BIOFUELS CERTIFICATION SCHEMES AS A TOOL TO ADDRESS SUSTAINABILITY CONCERNS: STATUS OF ONGOING INITIATIVES

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1 BIOFUELS CERTIFICATION SCHEMES AS A TOOL TO ADDRESS SUSTAINABILITY CONCERNS: STATUS OF ONGOING INITIATIVES N. SCARLAT AND J.F. DALLEMAND European Commission, Joint Research Centre, Institute for Energy, Renewable Energies Unit, Via E. Fermi 2749, Ispra (VA), Italy SUMMARY: The development of biofuels certification schemes is a response aiming to address the concerns related to biofuels sustainability. This paper provides an overview of different certification systems, initiatives and approaches related to biofuels sustainability. The existing certification systems in the field of agriculture and forestry provide a useful and practical experience for the development of a biofuels sustainability certification scheme. This paper also refers to the environmental sustainability criteria for biofuels included in the European Commission proposal for a new Directive on the promotion of the use of energy from renewable sources (COM(2008) 19 final of 23 rd January 2008). The final section addresses some difficulties, limitations and drawbacks for biofuels certification. It contains conclusions and recommendations regarding the preparation of future biofuels certification systems. 1. INTRODUCTION Biofuels should reach the target of 5.75% share of biofuels in overall fuel consumption for transport by 2010, according to the Biofuels Directive 2003/30/EC. In addition, the European Commission (EC) has proposed, in the new RES Directive proposal of 23 January 2008, a target for 10% obligatory biofuels share of final energy consumption in transport within each Member States (MS), to be reached in If adopted, the 10% biofuels share is likely to have a strong impact on land use and agricultural markets. Biofuels feedstock production provides new options for using agricultural crops, but there are environmental, social and economic concerns associated with biofuels production. The diversity of feedstock, large number of biofuels pathways and their complexity lead to a high uncertainty over the GHG performances of biofuels, in terms of GHG emissions reductions compared to fossil fuel they replace, especially if land use change is involved. The specific biofuels characteristics, linked to other markets, produced in large volumes and involved in a variety of complex trading patterns, will pose an enormous challenge for developing a certification system. Proceedings Venice 2008, Second International Symposium on Energy from Biomass and Waste Venice, Italy; November by CISA, Environmental Sanitary Engineering Centre, Italy

2 2. BIOFUELS CERTIFICATION Biofuels certification is a response to the concerns related to the biofuels sustainability, mainly to land use changes and deforestation of tropical forests, environmental impact and loss of biodiversity, impact on food availability and food prices. Certification schemes could be used to avoid possible negative environmental, economic and social impact and ensure GHG emissions reductions from biofuels production. Sustainability certification can be then integrated into policy support schemes including incentives, subsidies, tax exemptions, etc. Presently, there are no operational certification systems for sustainable biofuels production. The existing certification schemes vary considerably in scope, as were developed for a wide range of products as result of various concerns. Some systems cover one of the areas in biomass production, such as agriculture, forestry and fair trade, and can provide insight into the structures of certification systems (design, implementation constraints, cost-benefits ). Some schemes include sustainability criteria that could be adapted for bioenergy and biofuels certification, and provide a useful experience for the development of a biofuels certification scheme, or for benchmarking. 3. EXISTING CERTIFICATION SYSTEMS 3.1 Certification systems for agriculture Several certification systems apply to the agricultural sector, referred to different forms of farming, organic agriculture, integrated agriculture, based on good agricultural practice, to ensure environmental friendly or sustainable production methods to provide safer or healthier products. Agricultural certification schemes address a core set of concerns relating to agrochemical handling and use, safety and health of workers and food traceability issues Certification for fair trade FAIRTRADE labelling is a certification system for traded goods aiming to ensure a fair payment of agricultural products, enhance the quality of life of the producer and improve their market access. The Fairtrade certification covers a range of food-products such as bananas, cocoa, coffee, cotton, vegetables, nuts/oil seeds and purees, quinoa, rice, sugar, tea, wine and non-food products, such as cotton, cut flowers, ornamental plants, sports balls. The crops must be grown and harvested according to international standards set by Fairtrade Labelling Organizations (FLO). The standards were developed following the requirements of the ISEAL (International Social and Environmental Accreditation and Labelling Alliance) Code of Good Practice for standard setting, based on international standards and conventions such as the International Labour Organization (ILO). The procedures for certification are based on the ISO standards for product certification bodies (ISO 65). FLO international standards contain minimum and progress requirements for producers to demonstrate improvements over time of product quality, work conditions and environment and to invest in the development of their organisations and their welfare. Fairtrade include minimum standards for socially responsible production and trade and minimum criteria for social, economic and environmental sustainability. Fairtrade guarantee a Fairtrade Minimum Price considered as fair to producers that covers the cost of sustainable production. The Fairtrade Premium aims at social and economic development in the community so the producer can invest in projects for environment, social and economic development. The standards for small farmer organizations include requirements for democratic decision-making, capacity building and economic strengthening of the organization. The standards for hired labour include requirements for decent wages, freedom to join unions and bargain, ban on forced or child labour and requirements for health and safety.

