. They are also leading to the displacement of food crops and the expulsion of vital food producers from the land. Both agricultural and forest biodiversity, already under threat from climate change and industrial agriculture, are being impacted by an emerging industry that has not proven that it can meaningfully address the problems of climate-forcing emissions. Farmers from indigenous and local communities are being driven off the land into urban slums, where they cease to be food producers and add to the rising numbers of those who need to be fed. As long as targets are in place, the signal to governments and commercial interests is loud and clear: go into agrofuels for export to Europe. Standards and certification schemes are proposed as a way to address these issues. But there is a major question: when have certification systems, particularly when voluntary, worked successfully in the past, especially in the global South? In the current situation, where EU targets are already causing rapid and irreversible changes, it is hard to believe that EU certification rules, whose scope is still being argued over and which are still to be developed and applied, can really address the issues, especially on the scale that would be required. This is especially troubling in view of the fact that the usefulness of current agrofuels is under increasing question. The OECD paper “Biofuels: Is the cure worse than the disease?” notes that “enforcement and chain-of-custody control could prove to be an enormous challenge, as recent experiences with the certification of wood products have shown. ... Though theoretically possible, reliance on certification schemes to ensure the sustainable production of biofuels is not a realistic safeguard.”1

Key questions

  1. To what extent can certification schemes effectively address the problems identified?
  2. Who is involved in deciding what deserves the label ‘sustainable’?
  3. Should schemes be voluntary or mandatory?
  4. Would mandatory sustainability certification for agrofuels be tolerated under WTO trade rules?

Limits to the capacity of certification to address the issues

Large-scale production of agrofuels will have macro-level impacts, which cannot be addressed by applying a set of criteria to individual producers. In this respect, ‘displacement’ and increased food prices are key issues. Displacement means that when existing agricultural land is used to meet the new demand for agrofuels, current production will be displaced to new areas, for example forests or small scale, diverse agricultural systems. Price shifts in commodity markets influence the price of land and also correlate with land use change, eg: changing world prices for soy have been shown to correlate with Amazon deforestation.2

Major obstacles to the development of effective standards and criteria

  1. GHG balance: There is strong disagreement about these values and recent work that looks at landuse change casts serious doubt on earlier optimistic assessments of agrofuel GHG values (eg: Searchinger, Fargione studies3).
  2. Large-scale actors are better able to deal with the administrative burden related to certification than small-scale producers. In practice, the larger actors also have more power and opportunities to influence the process of setting the criteria, and a greater capacity to find and exploit loopholes in the system.
  3. Producers and traders would be able to serve the certified market and also operate in uncertified markets. This means they would benefit from the credibility of the certification, while (possibly) continuing to engage in bad practices elsewhere.
  4. The credibility of the certification depends a lot on which system is used.
    • 'track and trace' follows a product through the whole chain from beginning to end. This is very difficult to apply to commodities traded between countries and companies as these may be mixed during transport and processed with products from elsewhere.
    • 'book and claim system involves tradable certificates. A company buys a quantity of certified goods and gets the credit for that, but once the goods enter the market they are mixed with others, and could end up anywhere. Such a system is cheaper but more open to fraud. It is clear that the more credible a system, the higher the costs involved, so decreasing its competitiveness.
  5. The challenge of verification and monitoring is massive: different players have different access to legal processes, especially on the ground, where local communities may be the most impacted and be the most difficult to contact and monitor in a meaningful way. There may also be issues of corruption, repression and patronage, and conditions where communities are caught between working in very poor conditions or having no work if mechanization becomes the cheaper option due to demands for improved conditions (eg: sugarcane cutters). If certifiers are paid and chosen directly by the companies whose standards they are assessing, there will be conflicts of interest. But how are costs to be paid and by whom?
  6. Divergent interests: Governments, corporations, NGOs, experts and local communities may have very different interests as well as different degrees of influence over projects. They also have divergent approaches to eg: consultation and participation by affected groups. In many producer countries, human rights violations are already linked to the production of sugarcane, soy and palm oil. As a result, existing ‘sustainability’ claims have already met with opposition from civil society.
  7. Who are stakeholders? Defining the stakeholders in any process is complex. Should local communities affected both directly and indirectly by agrofuels production be included? How does one deal with divisions between communities in a region that are benefiting from projects and those who are not? It is easy to claim in the abstract that all actors must be involved, but actually achieving this may be very difficult.
  8. Blending and choice: Since agrofuels are going to be blended with other agrofuels and with petroleum, the consumer will have no means of exercising choice.

