Towards Sustainability of Biomass Importation : An Assessment of the EU Renewable Energy Directive 9789089521552, 9789089521521

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Towards Sustainability of Biomass Importation An Assessment of the EU Renewable Energy Directive Andrea Schmeichel

Europa Law Publishing

Towards Sustainability of Biomass Importation

Europa Law Publishing, Groningen 2014

Towards Sustainability of Biomass Importation An Assessment of the EU Renewable Energy Directive Andrea Schmeichel

Europa Law Publishing is a publishing company specializing in European Union law, international trade law, public international law, environmental law and comparative national law. For further information please contact Europa Law Publishing via email: [email protected] or visit our website at: www.europalawpublishing.com. All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, or stored in any retrieval system of any nature, without the written permission of the publisher. Application for permission for use of copyright material shall be made to the publishers. Full acknowledgement of author, publisher and source must be given. Voor zover het maken van kopieën uit deze uitgave is toegestaan op grond van artikel 16h t/m 16m Auteurswet 1912 juncto het Besluit van 27 november 2002, Stb. 575, dient men de daarvoor wettelijk verschuldigde vergoedingen te voldoen aan de Stichting Reprorecht (Postbus 3060, 2130 KB Hoofddorp). Voor het overnemen van (een) gedeelte(n) uit deze uitgave in bloemlezingen, readers en andere compilatiewerken (artikel 16 Auteurswet 1912) dient men zich tot de uitgever te wenden. © Europa Law Publishing, Andrea Schmeichel, 2014 Typeset in Scala and Scala Sans, Graphic design by G2K Designers, Groningen/Amsterdam NUR 828; ISBN 978-90-8952-155-2

Acknowledgements I am incredibly grateful to the many people who have accompanied me during the writing of this thesis, both personally and professionally. I’d like to thank my supervisor Prof. Gerd Winter who agreed to take on both me and this topic and who gave me lots of things to think about. I am grateful for the support from my supervisor Prof. Sabine Schlacke, especially around the conference of the German Association of Environmental Law (GfU). I thank Prof. Felix Ekardt for bringing me to the University of Bremen and giving me the opportunity to work on an advisory project for the German Federal Ministry for the Environment, Nature Protection and Nuclear Safety (BMU) on the market integration of renewable energy, from which this topic derives. I’d like to thank the University Bremen for awarding me a scholarship. I am very grateful to all the individuals who have generously provided their time and experience as interview partners; their input was invaluable. I wish to thank my colleagues at the Research Centre for European Environmental Law (FEU) at Bremen University for their support, and to the Ph.D. students I have met at environmental law conferences for both interesting discussions and moral support. Thanks also go to Max, through good times and bad, and to my parents!

v

Methodology The topic for this study evolved out of an advisory project for the German Federal Ministry for the Environment, Nature Protection and Nuclear Safety at the Research Centre for European Environmental Law at Bremen University on the market integration of renewable energy. This text is an abbreviated version of a Dr. Jur. thesis submitted in Bremen University, Germany. The original work included case studies on Indonesia and Germany as well as a more detailed discussion of the international law and certification systems. The book investigates the current state of the law, notably Art. 17 to 19 Renewable Energy Directive 2009/28/EC, taking into account the available jurisprudence and academic literature. To relate this overview to practice, qualitative research has been undertaken through semi-structured interviews. The interviews conducted are not intended to be representative for the entire sector, but show a snapshot of the work at a range of organisations, from the view and experience of the interviewees. Several experts from different industries were interviewed, from public authorities to certification systems, certification bodies, environmental NGOs to energy producers. These interviews were conducted in confidence, and are reported here in aggregate or in anonymised form.1 Quantitative surveys could not be conducted due to limited resources.

1

See Gläser, J. and Laudel, G., Experteninterviews und qualitative Inhaltsanalyse, 4th ed. (Wiesbaden: Verlag für Sozialwissenschaften, 2010), 55 foll., 279 foll.

vi

contents

Contents List of Abbreviations Glossary

vii xiv xviii

Introduction part

i

chapter 1



Foundations The Regulatory Challenge of Bioenergy

1.1 Biomass for energy 1.1.1 Terminology 1.1.1.1 Biomass 1.1.1.2 Bioenergy 1.1.1.3 Biofuel and bioliquid 1.1.2 Advantages of bioenergy use 1.1.3 The European renewable energy targets and the necessity of imports 1.1.4 Summary 1.2 Interests to be balanced in climate change mitigation 1.2.1 The notion of climate 1.2.2 The environmental integrity of climate change mitigation 1.2.2.1 Conflicting environmental concerns 1.2.2.2 Positive effects of climate change mitigation 1.2.2.3 Adverse effects of climate change mitigation 1.2.2.3.1 Degradation 1.2.2.3.2 Land use changes and fragmentation 1.2.3 Socio-economic impacts of bioenergy 1.2.3.1 Bioenergy for economic development 1.2.3.2 Adverse effects 1.2.4 The specific situation of exporting countries 1.2.5 Conclusion 1.3 Introduction to the sustainability criteria 1.3.1 Legislative procedure and legal basis 1.3.2 Scope and legal consequences 1.3.3 GHG emission balance 1.3.3.1 Greenhouse gas emission savings 1.3.3.2 The exclusion of carbon sinks 1.3.4 The exclusion of biodiverse areas 1.3.5 Agricultural standards 1.3.6 Compliance 1.3.7 Reporting requirements and reform 1.3.7.1 Reporting requirements the scope of the sustainability criteria 1.3.7.2 Reporting requirements relating to Art. 17 (2) to (6) RED

vii

11 11 11 12 12 13 14 17 18 18 19 19 22 23 23 24 24 24 25 26 29 30 31 32 33 33 34 34 35 35 36 36 36

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1.3.7.3 Reporting requirements relating to socio-economic impacts 37 1.3.8 Summary 39

part ii The European Sustainability Criteria chapter 2



chapter 3





47 47 47 49 50 51 51 52 52 54 55 59

The Greenhouse Gas Emission Balance

3.1 The level of greenhouse gas emission savings 3.1.1 The benchmark 3.1.2 The fossil fuel comparator 3.2 The calculation of the GHG balance 3.2.1 Life cycle assessment 3.2.1.1 The life cycle 3.2.1.2 The calculation pathways 3.2.1.3 Default values and disaggregated default values 3.2.1.4 Adaptation to technical and scientific progress 3.2.2 Major issues and uncertainties 3.2.2.1 Land carbon stocks and land conversions 3.2.2.1.1 Direct land use changes 3.2.2.1.2 Indirect land use changes 3.2.2.2 Emissions from agriculture 3.2.3 Reduction of the pressure on land 3.3 Analysis

chapter 4



Scope of Application

2.1 Types of bioenergy 2.1.1 Imported and domestic 2.1.2 Biofuels and bioliquids 2.1.3 The exclusion of solid and gaseous bioenergy 2.1.4 The exemption of waste and residue 2.2 The twofold incentive for compliance 2.2.1 National renewable energy targets 2.2.2 Selected support schemes 2.2.2.1 Member States’ national support schemes 2.2.2.2 Renewable energy obligations and selected financial support 2.2.2.3 The rationale for the limitation 2.3 Analysis

63 63 65 67 67 67 68 68 70 75 75 77 79 80 82 83

Direct Land Use Changes: No-Go Areas

4.1 Areas designated for nature conservation 4.1.1 Areas designated for nature protection purposes 4.1.2 Area designation at for the protection of rare, threatened or endangered ecosystems or species 4.1.2.1 International agreements, intergovernmental organisations and the IUCN 4.1.2.2 The conservation purpose viii

92 92 94 94 97

contents



4.1.2.3 The Commission decision 4.2 Forests 4.2.1 Primary forest 4.2.2 Continuously forested areas and woodland 4.3 Highly biodiverse grasslands 4.3.1 Grasslands 4.3.2 Natural or non-natural 4.3.3 Highly biodiverse 4.4 Wetlands & peatland 4.4.1 Wetlands for carbon storage 4.4.2 Peatland 4.5 The conditionality of area exclusions 4.6 The reference year 4.7 The identification of pertinent areas 4.7.1 Remote sensing 4.7.2 Plans, registries and databases 4.7.3 On-site assessment 4.7.4 Analysis 4.8 Analysis 4.8.1 The consistency of the no-go areas 4.8.2 Room for interpretation 4.8.3 Limitations of the ecosystem approach 4.8.3.1 Biodiversity and carbon stock beyond specified ecosystems 4.8.3.2 No limitation on arable land area 4.8.3.3 Quantitative requirements 4.8.4 Unresolved issues 4.8.4.1 Agricultural standards 4.8.4.2 Socio-economic issues

99 101 102 103 104 104 106 107 107 107 108 108 108 109 110 112 113 113 113 114 114 115 115 116 116 117 117 118

part iii Compliance Control chapter 5



Recognition Mechanism

5.1 The Commission decision 5.1.1 Bi- and multilateral agreements with third countries 5.1.2 Voluntary schemes 5.1.3 Requirements for recognition 5.1.3.1 Substantive standards 5.1.3.2 Compliance control 5.1.4 The decision-making process 5.1.5 The scope of the decision 5.1.6 Analysis 5.2 Member States’ implementation 5.3 The meta-standard approach 5.3.1 Practical advantages 5.3.2 Legitimacy ix

127 127 129 132 132 133 134 134 136 137 139 139 142

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5.3.2.1 Self-legitimation of certification systems 5.3.2.2 Legitimacy of certification systems through referral 5.3.3 Analysis

142 146 147

chapter 6 Introduction to Certification Systems Touching on

Biomass



6.1 Actors 6.2 Geographical application 6.3 The object of the standard 6.4 Governance structure of certification schemes 6.4.1 The distribution of membership 6.4.2 Types of membership and observers 6.4.3 Institutions 6.4.3.1 Plenary organ 6.4.3.2 The management board 6.4.3.3 Expert committees 6.5 The standard-setting process 6.6 Analysis

chapter 7





The Standards of Certification Systems

7.1 Principles and criteria 7.1.1 Scope of application 7.1.2 Compliance with national laws and regulations 7.1.3 GHG emissions 7.1.4 Environmental standards 7.1.4.1 Impact assessment and management practices 7.1.4.2 Excluding high conservation value areas 7.1.5 Impacts of agriculture 7.1.6 Socio-economic standards 7.1.7 Compliance requirements on operators 7.2 Chain of custody 7.3 Analysis

chapter 8

151 152 153 156 156 157 158 158 159 160 160 160

166 167 167 168 169 169 170 171 171 172 172 174

Certification as a Means of Compliance Control

8.1 Certification and product claims 8.2 The requirements on certification bodies 8.3 Requirements on auditors 8.4 The certification process and auditing 8.5 Analysis 8.5.1 The impact of the recognition process 8.5.2 Conformity assessment v. impact of certification systems

x

182 184 186 188 191 192 194

contents

part iv Compliance with Higher Ranking Law chapter 9



chapter 10



International Environmental Law

10.1 Contracting party: EU or Member States 226 10.2 The application of the sustainability criteria to imports 228 10.3 International energy law 229 10.4 The Convention on Biological Diversity 230 10.5 The Convention on Wetlands of International Importance 232 10.6 Hybrid goals: the International Tropical Timber Organisation235 10.7 The climate change regime 236 10.8 Conclusion 241

chapter 11



Compliance with European Law

9.1 The legal basis 204 9.1.1 The potential legal bases 204 9.1.1.1 The environmental competence 205 9.1.1.2 Harmonisation of the Internal Market 205 9.1.2 The choice of legal basis 206 9.1.2.1 T he relationship between Art. 114 TFEU and Art. 192 TFEU 207 9.1.2.2 The main object 208 9.1.2.3 A double legal basis 209 9.1.3 Subsidiarity and proportionality 209 9.1.4 Conclusion 210 9.2 A high level of environmental protection 211 9.2.1 Definition 211 9.2.2 Tools in determining the level of protection 213 9.2.2.1 Recurrence to the available scientific and technical data 213 9.2.2.2 T he precautionary principle 214 9.2.2.3 The objective of sustainable development 216 9.2.2.4 Art. 37 Charter of Fundamental Rights of the European Union 216 9.2.3 The effort required 218 9.2.4 Conclusion 218 9.3 Opting up 219 9.3.1 Applicability 220 9.3.2 Conditions for more stringent national criteria 220 9.3.3 Conclusion 222

11.1 11.1.1 11.1.2 11.2 11.2.1

Compliance with World Trade Law The subsidies regime Agreement on Agriculture Agreement on Subsidies and Countervailing Measures The General Agreement on Tariffs and Trade Internal measure or import regulation

xi

245 246 247 247 247

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11.2.2 “like product” 248 11.2.3 No less favourable treatment 250 11.2.4 Justification under Art. XX GATT 252 11.2.4.1 A measure necessary for the protection of human, animal or plant life or health 252 11.2.4.2 The conservation of exhaustible natural resources 254 11.2.4.3 Chapeau 256 11.3 The Agreement on Technical Barriers to Trade 258 11.3.1 Application next to GATT 258 11.3.2 Technical regulation and conformity assessment 259 11.3.2.1 nprPPM as technical measures 259 11.3.2.2 Regulation or standard 260 11.3.3 No less favourable treatment of like products 260 11.3.4 Legitimate objectives under Art. 2.2 TBT-Agreement 262 11.4 Conclusion 263 part v Conclusions chapter 12



The Impact of the Sustainability Criteria

12.1 The need for integration 12.2 The environmental integrity of imports 12.2.1 The GHG balance 12.2.2 Biodiversity in resource states 12.2.3 Open issues 12.2.4 The issue of leakage 12.3 The interaction with transnational law 12.3.1 Certification and third countries 12.3.2 Benefits of the recognition mechanism 12.3.3 Fragmentation and harmonisation 12.4 Sustainability criteria and trade 12.5 The way ahead