3 3.1.2 Sustainable Agriculture Network - Rainforest Alliance (SAN) SAN is a coalition of organizations promoting social and environmental sustainability of agricultural production for coffee, bananas, flowers, citrus, cacao and flowers and ferns. It provides certification for farmers and companies against social and environmental sustainability standards. SAN provides voluntary certification as a guarantee that the products were produced according to a specific set of criteria covering ecological, economic, and social aspects. The compliance is evaluated against social and environmental performance and best management practices. The standard complies with the ISEAL Alliance Code of Good Practice for setting social and environmental standards. The SAN standard covers the management of farms and includes aspects of agricultural, social, legal, labour and environmental issues. Farms must demonstrate continuous progress and improvements, and allows them to compare their performance with that of neighbouring farmers and in other regions. The SAN standard is based on a number of ten principles, including criteria of best practices for social and environmental management. The indicators contain examples of both good and unacceptable social and environmental practices. The indicators are specific to different countries, regions or cultures. Farms must completely comply with a critical criterion in order to be certified. SAN certification also requires a chain of custody system as a tool to avoid mixing of products from certified farms with products from non-certified farms EUREPGAP Eurepgap is a private voluntary certification scheme of agricultural products aiming at the minimization of environmental impacts of crop production through quality management and track and trace control. Eurepgap aims to ensure the quality of agricultural products to increase consumer confidence in food quality and safety. Eurepgap proposed a farm assurance scheme, a Good Agricultural Practices (GAP) framework, guidance for continuous improvement and development of best practice. The Integrated Farm Assurance standard covers the whole agricultural production process. Eurepgap is based on GAP in farms defining essential elements for best practice in agricultural production. It incorporates Integrated Crop Management (ICM), Integrated Pest Management (IPM) practices and Quality Management System as the basis for sustainable agricultural production. Eurepgap includes Control Points and Compliance Criteria (Major Musts, Minor Musts and Recommendations) for all producers. Eurepgap focuses mainly on criteria on environmental and social sustainability, minimization of negative environmental impacts of farm production, optimization of inputs and a responsible approach to health and safety. It covers criteria on environmental protection, soil management, handling and use of agrochemicals and fertilisers, biodiversity, use of GMOs. A chain of custody was set to ensure traceability from end-user to the producer, covering all activities from farm to consumer, including trading, storage, collecting, transport and processing. The certified products must not be mixed with non-certified products. Eurepgap includes a framework for benchmarking existing schemes and standards, including traceability. It recognise other farm standards through a procedure that establishes the equivalence of that scheme against a set of standards. The standard must be developed in compliance with requirements of EN45011/ISO/IEC Guide International Federation of Organic Agriculture Movements (IFOAM) IFOAM is a worldwide organization, aiming to promote Organic Agriculture. IFOAM certification aims to show and guarantee that a product has been produced organically. IFOAM is actually a Meta-Standard, which focuses on accrediting other standards for organic agriculture according to the general criteria set out by IFOAM. IFOAM standard is based on several principles for Organic Agriculture a). health - sustain and enhance the health of soil, plant, animal, human and planet, b) ecology - be based on living ecological systems and cycles, c)

4 fairness - with regard to common environment and life opportunities, d) care - organic managed in a precautionary and responsible manner to protect the health, well-being and the environment. The IFOAM Basic Standards includes principles, recommendations, and baseline standards to be followed for producing organic crops and maintaining organic integrity in handling and processing. The standards are presented as general principles, recommendations, basic standards and derogations. They were developed according to the ISEAL Code of Good Practice for setting social and environmental standards. Certification standards should take into account local conditions and provide more specific requirements than IFOAM basic standards. The IFOAM Basic Standards and the IFOAM Accreditation Criteria are used by the International Organic Accreditation Service (IOAS) for accreditation of certification bodies and standards setting organizations. The IOAS compares the standards used by the certifier against the IFOAM Basic Standards and certification body performance against the IFOAM Accreditation Criteria. 3.2 Certification systems for forestry Forest Stewardship Council (FSC) FSC is an international body which accredits certification organizations on a voluntarily basis. The goal of FSC is to promote environmentally responsible, socially beneficial and economically viable management of the forests, by a worldwide standard of recognized principles. There are two types of FSC certificates: Forest Management Certificate and Chain of Custody Certificate. The FSC certification contains principles, criteria and indicators for sustainable management of tropical, temperate and boreal forests, plantations and partially replanted forests. The FSC has defined ten principles and associated criteria of Forest Stewardship. FSC certification is based on the ISO/IEC Guide 65: 1996 General requirements for bodies operating product certification systems. More detailed national and local forest stewardship standards may be established at national and local levels to take into account differences in forest management operations, local resources and the environmental conditions. A chain of custody certification includes standards for chain-of-custody for wood products, which covers the raw materials from the forest to the end-user, including all stages of processing, transformation, manufacturing and distribution. The chain of custody control system is based on a set of