CREPE-TNI Agrofuels Study

Interrogating EU Biofuels Policy: Drivers, Assumptions, Visions

and Impacts

(-or- “The Hummer and the Sickle: Who’s Bio-fuelling Who, Why and How”)

By J. Franco & L.Goldfarb

Preface:Who’s Bio-fuelling Who? (For whom and what purposes? How, where, and with what implications?)

“In principle biofuels offer an ideal alternative since, when based on EU grown crops, they are practically 100% indigenous and CO2 neutral since their carbon content is captured from the atmosphere” -- European Commission, 2001.

“An Inconvenient Truth reinforced public ignorance precisely by focusing on the inconveniences of consumerism, rather than its conditions. The ‘inconvenience’ is that we have no choice but to reduce fossil fuel consumption -- a worthy start. But the real inconvenience would be to acknowledge the conditions on which consumption patterns depend -- conditions moving humans inexorably onto the list of endangered species. Consumption is but the tip of the iceberg, and focusing the debate on consuming alternative energy shields existing production and distribution systems from view and culpability. Not only that, but a debate focused on green consumption simultaneously obscures and enables corporate interests to extend their power, and profit, through a new agrofuels project” -- Philip McMichael, 2007.

“Climate change is a global problem and needs a global solution. To meet its targets, Europe will need feedstocks and biofuels which are produced outside Europe” -- Neste Oil, 2008.

Introduction

Renewed push in promoting agrofuels on a large scale by Europe & North America for use especially in transport; “biofuels” portrayed as “greener” and more secure renewable energy source that must be tapped if humanity is to deal with (i) high oil prices & peak oil (ii) climate change and (iii) growing global transport sector.

Promotional biofuels policymaking is framed in a way that (I) privileges a broadly distinct economic system & way of life, (ii) assumes it is neither possible nor desirable to fundamentally re-evaluate the growing global transport sector, (iii) and thus seeks to preserve the status quo (for some??) through better environmental management techniques and bio-technological innovations.

Against this backdrop, the intentions, interests, assumptions and worldviews underpinning today’s agrofuels promotion must be interrogated -- perhaps now more than ever because the EU policy debate has gone in favor of promoters of large-scale agrofuel promotion (see Dec2008 Energy Package).

Therefore: CREPE-TNI Study on Agrofuels

CREPE-TNI Agrofuels Study

Research objectives(i) facilitate interdisciplinary research by/with CSOs on agrofuels policies and their impact;

(ii) identify, explain and interrogate key assumptions underlying government policies promoting agrofuels;(iii) link underlying assumptions with accounts of sustainable development.

Research questions(i) Who are the main actors promoting agrofuels, what are their main arguments and how are these being constructed in society?(ii) What are the factors/actors shaping policies promoting agrofuels in the North & South, and what are the underlying assumptions involved?(iii) How do key actors in the policymaking process understand “sustainability” of agrofuels in terms of social & environmental effects, and how do various stakeholders understand “the environment”?(iv) How do the policies & assumptions work out in practice in terms of agrofuel production and use?

Research methods(i) Conduct literature review, desk study & document analysis (Framework Paper)

(ii) Commission field work and papers form local teams (Case Studies)(iii) Engagement with relevant experts & organisations (Informal meetings & CSO workshop)

This presentation(i) based on the draft Framework Paper;(ii) mainly addresses the first 3 research questions;(iii) introduces the case studies that will be presented later by the case study researchers themselves.

BackgroundTerminology(i) “Biofuels”(ii) “Agrofuels”

World-historical context: Human use of a non-renewable energy source (fossil fuel)

(i) Today fossil fuels (e.g., oil, coal and gas combined) account for 81% of world energy demand.

(ii) Today rapidly diminishing global supply of fossil fuels; we are reaching “peak oil”.

(iii) Today intensifying global climate change due to high rates of anthropogenic “greenhouse-gas” emissions mainly through burning fossil fuels and deforestation.

(iv) Today huge and still growing global transport sector that is almost completely dependent on fossil fuels.