Bibliography Table of Cases Table of Legislation and Other Regulatory Instruments Summary

xii

269 271 271 272 274 274 277 277 278 279 280 280 284 310 314 326

List of Abbreviations

towards sustainability of biomass importation

2BSvs Biomass Biofuels Sustainability voluntary scheme AMS Aggregate Measurement of Support AoA Agreement on Agriculture Art.Article ASEAN Association of Southeast Asian Nations BGBl. Bundesgesetzblatt (Official Journal of the Federal Republic of Germany) BSI Better Sugarcane Initiative BtLBiomass-to-Liquid CBD Convention on Biological Diversity CDM Clean Development Mechanism CER Certified Emission Reduction CFI Court of First Instance CH4Methane CHP Combined Heat and Power CIFOR Centre for International Forestry Research CITES Convention on International Trade in Endangered Species CO2 Carbon dioxide CO2eq Carbon dioxide equivalent COP Conference of the Parties COP/MOP Conference of Parties serving as Meeting of Parties (also CMP) CPO Crude palm oil EC European Community ECJ European Court of Justice Ed.Editor EEA European Environmental Agency EEG Erneuerbare-Energien-Gesetz (German Renewable Energy Act) EGC European General Court EU European Union FAO Food and Agriculture Organisation FLEGT Forest Law Enforcement, Governance and Trade FQD Fuel Quality Directive FSC Forest Stewardship Council Ggram GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product GGL Green Gold Label GHG Greenhouse gas(es) GSP Generalised System of Preferences Ha hectare (104 m2) HCV High Conservation Value HS Harmonised Commodity Description and Coding System IAF International Accreditation Forum ICJ International Court of Justice

xiv

abbreviations

IEA International Energy Agency ILO International Labour Organisation IPCC Intergovernmental Panel on Climate Change IRENA International Renewable Energy Agency ISCC International Sustainability & Carbon Certification ISEAL International Social and Environmental Accreditation and Labelling Alliance ISO International Organisation for Standardisation ITTO International Tropical Timber Organisation IUCN International Union for Conservation of Nature JRC Joint Research Centre KP Kyoto Protocol LCA Life cycle assessment Mmetre MLA Multilateral recognition agreement MOP Meeting of Parties Mtoe Megatons of oil equivalent N2O Nitrous oxide NGO Non-governmental Organisation Npr Non product related NTB Non-tariffary boundary OECD Organisation for Economic Co-operation and Development OJ Official Journal of the European Union PJPetajoule PP Perturan Pemerintah (Indonesian Regulation) PPM Process and production method(s) RBSA Abengoa Bioenergy Sustainability Assurance RED Renewable Energy Directive RFS Renewable Fuel Standard RSB Roundtable on Sustainable Biofuels RSPO Roundtable on Sustainable Palm Oil RTRS Roundtable on Responsible Soy s.Section SAN Sustainable Agriculture Network SBSTTASubsidiary Body on Scientific, Technical and Technological Advice SCM-Agreement Agreement on Subsidies and Countervailing Measures tTon TEC Treaty establishing the European Community TEU Treaty on European Union TFEU Treaty on the Functioning of the European Union TREM Trade related environmental measure UN United Nations UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change

xv

towards sustainability of biomass importation

UNFF UU VCLT W WTO

xvi

United Nations Forum on Forests Undang-Undang (Indonesian Legislative Act) Vienna Convention on the Law of Treaties Watt (unit of power) World Trade Organisation

Glossary

towards sustainability of biomass importation

The terminology in the area of bioenergy differs considerably in different contexts. The terms are often very similar so that the most important – and most easily confused – notions are summarised here. This list is not intended to be exhaustive. Unless specified otherwise in the text, the following terms are used as detailed below: Auditing Evaluation of a person, product or process Bioenergy energy from biomass Biofuel liquid or gaseous energy produced from biomass for the transport sector Bioliquid liquid energy produced from biomass for electricity and heating and cooling Biomass the entire phyto- and zoomass Certificate Document serving as proof that an economic operator complies with certain standards, in this case the sustainability criteria, to be distinguished from proof of compliance Certification body Entities assessing the compliance of economic operators with a set of standards through auditing and issue certificates Certification system Organisation setting up standards for certain products and methods to show compliance through certification, also certification scheme Chain of custody Documentation showing the transmission of a product between different actors, insuring traceability GHG emission balance Measure of emission of greenhouse gases No-go areaArea excluded from the cultivation or harvest of biomass for the production of biofuels and bioliquids

xviii

glossary

Principles and Criteria Substantial standards of voluntary standard schemes, in particular certification systems, accompanied by indicators and guidance Proof of compliance Document issued for a contingent of biomass, biofuel or bioliquid to show compliance with the sustainability criteria, to be distinguished from the guarantee of origin, certifying that a contingent of energy stems from renewable sources

xix

Introduction

introduction

The mitigation of and adaptation to anthropogenic climate change presents one of the greatest challenges of our time. Rising temperatures will substantially change landscapes and ecosystems. Rising sea levels, increased risks of droughts and floods, stronger storms will substantially alter the living conditions of humans and wildlife, potentially making it unliveable.1 Accordingly, climate change therefore affects the very core of life on Earth. International, European and national law have introduced instruments to tackle climate change, introducing a new legal branch of “climate law”. Many of these instruments, such as emission trading, are preoccupied with the limitation of emissions in the interests of climate change mitigation. Renewable energy goes further, providing an alternative to increasingly scarce and expensive fossil fuels. Accordingly, it not only contributes to climate change mitigation, but constitutes an alternative energy supply that is available instead of the finite fossil resources. The use of energy from renewable sources, wind, water, sun, geothermal, and biomass is thus not only an opportunity, but in fact a necessary instrument when seeking the preservation of living standards and living conditions as they are today. Among renewable energy sources, bioenergy is currently widely used and accordingly plays a major role in the mitigation of climate change. However, the use of biomass for energy is not without conflict. In fact, the introduction of climate change mitigation measures adds another opportunity for conflict between laws related to environmental concerns. Classically, environmental measures for climate change mitigation and other environmental concerns have been seen as an obstacle to trade liberalisation, as countries may introduce protectionist measures under the guise of environmental standards. However, not only can environmental measures be considered as a threat to free trade, but conversely, trade liberalisation can also constitute a threat to environmental protection.2 Whereas free trade can lead to the dissemination of good environmental practices, the transfer of clean technologies, and increased efficiency and therefore a more efficient use of resources,3 there is a risk that industries relocate to countries with the lowest environmental standards. Even though company decisions on relocation are driven by a number of factors, if regulators fear that industries will leave, they may not enhance environmental 1

IPCC. “Climate Change 2007: impacts, adaptation and vulnerability - Working Group II contribution to the Fourth Assessment Report.” Cambridge, New York: Cambridge University Press, 2007.

2

Frankel, J. A. “The environment and globalisation.” Chap. 19 In Economics of the environment, edited by Stavins, R. N., 361-398. New York, London: W.W. Norton & Company, 2005, 371 foll.

3

WTO Committee on Trade and Environment (CTE). “Environmental benefits of removing trade restrictions and distortions.” Geneva: WTO, 1997; WTO Secretariat. “Trade and environment at the WTO.” Geneva: WTO, 2004, 23.; Exporters may find it more efficient to manufacture one environmentally friendly version of a product rather than creating multiple product lines to take advantage of weaker standards in some countries (California effect) Vogel, D., Trading up: consumer and environmental regulation in a global economy (Cambridge: Harvard University Press, 1995), 248-270.

3

towards sustainability of biomass importation

protection, leading to a ‘race to the bottom.’4 Many of these arguments are also valid for the emerging intra-environmental conflict. This new conflict between climate change mitigation and other environmental concerns stands next to but also interacts with the conflict between environmental concerns and trade liberalisation. As with trade liberalisation, the environmental integrity of the different instruments can be called into question. This shall be exemplified by the use of biomass for energy. With the advent of modern bioenergy, the demand for the very versatile biomass – also used as food and feed, or as building material – increases further. Accordingly, either the available biomass must be increased, or the already available biomass must be redistributed. This creates conflicts with several other aspects of environmental protection but also socio-economic concerns. The expansion of agriculture takes two forms: agriculture is conducted more intensively and more extensively. The intensification of agriculture may lead to a degradation of soils and water. The extensification of agriculture induces land use changes. These can be either direct or indirect. Direct land use changes occur where agriculture for bioenergy production moves into natural or near-natural habitats, thus destroying biodiversity – one of the values climate change mitigation is intended to protect. Land use changes can also be indirect, where an area already used for agriculture (for example for food and feed) is reassigned for biomass production for bioenergy. The previous use then moves into other areas, including natural or near natural habitats. Besides the environmental effects, this expansion may also come into conflict with property rights of indigenous people, a phenomenon often described as land grabbing. Where the availability of biomass is not increased and trade streams are redirected towards a use of biomass for energy, climate change mitigation policy comes into direct conflict with the need to use biomass for food and feed. Besides, an increasing agriculture for bioenergy is also feared to negatively affect workers’ rights, working and living conditions in the affected areas. Accordingly, the negative impacts of the use of biomass for energy may be considerable. In fact, climate change mitigation policies may in practice harm the very values they were created to protect: living standards and living conditions that are directly linked to environmental concerns. Thus, climate change mitigation, like free trade, cannot be considered an absolute goal to be pursued without limits. Rather, a regulatory framework is necessary that balances climate change mitigation measures with other environmental concerns. Thus, a policy has to be created (environmental integrity) 4

Even though there is little evidence for relocation to pollution havens, see Cole, M. A., Elliott, R. J., and Shimamoto, K., “Why the grass is not always greener: the competing effects of environmental regulations and factor intensities on US specialisation,” Ecol. Econ. 54, no. 1 (2005) 95-109: 15; Eskeland, G. A. and Harrison, A. E. E., “Moving to greener pastures? Multinationals and the pollution-haven hypothesis,” J. Dev. Econ. 70, no. 1 (1997) 1-23., regulators attitudes are influenced by interstate competition: Konisky, D. M., “Regulator attitudes and the environmental race to the bottom argument,” Journal of Public Administration Research and Theory 18, no. 2 (2008) 321-344.

4

introduction

limiting the negative effects of another policy (climate change mitigation) which itself mitigates yet another policy (trade liberalisation). In the European Union, Art. 17 to 19 Renewable Energy Directive 2009/28/ EC on the promotion of energy from renewable sources (RED)5 have attempted to strike such a balance. RED amends and eventually repeals its predecessors in the matter of renewable energy, the Directives 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market,6 formerly known as the Renewable Energy Directive, and Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport.7 Unlike its predecessors, the Directive 2009/28/EC brings together all possible energy uses, power, heating and cooling, and transport. It sets targets for renewable energy for Member States (Art. 3, Annex I RED) and requires Member States to establish National Renewable Energy Action Plans, NREAP, Art. 4 RED). It develops and expands beyond the programmatic provision on the promotion of renewable energy contained in Directive 2001/77/ EC. However, RED is not only preoccupied with the promotion of renewable energy. Together with requirements on support schemes and provisions aimed at simplifying the expansion of the use of energy from renewable sources, Art. 17 to 19 RED introduce so-called sustainability criteria in order to limit the side effects of this expansion. In the interest of unity of the legal order, corresponding criteria have been included in Art. 7a to 7d Fuel Quality Directive 98/70/EC (FQD).8 The sustainability criteria were introduced because renewable energy targets were deemed so high that the environmental side effects had to be actively limited. Notably, the renewable energy targets are so high that the EU expects imports to be necessary, or at least commercially advantageous. Thus, biomass for energy will not only originate from the territory of the EU Member States: the European expansion of renewable energy also creates a “demand pull” on biomass from third countries. Biomass is likely to be imported from countries where the climate is amenable and production costs are low, so that the comparative advantage outweighs the transport costs. These resource states are mainly developing or newly developed countries, which are faced with their own 5

European Parliament and Council, Directive 2009/28/EC on the promotion of the use of energy from renewable sources, OJ [2009] L 140/17.

6

European Parliament and Council, Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market, OJ [2001] L 283/33.

7 European Parliament and Council, Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport, OJ [2003] L 123/42. 8

See recital 68 RED. European Parliament and Council, Directive 98/70/EC relating to the quality of petrol and diesel fuels, OJ [1998] L 350/58; European Parliament and Council, Directive 2009/30/EC amending Directive 98/70/EC as regards to the specification of petrolium, diesel and gas oil and introducing a mechanism to monitor and reduce greenhouse gas emissions and amending Council Directive 1999/32/EC as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/EEC, OJ [2009] L 140/88.

5

towards sustainability of biomass importation

regulatory challenges. The demand pull exerted on third countries adds to these challenges. The negative impacts are thus exported to countries that were not involved in the policy choice creating the demand pull. In effect, climate change mitigation attempts on one side of the globe may lead to environmental degradation and destruction on the other side of the globe. It has to be noted that whereas from an EU perspective, the balance has to be struck between climate change mitigation and other environmental concerns, for exporting countries, the balance between environmental concerns and economic development and trade may be quite different. Accordingly, the conflict agglomerate between trade as an instrument for economic development, climate change mitigation and environmental concerns appears yet again in another form. This book will consider Art. 17 to 19 RED as an example of striking a balance between climate change mitigation and mitigating the environmental side effects of the said policy, taking into account trade interests.

6

part i

Foundations

chapter 1

The Regulatory Challenge of Bioenergy

chapter 1

the regulatory challenge of bioenergy

This chapter defines the key concepts of biomass and bioenergy, forming the terminological basis for this book. Moreover, it details the advantages of their use as well as the European renewable energy targets that build onto these advantages. Subsequently, the potential negative side effects of climate change mitigation through the use of bioenergy are presented in greater detail. Finally, the sustainability criteria, drafted to address these side effects, are introduced.



1.1 Biomass for energy

Biomass is a versatile material with multiple uses. It is used as building and insulation material, for clothing, for the production of plastic or paper, as food or feed, for the production of fertilisers or other industrial products. Moreover, biomass is an important source of energy, so called bioenergy. Biomass has traditionally been used for energy through simple combustion (i.e. by burning), as a source of heating and for cooking. More recently, modern forms of bioenergy have emerged and expanded rapidly. These modern uses of bioenergy will be at the focus of this book.



1.1.1 Terminology

The terminology around biomass for energy is incoherent with differing, overlapping definitions. Unless otherwise specified, the terminology of RED will be followed. The following diagram shows the use of terms under Art. 2 RED which will be explained in the following text and further referred to later in the document.

Diagram 1: bioenergy under RED



1.1.1.1 Biomass

The starting point for the definitions under RED is the term biomass: according to Art. 2 g) RED, ‘biomass’ means the “biodegradable fraction of products, waste and residues from biological origin from agriculture (including vegetal and animal substances), forestry and related industries including fisheries and aquaculture, as well as the biodegradable fraction of

11

towards sustainability of biomass importation

industrial and municipal waste.” Thus, it encompasses a broad scientific definition as biological material derived from living or recently living (i.e. non-fossil) organisms. However, in this definition, the origin of the material is the human use. It does not begin with the origin of the biomass itself: the formation of plant biomass through photosynthesis, fixing solar energy to organic carbon, thus removing carbon dioxide from the air.1 However, the term biomass is not defined coherently, and therefore does not provide a starting point for all definitions. For example, the Food and Agriculture Organisation (FAO) uses examples of different feedstocks for as a basis for their definition, such as sugar cane, maize, palm oil or willow,2 while in its unified bioenergy terminology the term biomass remains undefined.



1.1.1.2 Bioenergy

RED itself does not define the term bioenergy, but only declares energy from biomass as energy from renewable sources, together with wind, water, solar power and geothermal energy. (Art. 2 (a) RED). Similarly, the statute of the International Renewable Energy Agency uses the term bioenergy without further definition (Art. III n. 1). Nonetheless, Art. 2 (a) RED specifies that for the purpose of the Directive, energy has to stem from renewable non-fossil sources, i.e. regenerate itself in a short period. Fossil fuels such as coal and oil, and even peat are part of a much longer geological carbon cycle, taking thousands to million years to be renewed.3 No further details are given for energy from biomass. No differentiation is made between for example the traditional use of biomass for energy, the direct combustion of wood in a fire, and the so-called “modern” use for example as transport fuel. 4



1.1.1.3 Biofuel and bioliquid

To make biomass manageable for regulation under the RED sustainability criteria, not all forms of bioenergy are considered, but only liquid (and in the transport sector also gaseous) aggregates. Moreover, RED differentiates between biofuels and bioliquids, depending on the end use. The limitation of the sustainability criteria to liquid biomass suggests that the European Union considered the side effects of bioenergy particularly prominent in this area.5 1

Haberl, H. and Erb, K.-H. “Assessment of sustainable land use in producing biomass.” In Renewablesbased technology – Sustainability assessment, edited by Dewulf, J. and Langenhove, H. V., 175-192. Chichester: Wiley, 2006, 175.