policies, systems, procedures and work instructions to ensure that all certified products meet all of the requirements of FSC standards. The procedures of the Chain of Custody standard comply with the ISEAL Code of Good Practice for Setting Social and Environmental Standards (2004), ISO/IEC Guide 59 Code of good practice for standardization, and the World Trade Organisation Technical Barriers to Trade Agreement Code of good practice for the preparation, adoption and application of standards Programme for the Endorsement of Forest Certification Schemes (PEFC) PEFC is a global umbrella organisation for the assessment and mutual recognition of national forest certification schemes. PEFC certification is defined in international standards establishing certification requirements that include normative documentation and guidelines for development, elaboration and implementation. Minimum requirements are defined for scheme development, certification criteria, implementation and chain of custody. Minimum requirements are to comply with a quality (ISO 9001:2000) or environmental (ISO 14001:1996) management system. Certification is carried against national standards endorsed and mutually recognised by PEFC. The criteria cover sustainable forest management, including economic, social and ecological aspects, elaborated and adopted at national or regional level. They include management and performance requirements and must be consistent with the relevant Pan European Operational Level Guidelines (PEOLG) for sustainable forest management or ATO/ITTO guidelines for tropical forests. The guidelines provisions are normative and obligatory. Certification requires

5 compliance with national laws and international conventions relevant to forest management covering social or environmental areas whether or not ratified. The relevant international conventions (Convention on Biological Diversity, Convention on International Trade in Endangered Species of Wild Fauna and Flora, and Biosafety Protocol) must be respected as well. There are two options available for chain of custody: physical separation and percentagebased methods. PEFC chain of custody requires documented procedures including description of the raw material flow, organisation structure and records to provide proof of conformity. Adequate measures, including risk assessment, must ensure that the certified products do not include raw material from controversial sources. The chain of custody can be applied within the quality management (ISO 9001:2000) or environmental management system (ISO 14001:1996). 3.3 Initiatives for sustainability criteria establishment New initiatives are underway to establish sustainability criteria for biofuels feedstock production in tropical countries, such as palm oil, sugarcane and soybean. Various partners such as NGOs, industrial companies, traders and other stakeholders are involved. Since biofuels from tropical countries are often presented as having negative impact, the activities of preparation of biofuels certification in tropical countries are essential both for exporters and importers Roundtable on Sustainable Palm Oil (RSPO) RSPO, located in Zurich and secretariat based in Kuala Lumpur, is a global multi-stakeholder initiative for the development and implementation of a standard for sustainable palm oil. RSPO aims to promote the production, procurement and use of sustainable palm oil, through the development, implementation and verification of credible global standards. The first meeting of RSPO (Kuala Lumpur, 2003) defined sustainable production and use of palm oil as legal, economically viable environmentally appropriate and socially beneficial management and operation. The principles and criteria, indicators and guidance were developed for legal, economically viable, environmentally appropriate and socially beneficial management and operations for sustainable palm oil production. National indicators and guidance must be developed and get recognition by RSPO. A working group developed a set of 8 principles and 48 criteria, including indicators and guidance for sustainable palm oil production in October They cover major economic, social, environmental and general aspects of palm oil production, including the establishment and management of plantations and primary processing. The criteria are expressed in terms of process and management requirements, according to the best practice. The proposed system does not include a GHG emissions saving criterion. However, the working group recommend to establish a working group to consider all issues relating to GHG emissions. Draft requirements for supply chain were developed. Any individual batch of palm oil can be traded through the following supply chain mechanisms: Full segregation, Mass balance and Book and Claim. For fully segregated and mass balance trade of palm oil, a traceability mechanism from the plantation to the end product is required. It will require a set of written procedures and instructions and accurate, complete, records and reports. The book and claim option would need a system based on tradable certificates, a mechanism for controlling and trading certificates. The RSPO counts on a strong contribution from South-East Asia stakeholders, mainly from Malaysia and Indonesia Roundtable on Responsible Soy (RTRS) RTRS is a civil association under Swiss Law, aiming to act as forum to develop and promote criteria for the production of soy on an economically viable, socially equitable and environmenttally sustainable basis. RTRS has the task to initiate and to seek consensus for the principles and

6 criteria for responsible soy production, processing and trading of soy. The RTRS certification proposed, which is still under development, is a voluntary certification based on a "two-pillar" approach. The first pillar consists of a voluntary business-to-business certification system funded by market premiums. The second pillar is a wider programme aimed at achieving the targets through a combination of training, support and incentives for soy producers and other measures. The principles criteria and indicators were developed to be implemented by soy producers, processor and traders. Later on, the principles, criteria and indicators and a draft verification system will be further developed. RTRS Development Group aims to produce a set of baseline requirements or standards, expressed as verifiable principles, criteria and indicators that define responsible production and early stages of processing of soy. The draft principles and criteria for responsible soy production and trade were made