Search for solutions: Agrofuels as “magic bullet”

(i) Seemingly allows “us” to keep our current way of life (especially a certain pattern of consumption -- McMichael’s “tip of the iceberg”), without having to change any of the fundamental conditions that it requires (especially production and distribution patterns -- McMichael’s “ultimate inconvenient truth”).

(ii) Worth stressing that human use of plants (and trees) for heating, cooking, light and ritual goes back millenia and many people and societies still do this to varying degrees; but what we are talking about here today is very different -- e.g., plants produced on a large-scale through mono-cropping for conversion into fuel for all kinds of transport especially in the global North.

Who are the Key Actors driving agrofuels policy?

Key Actor 1 -- Government field(i) Enacting specific policy measures (subsidies, mandatory targets etc.).

(ii) Creating opportunities for big pro-AF interests to shape policy (e.g., BIOFRAC and EBFTP in EU).

(iii) Other ways promoting: Financing, Brokering energy supply deals, Facilitating corporate land acquisitions, Promoting market-oriented land policies (including bilateral and multilateral institutions).

(iv) Northern and Southern Governments implicated -- North-South, South-North, and South-South (our three case studies -- Germany, Brazil, Mozambique -- help to illustrate this point).

Key Actor 2 -- Business field(i) In the North and South, numerous corporate business interests and sectors and each with their own reasoning -- oil and auto, biotechnology and biofuels, forest products and big farming, and the financial sector (private banks and credit agencies etc), as well as academe.

(iii) In European context -- EBFTP (permanent body mandated to assist and coordinate the European Commission’s work on biofuels)

Some conceptual tools:

(i) “fields of action”

(ii) “arenas of action”

(iii) “global integrated biofuels network”

(iv) “friction”

EBFTP Steering Committee (Sources: EBFTP website and CEO 2007)

Member Position Organisation Sector

Veronique Hervouet Chair TOTAL SA Oil

Markku Karlsson Vice-Chair UPM-Kymmene Forest Products

Anders Roj Vice-Chair Volvo Technology Auto

Rene van Ree Vice-Chair Wageningen University & Research Centre Academe

Ricardo Arjona Antolin Member ABENGOA Bioenergy Biofuels

Olivier Appert Member IFP Biotech

Phil Bowen Member Cardiff University Academe

Luis Cabra Member Repsol YPF, SA Oil

Dirk Carrez Member EUROPABIO Biotech

Raffaello Garofalo Member European Biodiesel Board Biofuels

Martha Heitzman Member Air Liquide Biotech

Dietrich Klein Member COPA-COGECA Farmers

Andrzej Kulczycki Member Institute for Fuels & Renewable Energy Biofuels

Charles Nielsen Member DONG Energy Oil

Ulrich Schurr Member Julich Research Center, Institute for Phytosphere Research Biotech

Steen Skjold-Jorgensen Member Novozymes North America Inc. Biotech

Wolfgang Steiger Member Volkswagen AG Wolfsburg Auto

Harri Turpeinen Member Neste Oil Oil

Gianpetro Venturi Member Universita di Bologna Academe

EU Policy Arguments (document analysis)

Three main arguments in favour of AF(i) GHG (carbon) savings(ii) Energy security (mainly security of supply) (iii) Rural development

But their relative importance has shifted over time(i) Used to be carbon savings …(ii) ... Today is EU energy security! (iii) RD argument has been reframed to make shift in where AF sourced (EU->GS)

Highlights of 2008 Energy Package (i) By 2020 20% of all energy used in the EU has to come from ‘renewable sources’ including biomass, bioliquids and biogas. Different targets for different Member States. Introduces ‘indicative trajectory’ where individual Member States must show they are increasing use of renewables over every 2-year period.

(ii) By 2020 each Member State must ensure that 10% of total road transport fuel comes from ‘renewables’ (defined as biofuels, biogas + hydrogen and electricity from renewable energy). Most expected to come from biofuels, no provisions that the 10% target will be reviewed at any time.

(iii) Includes very small list of purely environmental ‘sustainability standards’. No social or basic human rights standards. Most environmental aspects are ignored. No genuine verification scheme. Compliance will be assessed based on company information, voluntary certification schemes, existence of bilat/multilt agreeements.