2 3

Food and Agriculture Organisation (FAO). “The state of food and agriculture 2008.” 2009, 10.

Thus, the term renewable is imprecise, but will be used here as it is the commonly employed.

4 5

IPCC. “Renewable energy sources and climate change mitigation – special report “. Geneva, 2011, 216.

See Commission, Communication – Biomass Action Plan, COM [2005 ] 628 final, 6, 46. stressing the importance of the expansion of liquid bioenergy.

12

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the regulatory challenge of bioenergy

‘Bioliquids’ means liquid fuel for energy purposes other than for transport, including electricity and heating and cooling, produced from biomass (Art. 2 h RED). Bioliquids are used for the production of heating and power, often as co-generation (Combined Heat and Power, CHP) through the combustion of plant oils, in particular palm oil, biodiesel, biogas or wood pellets.6 ‘Biofuels’ means liquid or gaseous fuel for transport produced from biomass; (Art. 2 i RED).7 The regimes for biofuels and bioliquids are mainly equivalent, although special provisions apply to biofuels, i.e. the transport sector. RED also attaches different consequences to different generations of biofuels and biofuels (although these terms are not used). The regime applies to first generation biofuels, in particular bioethanol and biodiesel. Bioethanol is produced by fermentation of corn, sugar cane or sugar beets. Biodiesel is produced by transesterification of plaint oils from soy, rapeseed, palm oil etc. to fatty acid methyl esters (FAME), or more specifically vegetable methyl esters (VME). The regime also applies to second generation biofuels, a more efficient source of energy currently under development. However, Art. 21 (2) RED foresees several privileges for accounting for these so-called advanced biofuels, made from non-food cellulosic – but also lignocellulosic – materials. These are fuels from residues or using entire plants rather than plant oils. In its definition of the term biofuel, the RED takes a very narrow stance. Other definitions are very diverse, complicating the discussion. Under the FAO Unified Bioenergy Terminology, biofuel is considered the energy carrier, bioenergy the energy output into which a biofuel can be converted (such as heating or power). The differentiation between solids, liquids and gases appears only illustrative.8 A similar stance is taken by the Roundtable of Sustainable Biofuels (RSB) generic standard, which defines biofuels as “solid, liquid or gaseous fuel obtained from recently living material.”9 Thus, this broad biofuel definition appears to have the same meaning as the use of the term energy from biomass in Art. 2 (a) RED. Nonetheless, the RSB has adopted the RED definition for its Access to the EU standard.



1.1.2 Advantages of bioenergy use

Bioenergy (along with other renewable energy sources) offers an opportunity to replace fossil fuels, thus diversifying energy sources and 6

Naik, S. N. et al., “Production of first and second generation biofuels: a comprehensive review,” Renewable and Sustainable Energy Reviews 14, no. 2 (2010) 578-597.

7

Notably, this terminology is not coherent with European Parliament and Council, Regulation (EC) n. 1099/2008 on energy statistics, OJ [2008] L 304/1. which distinguishes between solid biomass, biogas and liquid biofuels [emphasis added].

8

FAO Forestry Department – Wood Energy Programme. “Unified bioenergy terminology – UBET.” Rome, 2004, 7, 11, 42.

9

RSB, Use of terms for the RSB principles & criteria (glossary), RSB-DOC-10-002 [2010], 8.

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increasing energy security, although this effect is limited where biomass has to be imported. Additionally, the European renewable energy policy is also perceived as a motor for job creation and rural development, rejuvenating less advantaged regions by bringing technological development to these areas. Furthermore, the cultivation of energy crops for biomass may establish new agricultural processes, in turn leading to the restoration of degraded land and thus increasing its carbon storage capacity. Nonetheless, the strongest driver for the use of bioenergy is its contribution to energy security and to climate change mitigation through the reduction of greenhouse gas (GHG) emissions by replacing the fossil fuels that are the prime cause of anthropogenic global warming.10 Biomass has several further characteristics that distinguish it from other renewable energy sources. Bioenergy can be made available in all aggregate states, solid, liquid and gaseous, can easily be stored and is less dependent on the existence of a grid, which makes its use very flexible. Biomass is the only renewable energy source that can be used for all energetic purposes: electricity, heating and cooling or as a transport fuel.11 Biomass today provides 10% of the global energy production, including traditional uses.12 Developing countries meet up to 90% of their energy requirements with biomass. On the contrary, only 3 to 4% of the EU’s and the USA’s energy needs are currently met by biomass.13



1.1.3 The European renewable energy targets and the necessity of imports

As part of the EU’s 20-20-20 climate and energy targets, the European Commission suggested in its 2007 road map for renewable energy a 20% renewable energy target by 2020,14 alongside a 20% GHG emission reduction compared to 1990 and a 20% efficiency increase. Art. 3 (1) RED has transferred the policy statement into a legally binding obligation: 20% of the gross final energy consumption (electricity, heating and cooling and transport) shall be satisfied by renewable energy by 2020. Member States have to contribute to this target to varying degree, depending on the availability of resources and potential for the development of renewable energy, the gross domestic product (GDP) and the energy mix prior to the RED (recital 15 RED). This 20% target does not exclude the transport sector, but is an overall target for all energy uses combined. Art. 3 (4) RED contains a further, specific, 10% target for the trans10 11

Commission, Communication – Renewable Energy Road Map, COM [2006] 848 fin., 9.

Rosillo-Calle, F. “Overview of bioenergy.” In The biomass assessment handbook: bioenergy for a sustainable environment, edited by Rosillo-Calle, F., et al., 1-26. London: Earthscan, 2007, 11.

12

IEA/OECD. “World Energy Outlook.” Paris, 2010, 282; IEA/OECD. “World Energy Outlook.” Paris, 2006, 423.

13

Rosillo-Calle, F. “Overview of bioenergy.” In The biomass assessment handbook: bioenergy for a sustainable environment, edited by Rosillo-Calle, F., et al., 1-26. London: Earthscan, 2007, 3.

14

Commission, Communication – Renewable Energy Road Map, COM [2006] 848 fin., 3.

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port sector which applies to all Member States indistinctly, as biofuels are considered easily tradable (recital 16 RED).15 Moreover, the transport sector specific quota has been explained by the fact that renewable energy does not have such a widespread use in that sector yet compared to electricity and heating and cooling.16 Notably, it is only this transport-specific target that the Commission shall review by the end of 2014 (Art. 23 (8) (b) RED). Even though this target is for the transport sector and not specifically for biofuels (for example, e-mobility from wind or solar power is also eligible), it is likely that bioethanol and biodiesel will make up the majority of the renewable energy used. Overall, the use of biomass for energy is expected to increase considerably.17 In order to achieve those targets, Member States have set up different support schemes.18 According to Art. 2 k) RED, these support schemes may include investment aid, tax exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green certificates, and direct price support schemes including feed-in tariffs and premium payments. The renewable energy targets can be fulfilled with energy from any renewable sources, i.e. energy from renewable non-fossil sources, namely wind, solar, aerothermal, geothermal, hydrothermal and ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas and biogases (Art. 2 a) RED). Energy from biomass will play a major role in meeting those targets: currently, three quarters of heating and cooling – and through CHP also a portion of electricity – from renewable sources are satisfied by energy from biomass. In the transport sector, the first generation biofuels biodiesel and bioethanol are at this time the only market-ready fuels.19 How much biomass is needed to achieve the targets and the extent of the environmental and social impacts, including competing uses such as food, are not yet clear. Models rely on a number of parameters that may vary considerably in the future. Parameters include uncertainties about the available biogenic residues and renewable resources and agricultural management systems and available conversion technology,20 especially with new technologies such as biofuels 15

See van Steen, H. “The determination and enforceability of national renewable energy targets.” Chap. 3 In Renewable energy law and policy in the European Union, edited by Hercsuth, A., et al., 43-69. Leuven: Claeys&Casteels, 2010.

16

Hodson, P. “Renewable energy in transport (including biofuels).” In Renewable energy law and policy in the European Union, edited by Hercsuth, A., et al., 173-208. Leuven: Claeys&Casteels, 2010, 7.4.

17

Commission, Communication – Renewable Energy Road Map, COM [2006] 848 fin., 11.

18

Klessmann, C. et al., “Status and perspectives of renewable energy policy and deployment in the European Union—What is needed to reach the 2020 targets?,” Energy Policy 39, no. 12 (2011) 7637-7657.

19

For example for Germany: Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit (BMU). “Erneuerbare Energien in Zahlen – nationale und internationale Entwicklung.” Berlin, 2011, 7. See also Commission, Communication – Biomass Action Plan, COM [2005 ] 628 final, 7 foll.

20

Fritsche, U. “Stoffstromanalyse zur nachhaltigen energetischen Nutzung von Biomasse.” Darmstadt: Öko-Institut, 2004; Thrän, D. et al. “Nachhaltige Biomassenutzungsstrategien im europäischen Kontext – Analyse im Spannungsfeld nationaler Vorgaben und der Konkurrenz zwischen festen, flüssi-

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of the second generation under development. Accordingly, estimates of land use for bioenergy production in Europe range from 20 to 60 million ha in 2020 or 2030, the potential for domestic biofuel production also differs considerably.21 The European Commission estimated in 2007 that, if a 10% biofuel target were introduced, about 43 Megatons of oil equivalent (Mtoe) of biofuel would be necessary to reach that quota.22 The Commission Energy Road Map 2050 stresses that biomass will continue to be a very important energy source, in particular in the transport sector.23 Recital 16 RED presumes that while the targets could be met with domestic production, a combination with imports would be both “likely and desirable”.24 Thus, instead of limiting quotas so that they can be achieved locally, the EU relies on an equivalent agricultural production in third countries which is then imported – essentially exporting the environmental side effects. It is difficult to ascertain how much biomass for energy can be produced locally and how much is or would have to be imported. Trade flows are difficult to trace, in particular for feedstock with dual uses (food and energy), such as palm oil.25 In 2009, the global biodiesel production was 572 PJ, the global fuel ethanol production 1540 PJ.26 International trade in biofuels has risen from practically zero to 120-130 PJ in the decade leading up to 2009, mainly directed to the lucrative markets in the EU or the USA. The domestic bioenergy policies are expected to continue to strongly affect international trade.27 There is a good chance that imports will rise beyond just what is necessary to meet targets that cannot be fulfilled by local production, as imported biomass for energy may be economically more attractive than local produce.28 The production of bioenergy gen und gasförmigen Bioenergieträgern.” Leipzig: Institut für Energetik und Umwelt, 2005; European Environmental Agency (EEA). “How much Bioenergy can Europe Produce without Harming the Environment.” EEA, 2006. 21

Fischer, G. et al., “Biofuel production potentials in Europe: sustainable use of cultivated land and pastures, Part II: land use scenarios,” Biomass Bioenerg. 34, no. 2 (2010) 173-187: 182, 185.

22

Commission, The impact of a minimum 10% obligation for biofuel unse in the EU-27 in 2020 on agricultural markets, AGRI G-2/WM D [2007], 11.

23

Commission, Communication – Energy Roadmap 2050, COM [2011] 885 final, 11.

24

This suggests that an expansion of domestic production to the extent required to meet the targets may collide with other environmental, economic and social targets, so that costs would be higher than desired or considered acceptable.

25

Different uses of the raw materials are not always documented in the customs documentation, for example under the Harmonised System Commodity Description and Coding System (HS) of the World Customs Organisation.

26

Lamers, P. et al., “International bioenergy trade--A review of past developments in the liquid biofuel market,” Renewable and Sustainable Energy Reviews 15, no. 6 (2011) 2655-2676: 2660.

27

Ibid.: 2669, 2672.

28

Accordingly, imports will play a major role in meeting the renewable energy targets, even if the EU become a net exporter as predicted by the JRC. Fonseca, M. B. et al. “Impacts of the EU biofuel target on agricultural markets and land use.” Seville: JRC, 2010, 65 foll.

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or its raw materials is particularly attractive in the tropics, as land is cheap and yields are high.29 Many states are expected to develop their export potential, in particular the South East Asian states including Malaysia, Thailand, Indonesia and the Philippines, and a number of African and South American countries.30 The estimates of future production and exports differ considerably. Besides the intra-European trade, Brazil had been estimated to count for more than half of the export market for ethanol in 2009, mainly made from sugar cane. The biggest exporters of biodiesel were Malaysia and Indonesia, accounting for 90% of the market.31 With the development of second generation biofuels (BtL or ligno-cellulosic ethanol), the pressure on woody biomass is also increasing.32 According to their National Renewable Energy Action Plans (NREAP) Member States are expecting to import a total of 44% bioethanol (3.1 Mtoe) and 36% biodiesel (7.7 Mtoe) or associated feedstocks in 2020.33 It has been estimated that without the renewable energy targets, exports of palm oil from Indonesia and Malaysia would be 25% lower.34



1.1.4 Summary

Bioenergy has a range of advantages that lead to its growing importance as an energy source. In particular, it can contribute to the mitigation of climate change through the replacement of fossil fuels. The renewable energy target of 20% and the transport specific target of 10%, accompanied by national support schemes, are artificially creating a market for biomass, biofuels and bioliquids. The European targets create a demand pull both domestically and in third countries.

29

OECD – Round Table on Sustainable Development. “Biofuels: is the cure worse than the disease.” Paris: OECD, 2007, 12 foll.

30

Worldwatch Institute, Biofuels for transport – Global potential and implications for sustainable energy and agriculture (London: Earthscan, 2007), 9, 141.

31

Lamers, P. et al., “International bioenergy trade--A review of past developments in the liquid biofuel market,” Renewable and Sustainable Energy Reviews 15, no. 6 (2011) 2655-2676: 2664; OECD/FAO. “Agricultural Outlook 2008-2017.” Paris, Rome, 2008, 18, Tables A.10, A.11.

32

Wunder, S. et al. “Impact of EU bioenergy policy on developing countries.” European Parliament – DG General for external policies of the Union, 2012, 5.

33

Bowyer, C. “Anticipated indirect land use change associated with expanded use of biofuels and bioliquids in the EU – an analysis of the National Renewable Energy Action Plans.” London: Institute for European Environmental Policy, 2011, 8.

34

Fonseca, M. B. et al. “Impacts of the EU biofuel target on agricultural markets and land use.” Seville: JRC, 2010, 40.