available by the Development Group on March 2008 for public debate until 30 th May The RTRS certification requires a link between the production and certified soy. Since the supply chain can be very complex and involves several stages, a mechanism for supply chain control was proposed. There are three broad approaches to supply chain control, which have been used in the agriculture and forestry commodity sector, which were put under discussion, together with their main advantages and disadvantages: Segregation, Controlled mixing and Tradable certificates (book and claim) Better Sugarcane Initiative (BSI) BSI is a multi-stakeholder association having the objective to contribute to improvements of environmental, social, and economic impacts of sugarcane production and primary processing. BSI aims to reduce the impact of sugarcane production on the environment and to enable sugar production to contribute to social and economic benefits for sugar producers through a set of global set of sustainable-sugar practices, principles and criteria. Better Management Practices (BMP) and guidelines will be used for environmental management, improving overall environmental performance and other sugar processing impacts. BSI has the objective to identify, support and encourage the use of BMP for different scale sugarcane production that can reduce the key environmental impacts and provide benefits to sugarcane producers and others from the sugar chain. BSI aims to establish performance-based principles, criteria and indicators, which include environmental, social, and financial considerations for Better Sugarcane. BSI plans to address issues such as soil productivity, water use, effluent management, biodiversity and equitable labour. It also aims to define performance-based guidelines for sugarcane production taking into account local conditions to reduce social and environmental impacts and improve the economic conditions for farmers. BSI will initially focus on the most significant issues in sugarcane production and processing. Based on good practice, guidelines will be developed to: a) minimise the sugarcane effects cultivation and processing on environment, b) maintain the value and quality of soil, health and water resources, c) ensure production is profitable and d) ensure sugarcane production in a socially equitable environment. 4. INITIATIVES FOR BIOFUELS CERTIFICATION A large number of initiatives are under progress aiming at developing sustainability standards and criteria and biomass certification schemes. In Europe, some ongoing initiatives for biofuels certification are performed at national level. The European Commission also proposed a set of sustainability criteria for biofuels in its proposal for a new Directive on the promotion of the use of energy from renewable sources (COM(2008) 19 final).

7 4.1 Initiatives in Europe UK Renewable Transport Fuel Obligation (RTFO) sustainable biofuel standard RTFO is the mechanism adopted by the UK to reach a certain share of biofuels in the trans-port fuels. RTFO was developed in cooperation with a large number of stakeholders within the Low Carbon Vehicle Partnership. However, in July 2008, the UK Government proposed to slow down the rate of introduction of biofuels through the RTFO following the Gallagher Report, which expressed concern about the impacts of biofuels. UK aimed to set a certification scheme for biofuels to ensure the sustainability of biofuel production. Only certified biofuels will count in the RTFO. Two projects were set to propose a system for sustainability production, carbon reporting, chain of custody and environmental and social criteria and indicators. The scope of certification will be limited to feedstock production posing most serious sustainability risks. The Meta-Standard approach was adopted to use existing sustainability standards. Biofuels feedstock will be considered as sustainable if certified by an existing qualifying sustainability standard. An existing standard can be accepted as a "qualifying standard" for the RTFO, if its principles and criteria have a sufficient good coverage of the RTFO criteria and indicators and proper auditing procedures. Supplementary checks must be done on so-called gap criteria, which are not sufficiently covered. The proposed benchmarking procedure was based on the procedures of EurepGAP, FSC or IFOAM. The criteria and indicators were based on sustainable agriculture and forestry certification schemes. The proposed environmental principles and criteria include minimum requirement and recommended criteria and indicators, considered good practice. The principles were grouped in 5 areas: carbon storage, biodiversity, soil conservation, sustainable water use, air pollution. The social criteria are based on Social Accountability in Sustainable Agriculture, with additional criteria for land right issues and the effects on local community. Biofuel suppliers will be required to show a link between the farm or plantation and the feedstock produced according to the sustainability standards. Within RTFO system, this link must not be necessarily a physical link. All chain of custody mechanisms, bulk commodity, mass balance and book and claim are allowed for carbon and sustainability reporting. For the book and claim system, carbon and sustainability data have to be provided for the same production site. For this, default values will be used for all steps not covered in the chain (Dehue 2006). The UK government and/or scheme administrator will monitor displacement effects at macro level and set up a proper land use planning. Several measures have been proposed: reporting on previous land use or stimulating of feedstocks production on degraded or idle land and social reporting. No criteria have been added for issues relating to the competition of biofuel with food. The carbon intensity calculation must include all direct, indirect or avoided emissions, using data based on IPCC (Intergovernmental Panel on Climate Change) guidelines. The carbon stock conservation is expressed as carbon pay back time: the years a crop needs grow to compensate the destruction of the carbon storage due to land use change. The maximum payback time proposed is 10 years. An energy plantation should contribute to at least 50% GHG reduction over its lifetime. For co-products, it was proposed a) substitution as first choice, b) allocation when used for heat, electricity or converted to another biofuel or c) allocation by market value. Default values will be set on conservative basis, representing the worst common practice (Bauen 2007) Netherlands Sustainability Certification of Biomass The Netherlands aims to incorporate sustainability criteria in energy policy to ensure that biomass is produced and processed in a sustainable way. The Cramer Committee for Sustainable Production of Biomass was set in 2006 to develop a system and formulate sustainability criteria for the production and conversion of biomass for energy, fuels and chemistry. The Committee