Source: Biofuelwatch 2008

EU Policy Assumptions on Carbon savingsAF produced either in North or South can contribute to carbon-savings by replacing FF in transport sector (although amount of savings depends on factors that can be identified and therefore managed).

What constitutes appropriate or acceptable amount of carbon savings is determined by scientific-technical measurement of AF compared to FF.

> comments: arbitrary (35%) benchmark; ILUC ignored

Whether or not required rate of carbon-savings is achieved depends on: selection of crops; degree of technological innovation in production & processing; proper environmental management (re: location).

> comments: first- vs. next-generation biofuels (standard crops vs. GM crops -- Levidow&Paul)

Whatever important environmental risks AF pose for fragile diverse ecosystems can be managed through adherence to some measurable and enforceable standards.

> comments: voluntary compliance

EU Policy Assumptions on Energy SecurityAF will enhance (EU) energy security by diversifying supply beyond FF in an era of peak oil, political instability of oil-producing states, expensive oil.What constitutes “energy security” is defined by existing and future (expanding) EU transport sector, and has to do with securing the required large volume and stable supply.

AFs are the ideal type from this perspective: compared to FF, AF are considered renewable and seen as able to be grown virtually anywhere & anytime.

> comment: but not enough land in Europe!

EU market for AF needs to be created because, currently, AF cannot compete with FF (cost per liter + of re-tooling existing vehicles to be able to take AF).Tropical countries in Global South are ideal source: “resource-rich”, most especially in terms of land.

> comment: “idle” & “marginal” land -- Does it really exist? Do companies really want to locate “there” even if it exists?

European AF market can be created through incentives, subsidies, targets; AF imports can be “secured” through various mechanisms (JVAs, FDIs, ODA, bilat/multilat agreements).

EU Policy Assumptions on Rural DevelopmentAF will spur rural development by invigorating livelihoods, creating new jobs, diversifying incomes in both global North and South, including countries where rural poverty is most entrenched.What constitutes “rural development” is defined in economic outcome terms, primarily incomes. Rural populations will be incorporated into “bio-fuelled” development as labourers in large-scale monocropping production systems.

> comment: interest in integrating small producers (mainly through contract-growing schemes, but not necessarily the terms of integration)

Other kinds of “measures” (e.g., social, cultural, political-process oriented ones) of well-being are implicitly seen as unimportant or irrelevant.

> comment: undesirable effects can be mitigated or prevented by (voluntary) adherence to various standards and by instituting “community consultation” mechanisms. Whether or not “RD” is achieved will depend on orienting various tools (JVA, FDI, ODA etc) to help bring large-scale industrial AF production units and enterprises on-line to target countries and to tie them into the emerging GIBN. Problems, issues, needs, concerns (PINCs) and can be anticipated and addressed through standards (but possibility of alternative “worldviews” and cosmologies is ignored).

> comment: but relatively little thought here, including on actual practice -- Determining standards? Enforcing compliance? Monitoring practices?

> perhaps it is assumed that these are the tasks of the hosting national governments (in many cases, a big assumption!)

ObservationsCentrality of land(I) policy assumptions about land in general

> underlying: 1-dimensional “thing” = economic asset> “availability” of large amounts in global South (and with

notion of “idle”, “degraded” and “marginal” land, it is further assumed much is available with no risk to “food security”)

(ii) main concern in policy debate was the controversial issue of “ILUC” (and “IAE”) with regard to GHG emission-savings (e.g., whether to factor indirect land use changes and indirect annual emissions into calculations of GHG savings potential), though this is now ignored in the 2008 energy package.

(iii) in the larger public debate, increasing focus on question of “availability” of land, and questioning the validity of the concepts being deployed to convince that there are vast amounts (thanks to some of the organisations and networks represented here).

More observationsEU BF Policy -- Important “Silences”(I) impact of AF promotion/ expansion on LPR

> LPR = land property relations (land = social relationships, often complex)

> IIED table is a useful start ()

(ii) impact of AF promotion/ expansion on LPE (Table 7, p.21):> LPE = local political economy

> who owns what?> who does what?> who gets what?

> where does surplus/ profit go?