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1.2 Interests to be balanced in climate change mitigation

The use of bioenergy is seen in particular as a means to combat climate change. However, policy and legal instruments to mitigate climate change are not necessarily ‘environmentally friendly’ per se. The increasing and more intensive production of biomass for energy in the interest of mitigating climate change causes a number of side effects, including among others: direct and indirect environmental damage from the production of biomass, socioeconomic problems concerning the availability of biomass for food and feed arise or are intensified, and land use changes may put pressure on land rights of indigenous populations (see Table 1). Environmental

Social

Economic

Opportunities

Climate change mitigation Restoration of degraded land

Rural development Access to energy

Energy security Poverty reduction Economic development

Risks

Increased GHG emissions Land use changes Biodiversity loss Water, air, soil

Food security Labour conditions Land rights Human rights

Changes in trade streams against food trade

Table 1: risks and opportunities



1.2.1 The notion of climate

Climate encompasses the meteorological elements in a given region over a long period (including temperature, humidity, atmospheric pressure, wind, rainfall, atmospheric particle count and others). According to the IPCC glossary, “Climate in a narrow sense is usually defined as the ‘average weather,’ or more rigorously, as the statistical description in terms of the mean and variability of relevant quantities over a period of time ranging from months to thousands or millions of years. The classical period is 30 years, as defined by the World Meteorological Organisation. [...] Climate in a wider sense is the state, including a statistical description, of the climate system.” Accordingly, climate change is the variation in global or regional climates over time, even though it is frequently used to refer only to changes in modern climate, also known as global warming. It has to be stressed that the climate is not static, but a very dynamic mechanism, and thus climate change is a natural occurrence. The term climate change mitigation was coined specifically in the context of addressing anthropogenic climate change – that caused by humans. The climate has undergone fundamental changes since the first industrial revolution, which has seen an exponential rise in anthropogenic GHG emissions, primarily carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). The IPCC has predicted

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profound changes to the world; altered temperatures, precipitation etc. leading to rising sea levels, droughts, desertification, storms. The temperature rise will have a considerable impact on local biodiversity, causing the shifting and destruction of habitats, thus altering substantially the conditions for life, and sometimes even making life in an area impossible.35 Accordingly, the challenge of mitigating climate change is of the highest magnitude. Nonetheless, it cannot be considered an absolute goal. Otherwise, it risks destroying the very values it set out to protect. Accordingly, the mitigation of climate change has to be balanced against other environmental concerns, which will be addressed under the more faceted notion of biodiversity.



1.2.2 The environmental integrity of climate change mitigation

As described, the promotion of the use of biomass for energy is seen as an instrument in mitigating climate change. However, conflicts are arising with other concerns – socio-economic concerns like conflicts with food and feed, but also environmental concerns, exemplified by biodiversity. In the following, the notions of climate and climate change as well as biodiversity will be detailed and interactions between these environmental concerns shown. In particular, the negative side effects of bioenergy for climate change mitigation will be shown. This section exposes the conflicts arising between climate change mitigation in the form of bioenergy and biodiversity protection. In particular, the environmental integrity of climate change mitigation measures has to be investigated. A narrow definition of environmental integrity is the ability of an environmental measure to fulfil its objective and purpose.36 However, environmental integrity can also be defined much more broadly: it can also describe the ability of measures in other contexts to address their environmental impact. Environmental measures need to be holistic: in pursuing their goals, an environmental measure should limit (or at least consider) its interference with other environmental goods.



1.2.2.1 Conflicting environmental concerns

Unlimited climate change mitigation measures, much like unlimited trade, pose a threat to other environmental concerns as will be described below (1.2.3.2). These other environmental concerns are strongly related to the definition of environment, which is difficult to delineate. Art. 3 (3) TFEU makes reference to the environment, as do Art. 191 TFEU and Art. 114 (3) TFEU, though without 35

IPCC. “Climate Change 2007: impacts, adaptation and vulnerability – Working Group II contribution to the Fourth Assessment Report.” Cambridge, New York: Cambridge University Press, 2007.

36

Voigt, C., “Is the Clean Development Mechanism sustainable? Some critical aspects,” Sustainable Development Law & Policy 15, no. 8 (2008) 15-21: 16.

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providing a definition. In its ordinary meaning, “environment” appears shapeless and faceless, describing surroundings in general, specifically adapted in some cases, for example as “work environment” (see Art. 114, Art. 153 TFEU) or “natural environment”. From Art. 191 (1), (2) TFEU certain elements forming part of the “natural” environment can be deduced: human beings, natural resources, land use, town and country planning, waste and water. Thereby, certain areas of the environment are delineated, including natural and manmade environment.37 However, definitions listing the various elements of the environment are diverse and differ. A more detailed definition holds the quality of the environment to consist of the quality of air, rivers, lakes, coastal and marine waters, the quality of water, protection against noise, contamination of soil, soil erosion and desertification, preservation of habitats, flora and fauna, landscape and other elements of the natural heritage, the amenity and quality of residential areas.38 Accordingly, the notion of “environment” is difficult to manage. Consequently, instead of a definition of the notion of environment, literature often focuses on the key concepts or key issues.39 Notably, most aspects enumerated as elements of the environment appear to be covered by the notion of biodiversity. For example, the limitation of pollution or the management of water resources is eventually a means to protect ecosystems and species, thus biodiversity. 40 Unlike the term environment, the notion of biodiversity is more clearly defined. 41 Within this book, climate change measures will therefore be considered for this more clearly defined aspect of biodiversity, which provides some contours to the conflict of climate change mitigation and other environmental concerns. In part, this approach also seems to have been taken by RED, which enumerates certain ecosystems considered of high biodiversity value in Art. 17 (3) RED. Biodiversity, short for biological diversity, derived from the Greek βίος (life), replaced the notion of wildlife as the subject of regulation in the 1970s. The notion of biodiversity is open to definition, allowing for multiple cultural, economic and political connotations. In the Convention on Biodiversity (CBD), biodiversity is defined as “the variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems” (Art. 2 CBD). Thus, the CBD distinguishes between three conceptual levels: the diversity of ecosystems, 37

Krämer, L., EU environmental law, 7th ed. (London: Sweet & Maxwell, 2011), 1-01.

38

Council, Declaration on the Environment, Resolution of 15/6/1990 [1990], 1.36.

39

See for example Beyerlin, U. and Marauhn, T., International environmental law (Portland: Hart, 2011); Krämer, L., EU environmental law, 7th ed. (London: Sweet & Maxwell, 2011).

40 41

Beyerlin, U. and Marauhn, T., International environmental law (Portland: Hart, 2011), 177.

Sands, P. et al., Principles of International Environmental Law, 3rd ed. (Cambridge: Cambridge University Press, 2012), 449 foll; Krämer, L., EU environmental law, 7th ed. (London: Sweet & Maxwell, 2011), 5-02 foll.

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species (taxonomic) and genetics. 42 According to the International Union for Conservation of Nature’s (IUCN) guide to the CBD, biodiversity is most conveniently, but not exclusively defined in three conceptual levels. More broadly, biodiversity has been defined as the variability of life in all its forms, levels and combinations. Biodiversity comprises the variability within and among ecosystems. It is an attribute of life, in contrast with biological resources that are “tangible biotic components of ecosystems.”43 Biodiversity is a non-renewable resource. It is the output of a four billion year evolutionary process which generated the present evolutionary potential, and is thus worthy of protection for the variety itself. 44 Moreover, it is valuable as a scientific and economic resource, 45 both for present and future generations. In an anthropocentric view, biodiversity is valuable as it serves and is exploited by humankind, be it for physical resources and food, ecosystem services (water, soil, air) or as an opportunity for recreation. It is also the foundation of diverse cultures, which have used resources in different ways. In an eco-centric view, biodiversity with all its elements provides a complex biosphere with fine-tuned resilience to physical conditions, able to adapt to changing conditions, making life on earth possible. The biosphere provides life-sustaining services such as supporting services (soil building), provisioning services (food, water) and regulating services (flood protection, climate). 46 Moreover, areas with high biodiversity often also have a high carbon storage capacity, creating synergies between biodiversity protection and climate change mitigation. 47 Even though the consequences of declining biodiversity are not immediately clear, many studies suggest that the alteration of ecosystem biodiversity may change biogeochemical cycles, modifying climatic processes and functions. Species richness and composition and the introduction of invasive species influ42

Genetic diversity is the sum of genetic information contained in the genes of plants, animals and micro-organisms. Species are populations within which gene flows occur under national conditions, i.e. individuals from opposite sexes in the same species can reproduce. Within each species, there is genetic variation. Ecosystems, some of which are spelled out in the CBD in a non-exhaustive list, relate to the variety of habitats, biotic communities and ecological processes in the biosphere. The different elements of biodiversity are interdependent and influence each other, blurring the borders between them.

43

Gaston, K. J. “What is biodiversity?”. In Biodiversity – A biology of numbers and difference, edited by Gaston, K. J., 1-9. Oxford: Blackwell Science, 1996.

44

Birnie, P., Boyle, A., and Redgwell, C., International law and the environment, 3rd ed. (Oxford: Oxford University Press, 2009), 588.

45

The Economics of Ecosystems & Biodiversity (TEEB). “Mainstreaming the economics of nature – a synthesis report of the approach, conclusions and recommendations of TEEB.” 2011.

46

Birnie, P., Boyle, A., and Redgwell, C., International law and the environment, 3rd ed. (Oxford: Oxford University Press, 2009), 584.

47

Díaz, S., Hector, A., and Wardle, D. A., “Biodiversity in forest carbon sequestration initiatives: not just a side benefit,” Current Opinion in Environmental Sustainability 1, no. 1 (2009) 55-60; O’Connor, D., “Governing the global commons: linking carbon sequestration and biodiversity conservation in tropical forests,” Global Environ. Change 18, no. 3 (2008) 368-374.

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ence climate-related ecosystem functions such as carbon storage. 48 The disappearance of certain species, such as the moss layer sheltering permafrost from sunlight, may alter the entire ecosystem. Accordingly, the impact of a loss of biodiversity may be immense, but is extremely difficult to quantify. 49



1.2.2.2 Positive effects of climate change mitigation

Even though the details are not clear, climate change will affect ecosystems.50 Global warming and rising sea levels will significantly alter and even destroy habitats. Ecosystems will have to either adapt or face destruction.51 As biodiversity may be strongly affected by climate change, using bioenergy (which should mitigate climate change) may contribute to the preservation of biodiversity. However, this positive effect of bioenergy will only occur if bioenergy truly is an instrument for climate change mitigation. This will depend on ensuring a positive carbon balance of bioenergy. Bioenergy was originally promoted as a carbon neutral energy source, thus a means for climate change mitigation. However, the carbon balance of bioenergy, calculated in a life cycle assessment (i.e. taking into account all steps of the production process) paints a different picture.52 The GHG balance of bioenergy is very difficult to estimate, as a number of different feedstock are grown, the production pathways are multiple and complex. It has been estimated that it will take between 75 and 93 years for carbon emissions saved through biofuels to compensate for carbon released during forest conversion, and up to 600 years for peatland.53 Moreover, uncertainties evolve around indirect effects of bioenergy, such as indirect land use changes or the impact on food and feed. The 48

Gleixner, G. et al. “The effect of biodiversity on carbon storage in soils forest diversity and function.” Chap. 9 In Forest diversity and function, edited by Scherer-Lorenzen, M., Körner, C., and Schulze, E.-D., 165-183. Berlin, Heidelberg: Springer 2005.

49

Proença, V. M. and Pereira, H. M. “Ecosystem changes, biodiversity loss and human well-being.” In Encyclopedia of environmental health, edited by Nriagu, J. O., 215-224. Burlington: Elsevier, 2011; Zhang, Q.-G. and Zhang, D.-Y., “Consequences of individual species loss in biodiversity experiments: an essentiality index,” Acta Oecol. 32, no. 2 (2007) 236-242.

50

IPCC. “Climate Change 2007: impacts, adaptation and vulnerability – Working Group II contribution to the Fourth Assessment Report.” Cambridge, New York: Cambridge University Press, 2007, 211 foll; IPCC. “Climate change and biodiversity – technical paper V.” Geneva, 2002.

51

Colwell, R. K. et al., “Global warming, elevational range shifts and lowland biotic attrition in the wet tropics,” Science 322, no. 5899 (2008) 258-260; Deutsch, C. A. et al., “Impacts of climate warming on terrestrial ectotherms across latitude,” Proceedings of the National Academy of Sciences 105, no. 18 (2008) 6668-6672.

52

See for example OECD – Round Table on Sustainable Development. “Biofuels: is the cure worse than the disease.” Paris: OECD, 2007.

53

Danielsen, F. et al., “Biofuel plantations on forested lands: double jeopardy for biodiversity and climate,” Conserv. Biol. 23, no. 2 (2009) 348-358.

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stored carbon is rapidly released into the atmosphere, besides GHG emissions during production, processing and transport. The impact of land use changes for bioenergy production could thus be extensive. Thus, the positive mitigation effect is mainly seen in the substitution of fossil fuels and of emission-intensive materials such as concrete, steel, aluminium and plastics.54



1.2.2.3 Adverse effects of climate change mitigation

Even if a positive carbon balance is assured, measures of climate change mitigation may still negatively affect biodiversity or the environment more generally. In the case of bioenergy, an increasing use may require both an intensification and area expansion (extensification) of agriculture. An expansion of agriculture requires land use changes. Intensification may require an increased use of chemicals and changing crops to increase yields, and thus affect agro-biodiversity.55 However, this book focuses on the impact on biodiversity other than agro-biodiversity. Intensification of agriculture is therefore considered from the perspective of the degradation of nearby biodiverse habitats affected by these changes, and not on the agricultural land itself.

1.2.2.3.1 Degradation

While intensification of agriculture obviously has a considerable impact on arable land, it can also strongly affect surrounding biodiverse habitats, for example: • Large-scale monocultures are prone to increased erosion. • Intensive irrigation increases the risk of desertification and the loss of biodiverse peatland. • Increasing use of chemicals such as fertilisers to increase yields may lead to eutrophication on the farmed land and on adjoining areas. • Besides effects on water quality, more-intensive farming may also require irrigation, thus withholding groundwater from natural or near natural ecosystems. • New crops, be they genetically modified organisms or potentially invasive alien species may spread across nearby natural or near natural habitats.56 In the following, the focus will however, in line with the scope of the criteria (see below) not lie on the environmental impacts of agriculture for the cultivation of biomass for energy. Even though these problems may be aggravated by 54

IPCC. “Climate change 2007 – Mitigation of climate change – Working Group III contribution to the Fourth Assessment Report.” Cambridge, New York: Cambridge University Press, 2007, 282, 629.

55

IPCC. “Renewable energy sources and climate change mitigation – special report “. Geneva, 2011, 257 foll.

56

Wissenschaftlicher Beirat der Bundesregierung Globale Umweltveränderungen (WBGU), Future bioenergy and sustainable land use (London: Earthscan, 2009), 79. with further references.

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bioenergy, they characterise all forms of agriculture, be it for food and feed or for energy. Accordingly, the focus will lie on natural and near natural habitats displaced by bioenergy. Nonetheless, reference will be made to agricultural issues where appropriate.