8 proposed two levels of reporting, at company and macro level, as essential elements for sustainable biomass production. The bioenergy or biofuel suppliers will have to comply with the proposed "testing framework" and the company requirements. This framework was developed in line with various existing initiatives and certification schemes for the biomass sustainability. A Meta standard approach was proposed to ensure a sustainability certification system through a link with existing certification systems. The assessment of existing certification standards will investigate their equivalence. For this aim, the Cramer Committee proposed to set up a committee or project group to coordinate the process of declaring equivalent a certification system to the proposed testing framework, probably with the government involvement. The Committee set six themes based on a "triple P approach": People, Planet and Profit for corporate social responsibility: GHG emissions, competition with food and local applications, biodiversity, environment, prosperity and social well being. It formulated principles, criteria and indicators in correlation with existing certification (FSC, RSPO, RTRS and SAN) as minimum requirements for short-term (2007) and medium term (2011). A reporting system was proposed for the criteria for which no indicators could be formulated. No distinction is made between residual flow and main product, except for those with low economic value (<10%) and no useful application. For these residual flows, GHG balance and soil effects will be considered. Monitoring macro effects and land use planning at macro level (regional, national or global) was proposed. The development of a monitoring system on the changes in land use, establishment of land use planning and collecting the necessary data will be the responsibility of the government and the authorities of producing countries. The Committee proposed a list of the monitoring data on indirect land use changes at macro level: land prices and ownership, food availability and prices, relocation of food production and cattle breeding, deforestation and loss of nature reserves changes in vegetation and share of vegetation and crops. A methodology was proposed for calculating GHG emissions, including the whole chain and all sources from raw materials production, transport, and conversion to end-use. The assessment will use standard values determined on a conservative basis. A standard value for a set of chains and product combinations will be proposed. Land use changes are part of the calculation; indirect land use changes are not. Minimum 30% emission reduction must be achieved for biofuels, and 50-70% for electricity production. A more ambitious value, of at least 80-90% reduction was proposed on long term. The final choice of a chain of custody system is open. The book and claim with biofuels certificates was considered more adequate for large bulk quantities of commodities, with a track-and-trace was considered a desirable perspective (Cramer, 2006) Germany Biofuels Sustainability Ordinance (BSO) In Germany, the Biofuel Quota Law came into force in 2007, which seat mandatory biofuel targets. The BSO was adopted in Germany in December 5th, It established the key issues and requirements for biofuels sustainability. Biofuels will count towards the biofuel quota and be eligible for tax relief only if biofuels feedstock is produced according to certain require-ments: a) sustainable cultivation of agricultural land, b) protection of natural habitats and c) showing a Greenhouse Gas Reduction Potential (GGRP) of at least 30 % and 40% from The following requirements must be met for biomass production: a) no significant increase in emissions of acidic, eutrophic, ozone-depleting or toxic substances; b) no significant deterioration of soil function or fertility; c) no significant deterioration of water quality and water supply; d) no significant deterioration of species and ecosystem diversity and e) environmentally safe use of fertilizers, pesticides and herbicides. Biofuel feedstocks have to be produced: a) according to the good practice of agriculture, forestry and fisheries or b) in conformity with the EU crosscompliance rules. Biofuel feedstock may not be produced on land, which is a nature reserve or high natural conservation value areas of relevance to biodiversity, areas with rare, threatened or

9 endangered ecosystems and areas. Biofuels feedstock may be produced in conformity with the objectives of protected areas or in which the nature conservation value is not impaired due to biomass cultivation. Conversion of forests to agricultural land or plantations is not allowed. Biofuels must have a GGRP of at least 30% in the present and 40% starting from 2011, taking into account the full life cycle of biofuel, including emissions from land-use change. For GGRP calculation it can be used actual emission values or the default values prescribed, in cases in which these actual values are not determined. GHG emissions caused by direct land use change effects have to be considered as well. The contribution to the energy quota shall be calculated by their GGRP compared with the average GHRP of biofuels blended in the previous year, to provide incentives for biofuels with better GHG performances (Delbrück, 2008). Certificates will be issued to biofuels meeting the sustainability requirements. The certificate shall be issued to the "interfaces" in the biofuel chains. Certificates will include annual average values for GHG emissions expressed as in kilograms of CO 2 equivalent per GJ of fuel for each "interface" detailed by biofuel type and production chain phase. Biofuels providers are required to supply data on the energy value of the biofuels and the GGRP in kilograms of CO 2 equivalent per GJ. The BSO implementation depends on decisions at EU level on a common biofuels certification system. In addition to biofuels for transport, Germany is also preparing legislation on sustainability requirements for bioenergy in its revision of the feed-in tariff law and the new renewable heat law, based on BSO experience. 