Project of labels for sustainable biofuels

General situation worldwide

Long seen as the solution of choice for substituting of fossil fuels and reducing greenhouse gas (GHG) emissions in the transportation sector, biofuels are now facing criticism [1] from international organizations (World Bank UN, OECD) and non-governmental organizations (Oxfam, Swissaid, Alliance Sud, etc.). Repeatedly, biofuels are accused of being the main cause of rising food prices, world food crisis and deforestation in South America or South-East Asia. Biofuels are also associated with excessive water consumption. Even the initial motivations of biofuels development (incl. GHG balance and global ecological balance) are now being questioned more and more [2].

Concerned with the promotion of only the most environmentally friendly biofuels, several governments are currently working on setting up a regulatory framework focusing on sustainable biofuels. These include the United Kingdom [3], the Netherlands [4], Germany [5], the European Union [6] (EU), the state of California [7] in the USA, but also Switzerland [8].

Situation in the European Union

On 23 January 2008, the European Commission put forth an integrated proposal for Climate Action, including a Directive on the promotion of the use of renewable energy sources. The Directive was eventually adopted by the European Parliament on 17 December 2008. Amongst other targets, the Directive defines a target of 10% share of renewable energy (incl. biofuels) in the EU transport sector by 2020.

According to the directive proposal, biofuels must not be promoted unless they are produced in a sustainable way. The Directive therefore sets out stringent environmental sustainability criteria to ensure that biofuels that are to count towards the European targets and benefit from possible tax reduction within Member States are sustainable and that they are not in conflict with overall environmental goals.

Environmental sustainability criteria for biofuels according to the EC Directive proposal are as follows:

• greenhouse gas (GHG) emission savings from the use of biofuels shall be at least 35%
• biofuels shall not be produced from raw materials obtained from land with high biodiversity, i.e. forest undisturbed by significant human activity, areas designated for nature protection purposes or highly biodiverse grassland
• biofuels shall not be produced from raw material obtained from land with high carbon stock, i.e. wetlands (land that is covered with or saturated by water permanently or for a significant part of the year) or continuously forested areas
• agricultural raw materials cultivated in the Community and used for the production of biofuels shall comply with minimum requirements for good agricultural and environmental condition defined in EU Regulation

With effect from 2017, the GHG emission saving from the use of biofuels shall be 50%. After 2017, the reduction shall be 60% for biofuels produced in installations whose production started from 2017 onwards.

Regarding social criteria, the Commission shall report every two years to the European Parliament and the Council on the impact on social sustainability in the Community and in third countries of increased demand for biofuel, and on the impact of EU biofuel policy on the availability of foodstuffs at affordable prices, in particular for people living in developing countries, and wider development issues. Reports shall address the respect of land use rights. They shall state whether the producing country has ratified and implemented the Conventions of the International Labour Organisation.

Situation in Switzerland

So far limited to a few thousand tons per year (3.2 kt/yr bioethanol and 11.5 kt/yr biodiesel) for both technical and legal reasons, biofuels in Switzerland could be subject to a significant development in the years to come, with the recent entry into force (1st July 2008) of the new Ordinance on the taxation of mineral oil (Oimpmin) [8]. The latter defines the bases for biofuels tax exemption under specific constraints regarding environmental and social conditions of production. The purpose of the new regulatory framework is to promote environmentally friendly fuels with the aim of reducing CO2 emissions and air pollution in road transportation.

According to the new Ordinance on mineral oil taxation, producers and importers of biofuels wishing to benefit from tax exemption must bring the proof of "positive global ecological balance" and "socially acceptable production conditions".

The minimum requirements for a positive global ecological balance are met if:

• biofuels generate at least 40% less GHG emissions compared to gasoline
• biofuels do not damage the environment in a way significantly higher than gasoline
• raw materials for biofuels do not endanger tropical forest conservation or biological diversity

The minimum requirements are considered to be fulfilled in all cases for fuels manufactured in accordance with the latest technologies from waste or biogenic residues from the production or processing of forestry and agricultural products.

The minimum requirements for "socially acceptable" production conditions are met if, social legislation applicable at the location of production or at least the fundamental conventions of the International Labour Organization (ILO) have been met for the production of both raw materials and fuels.

The DETEC [9] indicates the modalities of proof in the Ordinance on the life-cycle assessment of fuels (OEcobiC) which entereg into force on 15 April 2009. The authority responsible for reviewing compliance with the requirements for the ecological balance is the FOEN [10].