1.2.2.3.2 Land use changes and fragmentation

An increasing demand for bioenergy will entail an increasing demand for arable land, displacing previous uses – this is called land use change. In many cases, this will affect natural and near-natural habitat. Land use changes may be direct, where natural or near-natural habitats are converted to produce bioenergy feedstock, or indirect, where previous uses of a plot of land, for example agriculture for food, are displaced into natural or near-natural habitats (see below, section 3.2.2). While the destruction of an ecosystem involves its complete destruction (for example for plantations and production mills), construction of roads and other infrastructure fragments ecosystems into small areas, which may not be able to sustain their populations.57



1.2.3 Socio-economic impacts of bioenergy

As for environmental impacts, the impact of climate change mitigation measures can also have positive and negative impacts on socioeconomic concerns. On the one hand, the use of bioenergy can contribute to economic development, on the other hand, it can also create or aggravate socioeconomic issues.



1.2.3.1 Bioenergy for economic development

The promotion of renewable energy is not only seen as a factor for climate change mitigation and the security of energy supply, but also in “promoting technological development and innovation and providing opportunities for employment and regional development, especially in rural and isolated areas” (recital 1 RED).58 Thus, biofuels have the potential to contribute to rural development,59 generate employment, create trade and investment opportunities and thereby increase economic prosperity.60 This is particularly the case 57

Millenium Ecosystem Assessment. “Ecosystems and human well-being: synthesis report.” Washington, 2005, 96.

58

See also Commission, Communication – Renewable Energy Road Map, COM [2006] 848 fin.

59

Venghaus, S. and Selbmann, K., “Biofuel as social fuel. introducing socio-environmental services as a means to reduce global inequality?,” Proceedings of the Berlin conferences on human dimensions of global environmental change (2010) 1-30: 7.

60

See for example Silalertruksa, T. et al., “Biofuels and employment effects: implications for socioeconomic development in Thailand,” Biomass Bioenerg. 46(2012) 409-418; La Rovere, E. L., Pereira, A.

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in countries with climates suitable for agriculture and cheap labour, which are often developing and newly developed countries.



1.2.3.2 Adverse effects

However, an increasing use of bioenergy which is not directed by an appropriate legal framework also causes negative socio-economic impacts.61 The increasing use of bioenergy causes conflict not only in the environmental realm, but also has socio-economic impacts. Some of these impacts (such as the distribution of biomass for its different uses) are related to the use of the biomass itself, whereas others (such as land use rights and working conditions) are related to agriculture more generally. As arable land and yields of biomass are limited, the use of the available biomass creates competition between the different uses, notably between the use of biomass for energy and its use for food and feed. Land use changes for bioenergy mean that arable land cultivated for food and feed is no longer available for that purpose. This direct competition for space may cause shortages in the supply of food and feed.62 The competition can also be understood in an economic sense, as the trade of biomass will follow profitability. Accordingly, trade streams which were aimed at food production will be redirected for energy production where this is more profitable. Thus, even where food availability is not directly affected, the prices payable may rise considerably.63 Bioenergy thereby not only affects the availability, but also the affordability of food and feed.64 Moreover, biomass for energy has to be put into the wider context of agriculture. Increasing production of bioenergy will not only intensify but also extensify agriculture. This correlates to a higher demand for land. High profitability S., and Simões, A. F., “Biofuels and Sustainable Energy Development in Brazil,” World Devel. 39, no. 6 (2011) 1026-1036. 61

Jumbe, C. B. L., Msiska, F. B. M., and Madjera, M., “Biofuels development in Sub-Saharan Africa: Are the policies conducive?,” Energy Policy 37, no. 11 (2009) 4980-4986; Zhang, Z., “Asian energy and environmental policy: Promoting growth while preserving the environment,” Energy Policy 36, no. 10 (2008) 3905-3924.

62

See Kommer, S. “Agroenergy and the right to food – the EU biofuel mandate and the right to food sovereignty.” Bremen: Sf b 597 Staatlichkeit im Wandel – Transformations of the state, 2013, 6 foll.

63

de Schutter, O. “Q&A: What are the impacts of agrofuels on the right to food.” UN special rapporteur on the right to food, 2012; Food and Agriculture Organisation (FAO). “The state of food and agriculture.” Rome: FAO, 2012, 97 foll.

64

On the issue of conflicts with food, see Food and Agriculture Organisation (FAO). “Soaring food prices: facts, perspectives, impacts and actions required.” Rome: FAO, 2008; Oosterveer, P., “Food, fuel and sustainability: the political economy of agriculture,” Environmental Politics 21, no. 3 (2012) 528-531; Ajanovic, A., “Biofuels versus food production: Does biofuels production increase food prices?,” Energy 36, no. 4 (2011) 2070-2076.

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of the production of biomass for energy results in land tenure coming under threat, in particular where land use rights are not clearly delineated as is the case in many newly industrialised and developing countries, where indigenous and post-colonial legal regimes are overlapping (legal pluralism).65 Thus, ‘land grabbing’ is a serious concern in the expansion of bioenergy.66 Moreover, other socio-economic aspects come into play. A major issue is the working conditions of agricultural workers,67 touching on forced labour or child labour.



1.2.4 The specific situation of exporting countries

As described above, in order to meet the renewable energy targets, biomass may be imported from third countries. Even if the targets could be achieved by domestic production, the import of biomass for energy may have a comparative advantage (see above, section 1.1.3). In the case of exports of biomass for energy or biofuels and bioliquids, the potential exporting countries are typically developing or newly industrialised countries such as Brazil, Malaysia and Indonesia. Often, these countries have emerged from a colonial regime that overlaid traditional governance structures. They are generally regarded to suffer from low environmental standards, low enforcement rates and high corruption, albeit to different degrees.68 The specific challenges of potential exporting countries caused by the demand pull on biomass for energy may be illustrated by the situation in Indonesia: Indonesia is the world’s largest exporter of palm oil and thus a very strong player for bioenergy. At the same time, Indonesia hosts one of the most biodiverse tropical rainforests on Earth, an ecosystem that has extremely high biodiversity,69 and is already threatened.70 Indonesia is in many ways an ideal cultivation ground for oil palm: the agro-climatic factors deliver a high per-hectare yield. Even though production costs are higher than in China and Thailand, those countries do not have large areas suitable for oil palm. The Indonesian regions of Kalimantan, Sumatra and Sulawesi, where most plantations are situated, are thinly populated, humid tropical regions with a high availability of cheap labour.71 Palm oil, extracted 65

German, L., Schoneveld, G. C., and Pacheco, P., “Local social and environmental impacts of biofuels: global comparative assessment and implications for governance,” Ecol. Soc. 16, no. 3 (2011) Art. 29.

66

Deininger, K. et al. “Rising global interest in farmland: can it yield sustainable and equitable benefits?”. Washington: World Bank,, 2011, 13 foll., 163.

67

Goldemberg, J., Coelho, S. T., and Guardabassi, P., “The sustainability of ethanol production from sugarcane,” Energy Policy 36, no. 6 (2008) 2086-2097: 2095.

68

WWF Germany. “Rainforest for biodiesel? Ecological effects of using palm oil as a source of energy.” Frankfurt, 2007, 19; UNEP. “Yearbook 2008 – An overview of our changing environment.” Nairobi: UNEP, 2008, 14.

69 70

Myers, N. et al., “Biodiversity hotspots for conservation priorities,” Nature 403, no. 6772 (2000) 853-858.

WWF. “Squandering paradise? The importance and vulnerability of the World’s Protected Areas.” Gland, 2000.

71

Basiron, Y., “Palm oil production through sustainable plantations,” Eur. J. Lipid Sci. Technol. 109, no. 4 (2007 ) 289-295.

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from the fruit of the tree, is widely used for food and cosmetics production, but more and more also for energy production.72 The trade in palm oil is a major driver of economic development for Indonesia, which is one of the world’s biggest exporters of palm oil.73 Rising global demand for alternatives to carbon-based fuels is a key factor in driving biofuel plantation planning.74 Several incentives are also given for the expansion of bioenergy within Indonesia: targets are set for the national consumption, income taxes reduced and export taxes reduced in order to stimulate exports.75 The expansion of bioenergy puts additional pressure on Indonesia’s extremely biodiverse tropical rain forests,76 which are already under threat due to transmigratory settlement policy, agricultural projects to produce food, and plantations such as cocoa, coffee and rubber.77 The need for land leads to large scale deforestation,78 also making Indonesia the fourth biggest emitter of GHG gases.79 Palm oil plantations have already been a primary cause of deforestation in Kalimantan and Sumatra.80 During 1990-2006, it is estimated that at least 55% of the oil palm expansion in Indonesia came at the expense of natural forests.81 72

Achmaliadi, R. et al. “The state of the forest: Indonesia.” Bogor, Washington D.C.: Forest Watch Indonesia (FWI), World Resources Institute (WRI), 2002, 42; World Growth. “The economic benefits of palm oil in Indonesia.” Arlington, 2011, 7, 15.

73

Abdullah, A., “Determinants of Indonesian palm oil export: price and income elasticity estimation,” Tr. Agric. Econ. 4, no. 2 (2011) 50-57: 51. Abdullah, A., “Determinants of Indonesian palm oil export: price and income elasticity estimation,” Tr. Agric. Econ. 4, no. 2 (2011) 50-57: 51. OECD/FAO. “World Agricultural Outlook 2011-2020.” Paris, Rome, 2011, 37, 114.

74

Palmer, C. and Obidzinski, K. “Choosing avoided deforesttion baselines in the context of government failure – the case of Indonesia’s plantations policy.” In Avoided deforestation: prospects for mitigating climate change, edited by Palmer, C. and Engel, S., 110-129. London: Routledge, 2009, 116.

75

Perturan Presiden 5/2006 tentang kebijakan energi nasional (PP 5/2006). Instruksi Presiden 1/2006 tentang penyediaan dan pemanfaatan bahan bakar nabati (biofuel) sebagai bahan bakar lain (PI 1/2006). Perturan Pemerintah 1/2007 tentang fasilitas pajak penghasilan untuk penanaman modal di bidang-bidang uhasa tertentu dan/atau di daerah-daerah tertentu (PP 1/2007).

76 77

Myers, N. et al., “Biodiversity hotspots for conservation priorities,” Nature 403, no. 6772 (2000) 853-858.

Achmaliadi, R. et al. “The state of the forest: Indonesia.” Bogor, Washington D.C.: Forest Watch Indonesia (FWI), World Resources Institute (WRI), 2002, 10 foll.

78

Holmes, D. “Draft report: deforestation in Indonesia: a view of the situation in 1999.” Jakarta: World Bank, 2000, 10 foll. Holmes, D. “Draft report: deforestation in Indonesia: a view of the situation in 1999.” Jakarta: World Bank, 2000, 10 foll.

79

World Resources Institute (WRI). “Climate Analysis Indicators Tool (CAIT).” Washington, 2012; Pelangi Energi Abadi Citra Enviro (PEACE). “Indonesia and climate change: current status and policies.” 2007, 12 foll.

80

Pelangi Energi Abadi Citra Enviro (PEACE). “Indonesia and climate change: current status and policies.” 2007, 12; Achmaliadi, R. et al. “The state of the forest: Indonesia.” Bogor, Washington D.C.: Forest Watch Indonesia (FWI), World Resources Institute (WRI), 2002, 14.

81

Koh, L. P. and Wilcove, D. S., “Is oil palm agriculture really destroying tropical biodiversity?,” Conservation Letters 1, no. 2 (2008) 60-64. Butler, R. A. and Laurance, W. F., “New strategies for conserving

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The existing forestry regime is not sufficient to halt deforestation. The competences on planning are decentralised82 and sometimes awarded to public bodies with priorities other than conservation.83 Terminology and forest designation have been shown to differ, and sometimes considerably so, between national and regional plans.84 Synchronisation efforts showed a drastic decrease in the total forest area, particularly in production forest areas.85 The different forest classifications in the Forestry Act 41/199986 namely conservation forest, protection forest and production forest only provide limited protection.87 A great variety of licences for logging or the establishment of plantations and procedural safeguards have been found to be ineffective.88 In particular, fire clearance, circumventing concession requirements has been common.89 A status as a conservation forest was found to provide no guarantee of protection from logging and other forms of degradation. Instead of the forest classification and licencing, the determining factor seems to be the altitude, distance to logging tropical forests,” Trends Ecol. Evol. 23, no. 9 (2008) 469-472; Koh, L. P., Butler, R. A., and Bradshaw, C. J., “Conversion of Indonesia’s peatlands,” Front. Ecol. Environ. 7, no. 5 (2009) 238-238. 82

Barr, C. et al. “Decentralisation of forest administration in Indonesia – Implications for forest sustainability, economic developments and community livelihoods.” Bogor: CIFOR, 2006, 7.

83

McCarthy, J. and Zen, Z., “Regulating the oil palm boom: assessing the effectiveness of environmental governance approaches to agro-industrial pollution in Indonesia,” Law & Pol’y 32, no. 1 (2010) 153-179: 163.

84

Barr, C. et al. “Decentralisation of forest administration in Indonesia – Implications for forest sustainability, economic developments and community livelihoods.” Bogor: CIFOR, 2006, 45 foll.

85

Santoso, H. “Forest area rationalisation in Indonesia: a study on the forest resource considtion and policy reform.” World Agroforestry Centre, 2003, 7.

86

Undang-Undang 41/1999 tentang kehutanan. See also Government Regulation 6/2007 on forest planning and forest management plans and the utilisation of forest and forest area, Perturan Pemerintah 6/2007 tentang tata hutan dan penyusunan rencana engelolaan hutan, serta pengelolaan hutan.

87

Fuller, D. O. et al., “Spatial assessment of threats to biodiversity within East Kalimantan, Indonesia,” Applied Geography 30, no. 3 (2010) 416-425. WWF Indonesia. “Deforestation, forest degratdation, biodiversity loss and CO2 emissions in Riau, Sumatra Indonesia.” Jakarta, 2008, 17.

88

McCarthy, J. and Zen, Z., “Regulating the oil palm boom: assessing the effectiveness of environmental governance approaches to agro-industrial pollution in Indonesia,” Law & Pol’y 32, no. 1 (2010) 153-179: 158. Greenpeace. “Illegal forest clearance and RSPO greenwash: case studies of Sinar Mas.” 2009, 7.

89

Haberle, S. G., Hope, G. S., and van der Kaars, S., “Biomass burning in Indonesia and Papua New Guinea: natural and human induced fire events in the fossil record,” Palaeogeography, Palaeoclimatology, Palaeoecology 171, no. 3–4 (2001) 259-268. Hariri, D. and Ardiansyah, I. “Forest and land fires – Is it possible to decrease the hotspots to 50%?”. Jakarta: WWF Indonesia, 2007, 3 ; Aiken, S. R., “Runaway fires, smoke-haze pollution and unnatural disasters in Indonesia,” Geog. Rev. 94, no. 1 (2004) 55-79: 57, 63. The largest accumulation of the fire hotspots is in the Kalimantan Tengah province, followed by Riau, Sumatera Selatan, Kalimantan Barat, and Kalimantan Timur. The “Big Five” provinces contribute up to 68.08% of all hotspots in Indonesia.