4.2 International initiatives California Low-Carbon Fuel Standard An executive order was issued in California in 2006, stating the benefits and potentials of bioenergy for clean, renewable power, fuels and hydrogen, and calling for actions to meet biofuel and biopower targets. A Roadmap for the development of biomass was proposed, including suggestions on standards and best practices for sustainable feedstock, land use, environmental impact and resource monitoring. A Low-Carbon Fuel Standard (LCFS) was set in 2007, addressing alternatives to oil aiming at reducing GHG emissions and stimulating fuel technologies improvements to allow California to meet its climate policy. LCFS called for a reduction of at least 10% of carbon intensity of fuels by A draft compliance schedule to meet the 2020 target was made in 2007 to be included in the State Alternative Fuels Plan. The University of California assessed the options for achieving a 10% reduction of the carbon intensity of transportation fuels in California by It made recommendations related to GHG emissions and carbon intensity of fuels, certification, land use change, environmental and sustainability issues etc. Biofuels produced on some land types will be banned: old growth forest, national and state parks and other protected lands. In order to reduce GHG emissions, biofuels must: a) use advanced production methods, b) be produced from biomass grown on degraded land or c) be produced from wastes or residues. Land use change effects should be included in the LCFS. Additional sustainability requirements unrelated to GHG emissions were not considered appropriate from now. Other sustainability impacts could be later considered. GHG emissions from the production of fuels should be included in the LCFS. Whenever possible, values used to certify the carbon intensity of fuels should be based upon empirical data of the specific inputs and processes in the fuel life cycle. Pessimistic default values should be determined by state agencies for each of these inputs and processes. Fuel providers will have the option of either adopting these pessimistic values with Global Warming Intensity (GWI) higher than average values or providing sufficient data to certify a lower life cycle GWI value. Reporting obligation was recommended on fuel providers on the sustainability impacts of biofuels. The state should perform assessments of the sustainability impacts of biofuels

10 production in California, US and globally and should consider policies and sustainability issues to mitigate these effects. The assessment should include the GWI of direct and indirect land use change for crop based biofuels, based on an international methodology for accounting for land use change. In case of negative impacts, the state should take action to mitigate these impacts through best management practices, incentives, regulation and sustainability requirements Roundtable on Sustainable Biofuels (RSB) The Roundtable on Sustainable Biofuels is an initiative of the Swiss "École Polytechnique Fédérale de Lausanne" (EPFL), to develop standards for the sustainability of biofuels. RSB formulated sustainability principles and criteria through a series of meetings, teleconferences, online discussions and meetings aiming at achieving global, multi-stakeholder consensus. Drafting criteria for meeting these principles was carried out through specific Working Groups: GHG Life Cycle Analysis (GHG WG), Environmental Impacts (ENV WG), Social Impacts (SOC WG), and Implementation (IMP WG). The ENV WG aims to set principles, criteria and indicators for environmental issues related to the production, trade or consumption of biofuels. The issues addressed are: conservation, soil, water, air, biotechnologies. The WG will concentrate on a few major issues with the highest impact on sustainability, instead of addressing all the issues in the biofuel chain. The SOC WG will draw the principles on social impacts and criteria on specific socio-economic aspects. The WG established the criteria for labour rights, food security, poverty alleviation, land rights, and other social elements of sustainable biofuels production, based on social standards in agriculture. The IMP WG will review the recommendations of the other working groups to ensure that the standards are easy to implement and measure so that they are accessible by small-scale and other low-income farmers. Pilot testing will make use of the experience of other sustainability standards, such as the Low-Carbon Fuel Standard and the Roundtable on Sustainable Palm Oil. The GHG WG will recommend a methodology to calculate the efficiency of biofuels production for calculating the biofuels GHG emissions. The GHG WG aims to identify and spread the current best practice for the assessment of biofuels GHG emissions. It aims to agree on a tool that includes direct and indirect GHG emissions, from fossil energy used for growing, transporting and processing biofuels and GHG emissions from land use changes. The RSB adopted a Meta standard approach, with a generic standard covering all feedstocks and countries, but the system is yet to be set. The idea is to recognize other existing systems and completing them with some issues. All biofuels traceability options are open for RSB while RSB will not decide probably on selecting one or another since it will recognize multiple standards European Commission Proposal (January 2008) for biofuels sustainability certification The EC acknowledged that it is essential to guarantee that biofuels feedstock is produced in a sustainable way, both in the EU and abroad. The EC organised public consultations to collect the views of public authorities, companies, NGOs and other parties interested in biofuels sustainability. The EC has formulated, in its proposal for a Directive on the promotion of the use of energy from renewable sources (COM(2008) 19 final, 23 January 2008), sustainability criteria to prevent loss of biodiversity, use of land with high carbon stocks and to reach GHG gas emissions reductions using biofuels. Biofuels should comply with these criteria to count towards biofuel targets and for being eligible for possible financial support. The EC Proposal excludes several land categories, with recognised high biodiversity value, from being used for biofuel production: a) undisturbed forests; b) areas designated for nature protection; c) highly biodiverse grassland. Specific land use changes that would lead to high carbon losses should be prevented. Biofuels should not be made from material grown on high carbon stock land: a) wetlands, including pristine peatland; b) continuously forested areas.