(iii) basic issue of development decision-making> especially at level of communities most affected

> who gets to decide before it happens? (if)> who gets to decide how it happens? (terms & conditions)> who gets to decide why it happens? (purposes)

Conceptual links: Biofuels expansion and land access

QuickTime™ and a decompressor

are needed to see this picture.

Source: IIED (Fuelling Exclusion) 2008: 17

Understandings of the Environment and Sustainability

This is still the least developed part of our paper so far.

But our basic proposition is that the EU debate on AF reveals several competing views (held by different kinds of actors) on the environment and on what sustainability means.

To make sense of these for purposes of comparison, we’ve conceptualised them as broadly distinct “frameworks” and tried to think through what each seems to say, offer or stand for in terms of particular comparable elements (e.g., overall frame, problem definition, concept of nature, what is to be sustained, economic aims, proposed solution, and expertise.

Table 9. Sustainability FrameworksAround Energy Security Issue /Table 9a.doc

Around GHG Savings Issue /Table 9b.doc

Table 9a: Sustainability Frameworks-Energy Security Energy Security Argument

Led by Oil, Biotech, car industries

OECD governments EC

Framing Market-driven push favouring substitutes for gasoline and diesel

Promotion of diversified sources of energy crops into a geopolitical strategy

Promotion of diversified sources of energy crops into a geopolitical strategy

Problem Definition

Increasing vulnerability to supply disruptions and prices shocks

Increased dependence on oil producing countries

High import dependence for both oil and other raw materials and increasing competence of emerging economies

Concept of nature

Society-nature relations reduced to a set of market-relations

Nature as an asset to be protected, resources to be used efficiently

Nature as an economic asset

What is to be sustained?

Economic growth and competitiveness

Competitive advantage over access to resources in third countries; consumption levels

EU competitive advantage over access to resources in third countries, consumption levels

Economic aims Green business Creation of an agrofuels market.

Creation of an agrofuels market to secure supply

Solution No need to internalise externalities into prices

Externalities are brought to the market

Measures to secure and improve access to raw material for the EU industry.

Table 9.b Sustainability Frameworks-GHG Savings GHG Savings Argument

Led by Peasant/ Environmental justice activists

Government Agencies in the North

Multinationals, and some elites and governments in the South

Sustainable Developments Framing

Community / environmental justice

Environmental Management/ Ecological modernization

Neo-liberal eco-efficiency

Problem Definition

Climate change is happening: harmonious balance to be maintained, historical claim for renewables.

Need to reconcile economic growth and market competitiveness with environmental protection to increase carrying capacity.

Need of resource efficiency to prevent depletion of environmental capital. Trade in environmental goods (green commodities) as a potential market to expand.

Concept of nature

Commons to be protected and shared

Existence of a human habitat, and an ecological support system, assets providing services (livelihoods approach)

Nature as capital to be invested and privatised,

What is to be sustained?

Communities, beneficiaries of commons

Optimum rational resource usage

Competitiveness, efficiency, productivity, Profitability

Economic aims Livelihoods, food and energy security/sovereignty

Economic growth through socio-technical organisations and

Competitiveness in global market for green commodities

Solution Solidarity, democratic political processes,sovereignty

Rules and standards to be negotiated

Eco-efficiency

Expertise Local resources and knowledge

Identification and control of negative impacts

Research and development of clean products

Social & Environmental Impacts Case study method will be used to compare EU policy assumptions with actual impacts (and I leave it to my colleagues’ presentations to elaborate further)Logic of case selection

Particular location in AF debateTheir interconnections Particular country profile more generally

Germany, Brazil, Mozambique: previewGermany

Leading producer & consumer in Europe (biodiesel); Global North (EU),urban- industrialised, tiny rural population;Special historical role in pushing for higher AF targets;

Brazil Major producer, consumer & exporter (bioethanol);Global South (LatAm), urban-industrialised, but with large agricultural sector,and still with large rural population and still extremely inequitable distribution of land; special global environmental importance of Amazon region.

MozambiqueEmerging producer & exporter to Europe (mainly jatropha);Global South (SADC), predominantly agrarian, majority rural population, majority rural poor with extremely limited rural electrification, and pre-existing relatively good Land Law (on paper).

The End

Thanks for listening

Comments welcome!