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paths and mills and thus, the difficulty in exploitation. Upland forests – more difficult for plantations – were less threatened than lowland areas.90 Thus, the existing nature protection law has not been able to withstand the pressure of economic development. Economic drivers are strong, and are not kept in check by the limited governance structures, due to a lack of resources91 and high levels of corruption.92 New initiative such as the Indonesian Sustainable Palm Oil Standard (ISPO) have not yet shown the desired effects.93 Accordingly, the existing legal regime does not withstand the demand pull created by the increasing use of biomass for energy in the European Union. Consequently, there is room for EU criteria regulating environmental and social standards for imports into the Member States’ territory.



1.2.5 Conclusion

The use of bioenergy has been promoted as an instrument for climate change mitigation. However, although models differ, the negative impact of an increasing use of bioenergy on biodiversity could be considerable if left unregulated. In particular, an intensification of agriculture may lead to degradation, and increased demand entails extensification, causing direct and indirect land use changes. Moreover, the socio-economic impacts are considerable. Accordingly, climate change mitigation cannot be considered an absolute goal. Instead, a balance has to be struck not only between environmental and other (for example trade) concerns, but also between different environmental concerns. In this book, the socio-economic concerns will not be a main focus, as they do currently not form part of the substantial sustainability criteria. However, this is not intended to downplay the serious socio-economic issues linked to industrial agriculture and the cultivation of biomass for energy in particular. The balance with other environmental concerns places limits on climate change mitigation. It is in order to regulate this conflict between climate change mitigation and biodiversity protection that the sustainability criteria have been 90

Achmaliadi, R. et al. “The state of the forest: Indonesia.” Bogor, Washington D.C.: Forest Watch Indonesia (FWI), World Resources Institute (WRI), 2002, 16.

91

World Bank. “Strengthening forest law enforcement and governance – addressing a systemic constraint to sustainable development.” Washington, DC, 2006, 15 foll. McCarthy, J. and Zen, Z., “Regulating the oil palm boom: assessing the effectiveness of environmental governance approaches to agro-industrial pollution in Indonesia,” Law & Pol’y 32, no. 1 (2010) 153-179: 163.

92

World Bank. “Strengthening forest law enforcement and governance – addressing a systemic constraint to sustainable development.” Washington, DC, 2006; Matthew, R., Halle, M., and Switzer, J. “Conserving the peace: resources, livelihoods and security.” Gland, Winnipeg: IUCN, International Institute for Sustainable Development, 2002, 123. Zen, Z., McCarthy, J., and Barlow, C., “Environmental issues in an age of regional autonomy: the case of pollution in the plantation sector of North Sumatra,” Oil Palm Industry Economic Journal 5, no. 2 (2005) 23-36: 32.

93

Peraturan Menteri Pertanian (Permentan) 19/2011 tentang Pedoman Perkebunan Kelapa Sawit Berkelanjutan Indonesia. http://www.ispo-org.or.id/ (20/5/2012), still under development.

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introduced, making the environmental limits of climate change mitigation part of the climate change mitigation policy and instruments.



1.3 Introduction to the sustainability criteria

In designing environmental policy, two main choices have to be made: the level of protection has to be set and policy instruments must be chosen to achieve that level of protection.94 The Renewable Energy Directive 2009/28/EC (RED) addresses for the first time at the European level both the promotion of renewable energy in general and bioenergy in particular, and defines the limits of this promotion for the case of some forms of bioenergy in order to address its potential side effects.95 The sustainability criteria prescribe a certain GHG balance, the observation of certain rules of good agricultural practice and exclude certain ecosystems from cultivation or extraction of biomass, referred to as “no-go areas”.96 Moreover, reporting requirements on socio-economic criteria are introduced (see Diagram 2).

94

Keohane, N. O., Revesz, R. L., and Stavins, R. N. “The choice of regulatory instruments in environmental policy.” Chap. 29 In Economics of the environment, edited by Stavins, R. N., 549-592. New York, London: W. W. Norton & Company, 2005, 549.

95

See Staff working document on impact assessment – Document accompanying the package of implementation measures for the EU objectives on climate change and renewable energy for 2020, SEC (2009) 85 [2008], 14 foll. For a first assessment of the criteria and the underlying conflicts, see Ekardt, F., Schmeichel, A., and Heering, M., “Europäische und nationale Regulierung der Bioenergie und ihrer ökologischsozialen Ambivalenzen,” NuR 31, no. 4 (2009) 222-232.

96

The term no-go area suggests that cultivation or extraction of biomass is not permitted in those areas. However, the exclusion is only absolute for some ecosystems, such as primary forests. Several ecosystems, for example peatland, are only excluded subject to certain exemptions allowing cultivation and extraction.

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Diagram 2: the sustainability criteria



1.3.1 Legislative procedure and legal basis

RED was enacted under the co-decision procedure, laid down in Art. 251 TEC, now amended and renamed ordinary procedure in Art. 294 TFEU. It is the most commonly used procedure for EU legislation, fostering the greatest influence of the European Parliament.97 The Commission proposal for a Directive on the promotion of energy from renewable sources was issued on 23/1/2008.98 After the committee referral in the European Parliament on 11/2/2008, and several debates in the Council, the legislative process gained momentum after the submission of the report of the Committee on Industry, Research and Energy (ITRE) of the European Parliament on 26/9/2008. The European Parliament voted on the draft Directive on 17/12/2008 after a single reading on the previous day. The Council then adopted the final act on 6/4/2009 after the European Parliament’s first reading. The agreement on the 97

Auel, K. and Rittberger, B. “Fluctuant nec merguntur – The European Parliament, national parliaments and European integration.” Chap. 6 In European Union: power and policy-making, edited by Richardson, J. J., 3rd ed., 122-146. Abingdon, New York: Routledge, 2006, 124.

98

Commission, Proposal for a Directive on the promotion of the use of energy from renewable sources, COM [2008] 19 final.

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final text was reached through the trilogue procedure, an informal meeting between representatives of the Commission, the European Parliament, of the Council or more precisely a member of the Committee of Permanent Representatives (COREPER).99 The final act was signed on 23/4/2009 and published in the Official Journal on 5/6/2009. It entered into force on 25/6/2009 (Art. 28 RED). Thus, RED could serve as proof of commitment to climate change mitigation at the Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC) and the Meeting of the Parties to the Kyoto Protocol (KP) in Copenhagen in December 2009. The Directive was to be transposed into the national law of the Member States by 5/12/2010 (Art. 27 RED). It amended and eventually repealed the Directive 2001/77/EC on the promotion of renewable electricity and Directive 2003/30/EC on the promotion of biofuels in the transport sector as of 1/1/2012 (Art. 26 RED). RED is mostly based on the environmental competence of Art. 175 (1) TEC, now Art. 190 (1) TFEU. However, the sustainability criteria of Art. 17 to 19 RED are based on Art. 95 TEC, now Art. 114 TFEU, i.e. the competence to harmonise the internal market. According to recital 94, Art. 95 TEC, now Art. 114 TFEU, was chosen as a legal basis for the sustainability criteria as they harmonise the sustainability requirements thus also having an effect on the functioning of the internal market. Moreover, according to recital 96, the principles of subsidiarity and proportionality in Art. 5 TEC, now Art. 5 TFEU, have been observed.



1.3.2 Scope and legal consequences

Art. 17 to 19 RED define sustainability criteria for biofuels and bioliquids (Art. 2 h), g) RED). Solid fuels do not fall within the scope of RED, gaseous fuels are only covered if they are used in the transport sector (see Art. 2 g) RED). The sustainability criteria apply irrespective of the country of origin of the feedstock. Consequently, the country of production of the biofuel or bioliquid from the raw material is also without influence on the scope of application. The criteria apply to goods grown or produced within the EU and to imported goods in free circulation (Art. 24 TEC, now Art. 29 TFEU). The sustainability criteria apply to the national renewable energy targets imposed on the Member States (Art. 3, Annex I RED) and to selected support mechanisms (Art. 17 (1) RED). Thus, they set double incentives on compliance 99

European Parliament Council and Commission, Joint Declaration on practical arrangements for the codecision procedure, OJ [2007] C 145/05. This procedure has proved practical, aiming at reaching a compromise between Council and European Parliament at an early stage in the legislative procedure. Nonetheless, the procedure has been criticised for a lack of transparency and formality as well as shifting the institutional balances foreseen in the TEC – increasing the influence of COREPER over the Council proper, and limiting the influence of small parties with the European Parliament Chalmers, D., Davies, G., and Monti, G., European Union Law, 2nd ed. (Cambridge: Cambridge University Press, 2010), 108 foll.

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with the criteria, one for the Member States, and one for the economic operators eligible or obligated under the national support scheme. Only biofuels and bioliquids complying with these criteria can be counted toward national targets of 10% biofuels and the Member States’ share of the 20% renewable energy target (Art. 17 (1) subpara. 1 a) RED). Only biofuels and bioliquids complying with the criteria can be taken into account for compliance with renewable energy obligations (‘quotas’, Art. 17 (1) subpara. 1 b) RED) or financial support for the consumption of biofuels and bioliquids (Art. 17 (1) subpara. 1 c) RED). Lower requirements apply to energy produced from non-agricultural waste and residue (Art. 17 (1) subpara. 2 RED). Thus, the sustainability criteria do not directly regulate behaviour in the way that a public authority exercises control over certain activities in the public interest.100 Instead, they provide an incentive to operators to comply, without regulating their behaviour directly. However, it can be understood as regulation in a broader sense that includes any deliberate state influence or even all forms of social or economic influence.101



1.3.3 GHG emission balance

In order to contribute to the mitigation of climate change, biofuels and bioliquids have to reduce GHG emissions, i.e. show a negative carbon balance. This is to be ensured both through a GHG emission reduction quota and the exclusion of cultivation of so-called carbon sinks.



1.3.3.1 Greenhouse gas emission savings

Art. 17 (2) RED introduces a progressive reduction target for biofuels and bioliquids compared to fossil fuels. Until 2017, the GHG balance of biofuels and bioliquids have to be 35%, from 2017 50% and from 2018 60% lower for production installations in which production started in or after 2017 (Art. 17 (2) subpara. 1, 2 RED). However, production installations operating before 23 January 2008, the date of the Commission proposal, only have to comply from 1 April 2013, long after the transposition period ending 5 December 2010 (Art. 17 (2) subpara. 4, 27 (1) RED). Non-agricultural wastes and residues must comply with the GHG balance requirements of Art. 17 (2) RED, but need not fulfil any further criteria (Art. 17 (1) subpara. 2 RED). The calculation of the GHG balance of biofuels and bioliquids is conducted according to Art. 17 (2) subpara. 3, 19 (1), Annex V RED. In calculating the GHG emission balance, all emissions from cultivation, production and use of biofuels and bioliquids shall be taken into account (Life cycle assessment). Art. 19 (1) 100

See the definition of regulation by Selznick, P. “Focussing organizational research on regulation.” Chap. 11 In Regulatory Policy and the Social Sciences, edited by Noll, R. G., 363-367. Berkeley: University of California Press, 1985, 363-364.

101

Baldwin, R., Cave, M., and Lodge, M., Understanding regulation: theory, strategy and practice, 2nd ed. (Oxford: OUP, 2012), 3.

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and Annex V RED provide for different calculation pathways. Actual values can be used according to the calculation methodology foreseen in part C Annex V RED, or default values can be used (Annex V A, B RED), with aggregated default values provided where no values exist for the entire production chain (Annex V D, E RED). Default values are derived from typical values, the methodology used for the calculation of actual values as well as a scientific data set (Art. 2 n) RED). Notably, the default values can only be used under certain conditions, which includes biomass cultivated outside the EU (Art. 19 (3) a) RED).



1.3.3.2 The exclusion of carbon sinks

Biomass for biofuels and bioliquids may not be extracted from or cultivated on land that qualified as a carbon sink in January 2008 and has since lost that status (Art. 17 (4) RED). These sinks are repositories to which CO2 is deposited through natural processes, rather than a resource with intangible, non-economic benefits.102 Carbon sinks do not negate emissions elsewhere, but they store carbon, sometimes for a considerable amount of time; their destruction has substantial influence on the climate as this carbon is rapidly released.103 Art. 17 (4) RED enumerates specific sinks: • Wetlands, which are covered by or saturated with water for at least a significant part of the year (a); • Continuously forested areas of a certain size (over 1 ha), tree height (over 5m) and canopy cover (over 30%) (b); • Wooded land where the canopy cover is between 10% and 30% is excluded if the conversion would result in exceeding the GHG emission saving requirements of Art. 17 (2) RED, currently 35% (c).



1.3.4 The exclusion of biodiverse areas

Besides these carbon emission reductions, certain biodiverse areas are excluded from cultivation (Art. 17 (3) RED). This applies to areas that have held that status in or after January 2008, irrespective of their current status. Under Art. 17 (3) RED, land with high biodiversity value is excluded from cultivation. This includes: 102

A guirre, G. J., “Why cutting down trees is part of the problem, but planting trees isn’t always part of the solution – how concepualizing forests as sinks can work against Kyoto,” Or. Rev. Int’l L. 11, no. 1 (2009) 205-224: 206.

103

Deforestation of tropical forests is accountable for 20% of anthropogenic carbon emissions worldwide Gullison, R. E. et al., “Tropical forests and climate policy,” Science 316, no. 5827 (2007) 985-986. The opening of wetlands such as mangrove forests for palm oil plantations, associated with peat oxidation and fires causes large-scale methane and carbon emissions Parish, F. et al. “Peatlands, biodiversity and climate change: main report.” Kuala Lumpur, Wageningen: Global Environment Centre, Wetlands International, 2008.

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• Primary forests and other wooded land of native species where there is no visible indication of human activity and the ecological processes are not significantly disturbed (a). • Areas designated for nature protection under national law or according to international agreements, intergovernmental organisations or the IUCN, “unless evidence is provided that the production of that raw material did not interfere with those nature protection purposes” (b). • Highly biodiverse natural and non-natural grassland, the latter may be cultivated where harvesting of the raw material is necessary to preserve the grassland status (c). Moreover, Art. 17 (5) RED also excludes areas that were peatland in 2008 (unless cultivation does not involve drainage of previously undrained soil). Peatland is an example of where carbon sinks and high biodiversity coincide.



1.3.5 Agricultural standards

Art. 17 (6) subpara. (1) RED provides that agricultural raw materials shall fulfil the environmental standards under Regulation (EC) n. 73/2009 under the Common Agricultural Policy (CAP), which establishes minimum requirements for good agricultural practice.104 Notably, the compliance mechanism construed for the sustainability criteria does not encompass compliance with these agricultural standards (see Art. 18 (1) RED). Whether the requirements of cross compliance are observed is determined solely according to the rules of CAP. However, the rules on good agricultural practice only apply to raw materials cultivated within the European Union, and not to feedstock imported from third countries.



1.3.6 Compliance

Compliance control shall address compliance with the sustainability criteria, and beyond that also measures taken for the protection of soil, water and air as well as social rights (Art. 18 (3) subpara. 3; (4) subpara. 1, 2 RED), even though the latter have not been included in Art. 18 (2) to (5) RED, but are only retained as reporting requirements (see below, section 1.3.7). According to Art. 18 RED, Member States are not charged primarily with compliance control. Instead, Art. 18 (1), (3), (4) RED delegate compliance control to private operators and only establish a framework for compliance control. Compliance control mechanisms can be recognised under RED in three different ways: 104

Council, Regulation (EC) n. 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) n. 1290/2005, (EC) n. 247/2006, (EC) n. 378/2007 and repealing Regulation n. 1782/2003, OJ [2009] L 30/16.