11 Obligatory reporting by EU Member States and obligatory monitoring and reporting by the EC aims to address other biofuels impacts. EU Member States must report on commodity prices, land use changes and the estimated impact of biofuel production on biodiversity, water resources, soil quality and the estimated GHG savings. The EC shall monitor the origin of biofuels, commodity price changes, any effects on food security and GHG savings from the use of biofuels. The EC proposed GHG emissions reduction from the use of biofuels is of at least 35%. The contribution of biofuels from wastes, residues and lignocellulosic material shall be considered as twice that from other biofuels. Biofuel providers can use for GHG calculation: a) default values, b) actual values or c) sum of actual values and disaggregated default values. EC proposed conservative default values higher than in typical cases. The emissions from: extraction or cultivation of raw materials, land use change, processing, transport, distribution and fuel combustion must be included. Biofuels suppliers must show that the environmental sustainability criteria have been fulfilled. The verification of compliance of biofuels consignments will be based on the mass balance method. With this method, there is a physical link between the production of sustainable biofuels and the consumption of biofuels. In this method, consignments of raw material or biofuel with differing sustainability characteristics can be mixed, but maintaining information about the sustainability characteristics of biofuels. The proposal for a new Directive on Fuel Quality (COM(2007) 18) is now under discussion in the European Parliament (EP) and in the Council of the European Union. The EP (2007) proposed to include biodiversity and social criteria to ensure no significant impact on biodiversity, no feedstock production or extraction in proximity of valuable nature or protected areas and no deforestation or net loss of other carbon stocks (wetlands and permanent grasslands). The EP introduced criteria to comply with international conventions and regulations, i.e. ILO standards and UN conventions for the protection of indigenous people. Mandatory reporting should ensure no indirect land use change or displacement of agricultural activities and address social conesquen-ces, food prices or food security. Sustainability criteria should be based on biofuel traceability, and all companies in the chain are to be certified. EP required a GHG reduction of at least 50% for biofuels, to offset their negative environmental effects, increased competition for land, water and food, and pressure on forests and local communities. EP proposed to restrict public subsidies to non-fossil fuels fulfilling sustainability criteria and having a GHG performance better than the baseline criteria of 20% now and 80% by EP proposed fuels suppliers to monitor and report the life cycle GHG emissions and reduce these emissions per unit of energy. 5. CERTIFICATION: A SOLUTION FOR BIOFUELS SUSTAINABILITY? 5.1 Limitations and drawbacks for biofuels certification Biofuels certification faces large difficulties due to the amount of possible types of biomass feedstock and high number of conversion options. Complex production chains exist, while biofuels might have various types of direct or indirect impact, either positive or negative. Realistic expectations regarding the possibilities and opportunities but also limitations and drawbacks of biofuels certification must be considered. Land use change and tropical deforestation are not a recent problem, being caused among others by wood logging (legal or illegal), expansion of agricultural farming and cattle ranching areas. The highest sustainability risks related to biofuels production (if associated to bad practices) lie in deforestation, biodiversity loss and conversion of high carbon land. In the worst cases this could offset climate change benefits or other benefits from biofuels use due to a huge carbon debt and very long payback time. A crucial remaining question is to what extent biofuels certification can prevent negative land use change.

