Biofuels and Certification

A Workshop at the Harvard Kennedy School of Government

Summary

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.