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• Member States shall establish a framework under which they are provided with reliable information on compliance based on independent auditing (Art. 18 (3) RED). • The Commission can recognise schemes which may then operate across all Member States (Art. 18 (4), (7) RED). The Commission can recognise voluntary national or international schemes and compliance mechanisms established under bi- and multilateral agreements by the EU with third countries for the purpose of compliance if they meet adequate standards of reliability, transparency and independent auditing (Art. 18 (5) RED). • Where Member States have doubts on the compliance on the source of biofuels or bioliquids, they may consult the Commission (Art. 18 (8) RED).



1.3.7 Reporting requirements and reform

Both Member States and the Commission are subject to several reporting requirements. These address the scope of the sustainability criteria, the requirements on the GHG balance and no-go areas in Art. 17 (2) to (6) RED, but also additional socio-economic requirements.



1.3.7.1 Reporting requirements the scope of the sustainability criteria

According to Art. 17 (9) RED, the Commission shall report on requirements for a sustainability scheme for energy uses beyond biofuels and bioliquids by 31 December 2009 and submit proposals if appropriate. However, no action has yet been taken based on this report.105



1.3.7.2 Reporting requirements relating to Art. 17 (2) to (6) RED

RED establishes several reporting requirements on the experience with the sustainability criteria with a view to possible reform. Notably, as for compliance, reports on good agricultural practices are only to be submitted according to CAP. Thus, the agricultural issues of bioenergy risk not being fully reflected when amending the sustainability criteria in the future. There are no provisions to ensure that synergy effects between agriculture law and bioenergyspecific instruments addressing other side effects of the cultivation of biomass for energy are taken advantage of. Member States shall report on the impact of biofuels on biodiversity and ecosystem services, GHG emission savings and the development of second generation biofuels and energy from waste (Art. 22 (1) (i) to (k) RED), information to be incorporated by the Commission into its own biannual reports to the Council and the European Parliament (Art. 22 (3) RED). 105

Commission, Report on sustainability requirements for the use of solid and gaseous biomass sources in electricity, heating and cooling, COM [2010] 11 final.

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The Commission is subject to several reporting requirements, in which it shall analyse the environmental impacts and costs of biofuels (not bioliquids), in particular for imports from third countries (Art. 23 (5) RED). The Commission has already issued a report on sustainability criteria for solid and gaseous biomass according to Art. 17 (9) RED.106 The Commission shall submit reports on specific issues surrounding the GHG balance of biofuels and bioliquids, in particular the emissions from agriculture in third countries, indirect land use changes and the adaptation of default values for second generation biofuels (Art. 19 (4) to (6) RED). By the end of 2012, the Commission shall also report on the overall effectiveness of the recognition system and on the expansion of the sustainability criteria to ecosystem services, notably water soil and air protection (Art. 18 (9) RED). By 31/12/2014, the Commission shall also report among others the minimum GHG emission saving thresholds, a review of the renewable energy targets taking into account environmental side effects (Art. 23 (8) a), b) RED). The results from these reports will feed both into strategic and regulatory proposals from the Commission. They are the basis of the Renewable Energy Roadmap for the post-2020 period in 2018 (Art. 23 (9) RED). Moreover, they are also the foundation of several obligations of the Commission to submit proposals amending RED in general and the sustainability criteria in particular. Some requirements on the Commission are to propose amendments on selected issues without agenda, such as Art. 23 (5) subpara. 2 RED, enumerating in particular relative environmental benefits and costs of biofuels, the environmental and economic impact of increased demand in the EU and third countries, the scope of identifying areas high in biodiversity beyond those currently covered by the Directive, the impact of increased demand, the availability of biomass from waste or other non-food material and indirect land use changes. Others are scheduled explicitly, such as a report on indirect land use changes due 31/12/2010 (Art. 19 (6) RED). In 2014, the provisions on the 20% renewable energy target and GHG balance are to be reviewed and amended if appropriate. (Art. 23 (8) subpara. 2 RED), as well as a comprehensive report on the application of RED in 2021 (Art. 23 (10) RED).



1.3.7.3 Reporting requirements relating to socio-economic impacts

Art. 17 (7) RED stipulates several reporting requirements on socio-economic issues that are not yet incorporated into the substantial sustainability criteria themselves. Nonetheless, the reporting requirements are introduced here as well with a view to reforming the sustainability criteria. Starting in 2012, the Commission shall present biannual reports to the Parliament and the Council on the major supply states for feedstock and biofuels as well as national measures taken for the compliance with the sustainability 106

Ibid.

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criteria and the protection of ecosystem services, in particular soil, water and air (Art. 17 (7) subpara. 1 RED). Furthermore, the Commission shall report biannually from 2012 on the impact on socio-economic aspects, in particular the impact of the EU biofuel policy on food security as well as development issues in general. Land-use rights shall be addressed, as well as ratification and implementation of Conventions of the International Labour Organisation, for example on forced labour, the right to organise and child labour shall be documented, along with ratification and implementation of the Convention on Biodiversity’s Cartagena Protocol on Biosafety and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Thus, the reporting requirements on the sustainability criteria link onto other international agreements. Notably, the reporting requirements on socio-economic issues are much less linked to requirements for amendments than those for environmental side effects: the reporting requirements on socio-economic issues in Art. 17 (8) RED do not include requirements on the Commission to propose reforms. Explicit provisions on the inclusion of socio-economic impacts of bioenergy are only made for competition with food: the 2014 Commission report under Art. 23 (8) RED shall also take into account the impact of the use of biomass for energy on food prices when reviewing the renewable energy targets (Art. 23 (8) subpara. 1 c) RED). According to Art. 23 (8) subpara. 1 b) ii) RED, the Commission shall also report on the feasibility of reaching the renewable energy target while ensuring the sustainability of biofuels, considering among other aspects economic, environmental and social impacts. Based on this report, the Commission shall submit proposals if deemed appropriate, in particular on the renewable energy target (Art. 23 (8) subpara. 2 RED). Other solutions to the competition of biomass for food and feed and biomass for energy are not suggested by the Directive. Other socio-economic issues such as land rights and working conditions, which are not bioenergy specific but may be increased by the increasing demand for bioenergy are not mentioned explicitly in the issues enumerated in Art. 23 (5) subpara. 1 RED, where reforms shall be proposed by the Commission if deemed necessary (Art. 23 (5) subpara. 2 RED). Art. 23 (5) subpara 1. (b) RED speaks of economic and environmental impacts, rather than social impacts. The reference to indirect land-use changes in Art. 23 (5) (f) RED is not phrased specifically for socio-economic impacts, suggesting that as in Art. 19 (6) RED, the notion of indirect land use changes is only considered from a climate change mitigation perspective. However, socio-economic impacts fall under the “impact of increased demand for biomass on biomass using sectors” (Art. 23 (5) subpara 1 d) RED), even though an economic focus is suggested. Moreover, the list of focal points in Art. 23 (5) subpara. 1 RED is not exhaustive (“in particular”). Thus, future reforms may incorporate socio-economic concerns into the substantial part of the sustainability criteria. However, the general phrasing suggests that socio-economic concerns will not be considered a focus of amendments to the

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sustainability criteria. No reference is made to more general regulations or directives in the agricultural sector where the issues of land rights and working conditions would be addressed more generally. However, when regulating the recognition of voluntary schemes for assessing compliance with the sustainability criteria, Art. 18 (4) subpara. 2 RED also makes reference to the reporting requirements according to Art. 18 (7) RED. The Commission can decide that the recognised voluntary schemes contain accurate data as to the socio-economic reporting requirements. Thus, even though compliance with the reporting requirements is not mandatory, they are linked into the compliance control mechanism.



1.3.8 Summary

RED recognises the potential risk of environmental and social side effects caused by the renewable energy targets that it introduces, and introduces a set of sustainability criteria for biofuels and other bioliquids to help mitigate that risk. This is a direct attempt to balance climate change mitigation with mitigation of other harms. Notably, the competence chosen as legal basis is not the environment, but the harmonisation of the internal market, showing clearly the interconnections between environmental concerns and trade. As environmental regulation can never directly address the environment, but only influence human behaviour,107 the sustainability criteria address the trade in goods. The scope of the sustainability criteria is clearly delimited: it applies to biofuels and bioliquids, as far as national targets for renewable energy, renewable obligations and the financial support of the consumption of biofuels and bioliquids are concerned. Moreover, the sustainability criteria focus on certain environmental impacts: a specific GHG emission balance as well as the exclusion of certain ecosystems considered particularly high in biodiversity or carbon storage capacity. The focus of the sustainability criteria is strongly on the environmental side effects; socio-economic considerations are mentioned, but do not form part of the criteria themselves, being taken into account through reporting requirements only. The requirements on the Commission for reforms beyond environmental concerns remain general and show that socio-economic concerns, besides the conflicts with food, are not a strong focus of the further evolution of the criteria. Moreover, an important area of legislation – agriculture – has been completely ignored for imports from third countries. Even for domestic biomass, the agricultural aspects of biomass for energy remain governed by the Common Agricultural Policy without bridges built between these areas of law. In the following chapters, the challenges and limitations of the sustainability criteria will be discussed in detail. 107

Bothe, M., “The United Nations Framework Convention on Climate Change – an unprecedented multilevel regulatory challenge,” Heidelberg Journal of International Law 63(2003) 239-254: 246.

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part ii

The European Sustainability Criteria

chapter 2

scope of application

Part II will assess the contribution of the substantial sustainability criteria to the preservation of the environment for the protection of biodiversity while at the same time pursuing the goal of mitigating climate change. The substantial part of the sustainability criteria for biofuels and bioliquids is contained within Art. 17 RED, with additional provisions on the GHG emission balance in Art. 19 RED. Art. 18 RED, which addresses the compliance mechanism will be addressed in Part III. Art. 17 RED sets out criteria for certain kinds of bioenergy, but does not place the criteria in a broader context. However, the overarching principle is clear from the common name of the criteria as “sustainability criteria”, placing them in the context of sustainability or sustainable development.1 Sustainable development is referred to in the preambles of TEU and TFEU. According to Art. 3 (3) TEU, the EU shall work for the sustainable development of Europe, according to Art. 3 (5), it shall contribute to sustainable development of the Earth. Moreover, the “principle of sustainable development” is also referred to in Art. 37 of the European Charter of Fundamental Rights. However, it is unclear whether this determination of principle is accurate. Based on Art. 2 TEC (Now Art. 3 TEU), sustainable development was classified as a policy, not intended to be binding and lacking determinable content.2 Art. 10 A (2) (d), (f) TEU states: “The EU shall define common policies fostering sustainable development and contribute to the development of international measures for the sustainable management of resources,” suggesting that a reclassification is not called for. Irrespective of the classification of the notion of sustainability, the rules in Art. 17 to 19 RED are usually referred to as sustainability criteria. In the following, these criteria will be assessed as to their contribution to the protection of the environment and biodiversity. The sustainability criteria apply to certain types of bioenergy, biofuels and bioliquids as defined by Art. 2 RED, establishing compliance as a condition for certain support schemes, in particular renewable energy quotas and financial support for the consumption of renewable energy. The sustainability criteria require a certain progressively rising GHG emission balance, i.e. a certain level of GHG emission reduction compared to fossil fuels. Moreover, they exclude certain ecosystems and protection zones from cultivation and harvesting of biomass, for the purposes of biodiversity protection or carbon storage. Part II details the scope of application of the sustainability criteria as well as the different substantial requirements on the GHG emission balance and biodiversity protection. The importance of socio-economic issues of bioenergy should not be underestimated, but will not be addressed here as the sustainability criteria only introduce reporting requirements for these issues (Art. 17 (8) RED), which are 1

World Commission on Environment and Development (Brundtland Commission). “Our Common Future.” 1987; World Summit on Sustainable Development, Plan of implementation [2002].

2

Winter, G. “The legal nature of environmental principle in International, EC and German Law.” In Principles of European Environmental Law, edited by Macrory, R., 9-28. Groningen: European Law Publishing, 2004, 14.

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currently combined with very limited requirements for amending proposals by the Commission (see above, section 1.3.7). Accordingly, the focus will be on the scope of application and the substantial criteria.

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Scope of Application

chapter 2

scope of application

Art. 17 (1) RED clearly delineates the scope of application of the sustainability criteria in two ways. Firstly, the criteria cover biofuels and bioliquids (Art. 2 h), i) RED) irrespective of the origin of the raw materials. Secondly, the criteria are a condition for the eligibility of economic operators for certain national support schemes, financial support for the consumption Art. 17 (1) b), c) RED), and importantly, to be counted towards the Member States’ national renewable energy targets (Art. 17 (1) a) RED).



2.1 Types of bioenergy

The sustainability criteria do not apply to biomass or bioenergy in general, but only to biofuels and bioliquids, whether the biomass they are produced from is imported or domestic.



2.1.1 Imported and domestic

The sustainability criteria apply to all biofuels and bioliquids irrespective of the place of cultivation of the raw materials (Art. 17 (1) RED). Raw materials can be produced inside or outside the territory of the European Union. The place of production of the end product – the biofuel or bioliquid – is not relevant, only that the product is used for energy within the jurisdiction of the Member States. Thus, the criteria have the potential to alleviate conflicts between different environmental concerns, climate change mitigation and biodiversity protection not only within the EU but also in third countries.



2.1.2 Biofuels and bioliquids

The sustainability criteria only apply to some forms of bioenergy. The criteria do not apply to bioenergy in general, but only to biofuels and bioliquids. According to the definition in Art. 2 (h) RED bioliquids are “liquid fuel for energy purposes other than for transport, including electricity and heating and cooling, produced from biomass. Biofuel is, according to Art. 2 (i) RED “liquid or gaseous fuel for transport produced from biomass”. Both are derived from biomass, defined as “the biodegradable fraction of products, waste and residues from biological origin from agriculture (including vegetal and animal substances), forestry and related industries including fisheries and aquaculture, as well as the biodegradable fraction of industrial and municipal waste” (Art. 2 (e) RED). Notably, the primary focus of the sustainability criteria was originally only biofuels, reflecting the greater importance of bioenergy in the transport sector. However, the criteria were extended to (non-transport) bioliquids in order to avoid leakage effects (see recital 67 RED). Interestingly, the reporting requirements according to Art. 17 (7), 23 (5) RED only refer to biofuels,

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even though the criteria apply to both biofuels and bioliquids. Accordingly, the limitation of reporting requirements will only have limited impact. Notably, the applicability of the sustainability criteria is not based on the biomass itself, but on the actual use of the biomass: only biomass processed into biofuels and bioliquids is included. However, biomass feedstocks used for biofuel production can often also be used for purposes than energy use. For example, palm oil can be used for the production of biodiesel, or for food and feed. These multi-purpose feedstocks are only covered by the sustainability criteria when processed for the energy sector. Thus, the intended end use of feedstocks must be considered even during their cultivation. The scope of application of the sustainability criteria does not differentiate according to the energy content or efficiency. No differentiation is made between first– and second–generation biofuels, which represent different stages of technological development (see Introduction). The first generation biofuels, bioethanol and biodiesel, are produced from starchy plants or oil seeds, whereas second–generation fuels can be made from non-food or ligno-cellulosic material. This means that second–generation fuels are made from the entire plant or by-products and wastes, rather than specialised energy plants,3 and the negative environmental impact is much reduced. 4 Some differentiation between these generations is introduced in the application of the sustainability criteria: the increased efficiency of advanced biofuels and bioliquids is reflected in the default values for the GHG balance, and further, these more advanced fuels can be counted twice: towards fulfilling the national target as well as a national renewable obligation (Art. 21 (2) RED). A Commission proposal seeking to reform RED suggests a much more differentiated system that reflects different efficiencies in fuels and raw materials and consequently different adverse environmental impacts. Under this proposal, biofuels and bioliquids from food crops, i.e. all biofuels of the first generation, would be limited to 5%, i.e. half of the overall renewable energy target in the transport sector (10%).5 Furthermore, although Art. 21 RED would be deleted, (including the double counting provision6), biofuels produced from some raw materials such as algae or palm oil mill effluent would instead be considered four times their energy content,7 and others such as cooking oil or non-food cellulosic material twice their energy content.8 Thereby, the Commis3

Sims, R. E. H. et al., “An overview of second generation biofuel technologies,” Bioresource Technology 101, no. 6 (2010) 1570-1580.