12 A biofuels certification system (or network of systems) could provide the operational framework for sustainable biofuels production and prevent the use of high value land for biofuels production. Such system should address local, regional and global components in its implementation. One of the key aspects for biofuels sustainability is the avoidance of indirect effects. Indirect effects are the most complex issue, due to the fact that they can have a global dimension, are affected by policies (agriculture, environment, energy, trade, rural development ) as well as markets. They affect multiple crops or land use types to varying degrees. Indirect effects are difficult to monitor measure and control and no assessment methodology is presently available. Biofuels can be produced from various crops and in addition agriculture is about the 4Fs: Food, Feed, Fuel and Fiber. Therefore, considering the multiple links between biofuels feedstocks and food market, one question arising is if sustainability certification should address only biofuels. Will a double standard policy between biofuel and food/feed production allow the effective operation of a sustainability certification system? In our view, additional sustainability measures need to be set in addition to the biofuels or even bioenergy sustainability criteria. Other important issues relate to the impact of biofuels on food security and food prices. Crop production on set aside, marginal and degraded land, improving farming practices and sustainable use of agricultural and forest residues are measures proposed to prevent the possible negative effects of biofuels on food availability or food price increase. However, there are concerns on the availability and use of such low quality land and additional negative effects of intensified agricultural practices aiming at higher yields. An option could be the promotion of lignocellulosic biofuels (second generation) that would not compete directly with food and would be able to grow on low quality land, although there is presently no certainty about their better performance in operational conditions compared to first generation biofuels. Table 1. Criteria relevant for biofuels sustainability in existing or proposed certification schemes Fair SAN EurepIfoam RSPO RTRS FSC PEFC RTFO NL BSO RSB EC trade gap Biodiversity Soil protection + +/- +/ / Water protection +/- + +/- +/ / Air emissions + - +/ / GMO no + no Social well being /- +/ Working conditions /- +/- + +/ Human & land rights +/- +/- - +/ /- +/ Direct land change Competition with food Indirect effects ? + Carbon conservation - +/- - +/ / GHG reduction CoC - separation / mass-balance / book and claim / Implementation v v v v v v v v o o o v o Benchmarking (+ included; - not included; v: voluntary; o: obligatory)

13 The development of a GHG certification tool will be a major challenge, due to the uncertainties related to the quantification of the emissions over the entire biofuel cycle, different interests of the industries, different accounting methods for by-products and different approaches for calculating GHG performances. There is no experience on an operational system providing information on the GHG emissions reductions associated to a given certified product. The limitations in the design and implementation of the chain of custody will pose a big challenge for an adequate traceability scheme able to provide information on biofuels sustainability and GHG emissions. There are different options for such a scheme but there is a lack of consensus as to which system, if any, must be preferred. To prevent biofuels from being produced in unsustainable way and to link a GHG performance to a specific batch of biofuel, sustainability and carbon data should refer to the biofuels feedstock and its production site. Implementation of an operational, credible and transparent system will be a difficult task since it will need complex administration systems and logistical infrastructure. Despite all the difficulties encountered, biofuels certification can provide an operational framework for verifying whether biofuels crops are cultivated and processed in a sustainable way. In the absence of a certification scheme and with oil price rise, biofuels might be produced anyway with uncontrolled impact. The implementation of a global scale, comprehensive certification scheme for biofuels might be able to secure different direct and indirect effects of biofuels production. 5.2 Discussion of biofuels sustainability at EU level Prior to the ongoing debate on biofuels sustainability, environmental issues have had a key role in the EU Common Agricultural Policy, which aims at integrating environmental considerations and adopting agricultural practices to protect the environment and maintain the countryside. These requirements seem adequate enough to ensure a reduced environmental impact of agricultural production. Farmers must comply with minimum environmental standards as a condition for benefiting from market support ("cross-compliance") since 2005 (Regulation (EC) No 796/2004 and No 1782/2003). Farmers are obliged to keep land in good agricultural and environmental conditions, which include soil protection and maintenan-ce of habitats and landscape and the protection of permanent pasture. Compliance with minimum environmental standards is a condition for eligibility for support under several different rural development measures. Farmers who adopt environmentally friendly farming techniques receive support for improving farming practices. The measures included in the agri-environmental sche-mes are a) environmentally extensification of farming; b) management of low-intensity pasture systems; c) integrated farm management and organic agriculture; d) preservation of landscape and hedgerows, ditches and woods; e) conservation of high-value habitats and biodiversity. Within the EU, the Food Quality Assurance Schemes (FQAS) are voluntary schemes to provide assurance that products or processes comply with certain quality requirements. The main FQAS requirements include authenticity, product and process quality, hygiene and safety. They can show that products are produced in a particular region or according to a traditional method (quality labels) or animal and environment friendly production methods (organic farming). Council Regulation (EC) No 834/2007 on organic production and labelling of organic products set out a set of objectives, principles and basic rules for organic production. Organic certification aims at proving that agricultural and food products have been produced using methods respecting the environment and animal welfare, without the use of synthetic chemical products. Organic requirements include provisions for growing, storage, processing and transport. The EC proposed sustainability criteria regarding biofuels (EC Directice Proposal on the promotion of the use of energy from renewable sources, COM (2008) 19 of 23 January 2008) intend to address the following major concerns: biodiversity losses, land use changes and GHG emissions. At global scale, EU Member States must report on the estimated impact of biofuels