Meta-standards based on existing initiatives such as FSC, RSPO, RTRS

The EU-focused initiatives for agrofuel ‘sustainability’ criteria favour what is known as the ‘meta-standard approach’. This would mean that existing or planned labels and certification initiatives like the Forest Stewardship Council (FSC), the Roundtable on Sustainable Palm Oil (RSPO) and the Round Table on Responsible Soy (RTRS), could be approved as qualifying as the ‘meta-standard’ for agrofuels. If FSC certification, for example, were accepted as meeting the requirements of the ‘meta-standard’, FSC-labelled biomass could then be approved, provided a GHG calculation were carried out. However, there are serious questions over all these initiatives as regards their effectiveness and balance of participation between different stakeholders, eg: companies and local communities and their influence in the process, etc. To use these initiatives to develop a meta-standard approach is at least premature and could simply incorporate all the problems they already face within their own regions and sectors.

Marginal lands and people

There is much talk of using so-called ‘marginal’ lands for agrofuel production. Such lands may be partly degraded or disadvantaged in other ways, eg: lacking in water. However, such land may be collective or common land, eg: used by nomadic herdsmen or pastoralists, or by poor inhabitants of villages, eg: women and old people. The classification of certain lands as ‘marginal’, ‘underused’, ‘empty’, ‘neglected’ or ‘wasteland’ may be determined more by political priorities than by the state of that land itself. Such land may be important for biodiversity and was described (Melaku Worede: pers comm. May 2008) as a reserve for germplasm for future crop breeding. Often it is the women in a community who know most about what grows on such land and how to use it to provide valuable additions to the diet or at difficult times of the year. In fact, it is likely that women will be among those most adversely affected by agrofuels developments, as they often depend on marginal land because they do not have the same rights as men in the community to land, money and other assets. Groups who use ‘marginal’ land, including nomadic herders, often have no rights, yet may understand better than anyone else how to use such land sustainably.

Jatropha and marginal land

It is often claimed that Jatropha curcas can be grown on such land and there are major projects in Africa and India to produce jatropha. However, although it was at first asserted that jatropha flourishes in marginal areas on poor soils with little water, it is now becoming clear that jatropha is far more productive in better soils with more water. In Tanzania, for example, small farmers are being cleared from the Kisarawe district, where rainfall and soils are adequate for food production, in favour of jatropha. Even if paid compensation as promised, it will be difficult for them to find equivalent land elsewhere as so much of the rest of the country is extremely arid.

Smallholders used as a justification for agrofuels4

With certain crops, such as jatropha and oil palm, we are told that small farmers will benefit from producing them. However, there is already evidence that in Indonesia, Ecuador and Colombia smallholders are being forced into oil palm production, so that even if they retain title to their land, they have no say in what they produce on it. Often they operate at a serious disadvantage with large-scale players as regards getting their produce to processing centres. It should be noted that these two crops both currently require manual labour and take some years to mature. Smallholder producers may be drawn into debt through producing these crops, especially since their contracts generally offer no protection against crop failures and loans and other expenses must be repaid.

WTO compatibility

Most commentators and initiatives cite the WTO as a major obstacle to certification. Voluntary certification is allowed under WTO rules, but only if there is free competition among different labels and if no measures are taken to inhibit trade in non-certified goods. Mandatory certification (setting social and environmental standards) could well face a challenge from producer countries. The OECD paper “Biofuels: Is the cure worse than the disease?” says that “even if the certification requirements would apply to all countries and to domestic production in a similar way, the measure might still be found against by a WTO dispute panel on the grounds of having a disproportionate impact on trade.”5 However, the countries working on standards (the UK, The Netherlands and Germany) are all members of the WTO and are therefore responsible for setting and changing its rules. The legal situation regarding the WTO and agrofuel certification is far from clear, and much remains up for negotiation. The truth is that WTO rules do give members the right to discriminate in favour of other public policy objectives such as protection of the environment and conservation of natural resources. Yet rather than exploring these possibilities, WTO rules are being used as an excuse for weak certification proposals.

Conclusions

It is clear that the development of criteria for sustainable production of agrofuels is a big challenge, even without considering whether they offer any kind of solution to energy problems. Criteria need to be complex enough to address the issues, yet not so complex as to be inoperable. Since we do not yet understand what sustainable production would involve, we lack benchmarks. Agrofuels have the capacity to cause land use change on a huge scale at unprecedented speed. Indeed they are already doing so. We therefore do not have relevant past experience to apply. Issues of participation by local people are very complex to address and may encounter serious resistance from governments, or be undermined by commercial interests. Above all, at a point when serious questions are being asked about the impacts of industrial agriculture (eg: IAASTD report6) it is vital to avoid any risk that certification may somehow help to greenwash a massive expansion of industrial monocultures in the name of addressing climate change but under pressure to use economies of scale to keep prices down. Such an outcome would be at the expense of rural communities, small farmers and local food production, to say nothing of biodiversity and climate.