Biofuels: A Solution for the Developing World?

What is the potential for biofuels to help meet the world's energy needs, protect the environment, and advance the livelihoods of farmers and other land users around the world? Participants of a workshop organized by the Belfer Center's Environment and Natural Resources Program (ENRP) and Harvard Kennedy School's Sustainability Science Program discussed these questions as they addressed the goals of a sustainable biofuel industry in developing countries and the role of certification processes in attaining these goals. The two-day event in late spring attracted more than 20 leading experts from around the world, representing academia, business, and government.

"In the next few years, both the United States and Europe will endorse environmental sustainability standards that biofuels must reach to be certified as renewable fuels," said Henry Lee, director of ENRP. "If governments do not require reductions in direct emissions of carbon, they will undercut their biofuel mandates, but if they become overly ambitious and include a wide menu of standards dictating land and water uses as well as social goals, they may seriously undermine the potential for biofuel production in the developing world."

A report on the workshop, produced by Lee and Charan Devereaux and titled, "Biofuels and Certification," looks at the issues involved in mandating the use of biofuels for a particular percentage of transportation fuels, and in particular, the process of certifying whether the biofuels meet clear standards.

The executive summary notes the following:

Liquid biofuels can provide a substitute for fossil fuels in the transportation sector. Many countries have mandated the use of biofuels, by creating targets for their use. If not implemented with care, however, actions that increase biofuel production can put upward pressure on food prices, increase greenhouse gas (GHG) emissions, and exacerbate degradation of land, forest, and water sources. A strong global biofuels industry will not emerge unless these environmental and social concerns are addressed.

Interested parties around the world are actively debating the design and implementation of policies to meet the biofuel goals, particularly those established in the United States and Europe. In general, policy options for managing the potential risks and benefits of biofuel development should specify not only clear standards governing biofuel content and production processes, but also certification processes for verifying whether particular biofuels meet those standards, and specific metrics or indicators on which to base the certification. Historically, many standards in the energy and environment fields have ultimately been set or supported by governments. Many of the certification processes have been voluntary, carried out by independent third parties. The biofuels case is a young one, however, with questions of goals, standards, certification, and metrics still in interdependent flux. The workshop focused its discussions on certification issues, but found the discussions naturally reaching into ongoing debates regarding possible goals, standards, and metrics.

Many countries are proposing that for a biofuel to qualify as contributing to government-mandated targets or goals, it must be certified to meet certain standards. These standards could be limited to the amount of GHG emitted in the production process or could include a number of other environmental sustainability concerns ranging from deforestation and biodiversity to water resources. While the threat to both forests and food supplies from increased biofuel production is real, it is not clear that setting broad sustainability standards and then requiring sellers to certify that all of those standards have been met is the best way to address these interconnected problems. In particular, if too many standards and related certification requirements are put in place too soon, this could constrain the development of a global biofuels market. In contrast, certification targeted at a specific and limited set of problems and designed with the flexibility to adjust to changes in policies and programs can enhance the public's acceptance of the biofuel option while protecting key social and environmental goals.

A second set of questions revolves around the locus of responsibility for certifying whether biofuel production meets sustainability targets. Should the biofuel processing firms, third parties, or governments be responsible for certifying the production of biofuels? This question also elicited significant discussion. While it could be easier to have individual country governments assume the certification of production responsibility, some governments may not have the capacity to implement an effective certification process. Production facilities that comply with international standards should not be kept out of the market because of their government's inability to manage the process. The possible contribution to effective certification of third party organizations or public-private partnerships should not be underestimated.

The complete report can be accessed at: http://belfercenter.org/biofuelsandcertification