4

Eisentraut, A. “Sustainable production of second-generation biofuels – Potential and perspectives in major economies and developing countries.” Paris: OECD/IEA, 2010, 67 foll.

5

Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012], Art. 2 n. 2 (c) amending Art. 3 (4) (b), (d).

6 7

Ibid., Art. 2 n. 8.

Ibid., Art. 2 n. 2 (c) introducing Art. 3 (4) (e) Annex IX A.

8

Ibid., Art. 3 (4) (e) Annex IX B.

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sion proposal suggests a much more differentiated system that reflects different efficiencies in fuels and raw materials and consequently also different adverse environmental impacts.



2.1.3 The exclusion of solid and gaseous bioenergy

The sustainability criteria apply to liquid biomass only. This approach appears somewhat arbitrary, as aggregate states are relative: a product can change between solid, liquid, or gas depending on temperature and pressure. The focus on liquid aggregate states could be explained by the overwhelming use of liquid biofuels, biodiesel and bioethanol in the transport sector, which is a major market of biomass for energy (see above, section 1.1.3). However, whereas in the heating and electricity sector only liquid biomass as defined in Art. 2 h) RED has to comply with the sustainability criteria, biofuels are also covered in a gaseous aggregate state. Considering that the same raw material can be used for power or heat generation after gasification, or be further refined as a biofuel (for instance to methanol or hydrogen), this differentiation appears inconsistent. Moreover, the sustainability criteria do not apply to solid fuels, such as wood used for heating or biogas, whereas bioliquids and biofuels from solid feedstock have to be compliant. These inconsistencies in the scope of application will lead to displacement effects (leakage) where compliant biomass is used where the sustainability criteria apply, and other biomass is used elsewhere. The application of the sustainability criteria to bioliquids in general (see recital 67 RED) is not sufficient to prevent leakage. When drafting RED, liquid biomass, in particular for transport, was considered the sector where the environmental and socio-economic side effects of bioenergy where the most apparent. Both demand and trade in liquid biomass has risen considerably: in the OECD countries, the demand for liquid biomass has increased about 17.3% per year between 1970 and 2006, while the use of solid biomass for energy grew by 1.3%.9 However, both biogas and solid biomass are being used more and more for energy production. The biogas sector is growing rapidly, and consequently so are the side effects. The Renewable Energy Act 2009 (Erneuerbare Energien Gesetz)10 has pushed the expansion of biogas in Germany, with 350 new installations in 2008 and just under 900 in 2009.11 This expansion has needed a substantial increase in substrates, in particular energy crops such as corn, and has consequently increased the pressure on land use. The area used for biomass production in Germany has quadrupled in the last five years from 160,000 ha in 2006 to 9

Eisentraut, A. “Sustainable production of second-generation biofuels – Potential and perspectives in major economies and developing countries.” Paris: OECD/IEA, 2010, 26.

10

 Erneuerbare-Energien-Gesetz (Renewable Energy Act, EEG), BGBl. I [2008] 2074 (last amended by Art. 2 (69) Law of 22/12/2011, BGBl. I 3044).

11

Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit (BMU). “Erfahrungsbericht 2011 zum Erneuerbare-Energien-Gesetz (EEG-Erfahrungsbericht).” 2011, 73.

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650,000 ha in 2010.12 This does not take into account directly or indirectly increased imports. Moreover, the refined biogas fed into the natural gas grid has increased considerably, having nearly tripled to 50 installations from 2008 to 2010.13 The pressure on the environment from the use of solid – in particular woody – biomass is increasing, partly through exports from developing countries into the EU.14 The exclusion of energy from solid biomass is also problematic, as the use of solid biomass for energy is a rapidly growing market and the environmental side effects are becoming more and more visible. In Germany, the installed capacity of electricity from solid biomass has increased tenfold from 2000 to 2009 to 1.210 MWel in 280 installations. An expansion of the use of mature forest for energy use would cause conflicts with the use of wood as material.15 In its 2010 Report on sustainability requirements for the use of solid and gaseous bioenergy sources, drafted according to Art. 17 (9) RED, the Commission recommends the introduction of parallel criteria to apply to these forms of bioenergy.16 A public consultation held in 2011 confirmed that imports are expected to rise, in particular of wood pellets and chips, and mostly welcomed the potential establishment of binding sustainability criteria parallel to the biofuel and bioliquid criteria.17 However, so far, no further action has been taken.



2.1.4 The exemption of waste and residue

While the sustainability criteria apply to all biofuels and bioliquids, the requirements are reduced for some raw materials. Biofuels and bioliquids “produced from waste and residues, other than agricultural, aquaculture, fisheries and forestry residues” only have to comply with the minimum GHG reduction requirement (Art. 17 (1) 2 RED). Even though the use of waste and residue is desirable to increase production and efficiency, this lower standard could only be justified if the primary use of these materials is regulated by standards comparable or higher than those for other bioliquids and biofuels in Art. 17 (3) to (6) RED. Notably, the notion of waste or residue is currently not defined in RED. A Commission proposal for amendments to RED refers the 12 13

Ibid.

Ibid., 75.

14

Wunder, S. et al. “Impact of EU bioenergy policy on developing countries.” European Parliament – DG General for external policies of the Union, 2012.

15

Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit (BMU). “Erfahrungsbericht 2011 zum Erneuerbare-Energien-Gesetz (EEG-Erfahrungsbericht).” 2011, 11.

16

Para. 3.2 Commission, Report on sustainability requirements for the use of solid and gaseous biomass sources in electricity, heating and cooling, COM [2010] 11 final.

17

Commission, Results of the public consultation on additional sustainability measures at EU level for solid and gaseous biomass used in electricity, heating and cooling [2011].

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definition of waste to Directive 2008/98/EC,18 which defines waste as “any substance or object which the holder discards or intends or is required to discard.” Substances modified or contaminated to fit this definition shall not be covered.19



2.2 The twofold incentive for compliance

The scope of application of the sustainability criteria is not only limited to particular types of bioenergy; they also only apply to biofuels and bioliquids that shall be taken into account for the national target for renewable energy or under certain national support schemes (Art. 17 (1) 1 RED). Compliance with the sustainability criteria is not mandatory, but is introduced as an incentive: economic operators (potential beneficiaries of the national support scheme) are encouraged to recur to compliant biofuels and bioliquids. Alongside this, Member States can only count compliant biofuels and bioliquids towards their national overall targets for renewable energy.



2.2.1 National renewable energy targets

Only biofuels and bioliquids complying with the sustainability criteria can be counted towards the achievement of the national targets (Art. 17 (1) 1 (c) RED). These mandatory national overall targets are for the share of renewable energy consumption, which must in total make up 20% of gross final consumption in the European Union and the transport (not biofuel) specific target of 10% in each Member State (Art. 3 (1), (4) RED). This European target is distributed amongst the Member States according to geographical and economic criteria (Annex I A RED). For example, Luxembourg must reach 11%, Germany 16% and Sweden 49% renewable energy in their energy mix. Thus, there is an incentive on the Member States to legislate for all renewable energy support to require compliance with sustainability criteria. Art. 4 (3) RED suggests measures Member States can employ in order to achieve their renewable energy targets. Notably, Member States shall cooperate with other Member States and third countries (Art. 3 (3) (b), 7 to 11 RED) and apply support schemes for the promotion of renewable energy (Art. 3 (3) (a) RED. These support schemes are also relevant to the scope of application of the sustainability criteria.

18

Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012], Art. 2 (1).

19

European Parliament and Council, Directive 2008/98/EC on waste and repealing certain Directives, OJ [2008] L 210/3, Art. 3 n. 1.

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2.2.2 Selected support schemes

Only biofuels and bioliquids compliant with the sustainability criteria are eligible for certain national support schemes; the instruments in achieving the national renewable energy targets (Art. 17 (1 (b), (c) RED). The Member States have introduced different support schemes for the different energy uses, transport, electricity, and heating and cooling. However, the sustainability criteria do not apply to all support schemes, but only to selected schemes.



2.2.2.1 Member States’ national support schemes

Support schemes are defined within RED as “any instrument, scheme or mechanism applied by a Member State or a group of Member States, that promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price at which it can be sold, or increasing, by means of a renewable energy obligation or otherwise, the volume of such energy purchased.” Examples of support schemes are given as “investment aid, tax exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green certificates, and direct price support schemes including feed-in tariffs and premium payments” (Art. 2 (k) RED). The RED thus takes an inclusive approach, seeking to cover all potential support mechanisms that could be applied to renewable energy in general, and to biofuels and bioliquids in particular. Member States have introduced a variety of support mechanisms,20 supporting investments and promoting the production of renewable energy, using price regulation or incentives for building capacity as drivers:21 Price regulation

Quantity regulation

Investment support

Subsidies for investments into renewable energy production plants Fiscal incentives

Tender schemes

Production support

Price support schemes (Feed-in tariffs, Feed-in premiums) Fiscal incentives

Quotas (combined with green certificates)

Table 1: support schemes Fiscal incentives include capital subsidies, grants and rebates, investment and production tax credits, or the reduction of specific taxes such as sales taxes, 20

Ragwitz, M. et al. “Renewable energy policy country profiles.” Ecofys, Fraunhofer ISI, Energy Economics Group, Lithuanian Energy Institute, 2011. See also http://www.res-legal.eu/en/home/ (22/2/2012).

21

Kitzing, L., Mitchell, C., and Morthorst, P. E., “Renewable energy policies in Europe: converging or diverging?,” Energy Policy 51, no. 0 (2012) 192-201.

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energy taxes, CO2 taxes or Value Added Tax (VAT). Subsidies can for example come in the form of public investment, loans and grants.22 However, in Europe these fiscal instruments have taken a supplementary role. In the electricity and heating sector, support for the production of energy has the biggest influence: feed-in tariffs are the dominant support scheme,23 after setting quotas through renewable energy obligations did not show the expected effects.24 In the biofuel sector, tax reductions and renewable energy obligations are the most common.25 Feed-in tariffs (FIT) are based on the guarantee of accepting renewable energy into the power grid, combined with guaranteed prices for a certain period of time26 or a certain amount of production,27 although the schemes differ in detail.28 Another financial support mechanism that has emerged are feed-in premiums, where renewable energy is traded at market prices, and guaranteed premiums are paid to producers. This approach has for example been introduced for renewable electricity from biomass in Germany29 in an attempt to increase the integration of renewable energy into the general energy market.30

22 23

KPMG. “Taxes and incentives for renewable energy.” KPMG, 2012, 1, 47.

Ragwitz, M. et al. “Review report on support schemes for renewable electricity and heating in Europe.” In Reshaping RES policy in Europe: Fraunhofer ISI, Energy Economics Group, Ecofys DIW Berlin, Lithuanian Energy Institute, Utrecht University, Energy Banking Advisory Ltd., KEMA, Bocconi University, 2011; Ragwitz, M. et al. “Assessment and optimisation of renewable energy support schemes (OPTRES) – final report.” Karlsruhe: OPTRES, 2007; Canton, J. and Johannesson Lindén, A. “Support schemes for renewable electricity in the EU.” In Economic Papers: European Commission, 2010.

24

See for example Wood, G. and Dow, S., “What lessons have been learned in reforming the Renewables Obligation? An analysis of internal and external failures in UK renewable energy policy,” Energy Policy 39, no. 5 (2011) 2228-2244; Woodman, B. and Mitchell, C., “Learning from experience? The development of the Renewables Obligation in England and Wales 2002–2010,” Energy Policy 39, no. 7 (2011) 3914-3921.

25

Wiesenthal, T. et al., “Biofuel support policies in Europe: Lessons learnt for the long way ahead,” Renewable and Sustainable Energy Reviews 13, no. 4 (2009) 789-800; OECD. “Economic assessment of biofuel support policies.” Paris, 2008.

26

 Erneuerbare-Energien-Gesetz (Renewable Energy Act, EEG), BGBl. I [2008] 2074 (last amended by Art. 2 (69) Law of 22/12/2011, BGBl. I 3044), s. 16 to 33.

27

Denmark, Promotion of Renewable Energy Act (VE-lov) [2008], s. 36 to 48.

28

See Kitzing, L., Mitchell, C., and Morthorst, P. E., “Renewable energy policies in Europe: converging or diverging?,” Energy Policy 51, no. 0 (2012) 192-201: 194.

29

S. 33g foll, 27 EEG. See also Schlacke, S. and Kröger, J., “Eine verfassungsrechtliche Bewertung der Kennzeichnung von marktprämien-gefördertem Strom als Grünstrom,” Neue Zeitschrift für Verwaltungsrecht 31, no. 15 (2012) 919-925.

30

Gawel, E. and Purkus, A., “Markt- und Systemintegration erneuerbarer Energien: Probleme der Marktprämie nach EEG 2012,” Zeitschrift für Umweltrecht, no. 11 (2012) 587-596.

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The use of price-regulating financial incentives such as feed-in tariffs and feed-in premiums is increasingly common over the use of quantitative approaches31 such as renewable energy obligations. Renewable energy obligations are defined in Art. 2 l) RED as a national support schemes requiring producers, suppliers or consumers to include a certain proportion of renewable energy in their production, supply or consumption. Compliance with the quota obligation can for example be achieved through guarantees of origin (see Art. 15 RED). Quotas can also be combined with tradable certificates (green certificates),32 where energy and certificate are dissociated and can be traded independently.33 Examples of the use of quotas and/or tradable green certificates are found in the United Kingdom, Germany, Sweden and Poland.34 Another quantitative approach is the tender scheme, where a public authority calls for tenders for specific projects. Operators then compete to win the project.35 However, this project-based approach does not lend itself to durable support of the renewable energy market, and is not suggested by Art. 2 k) RED. Accordingly, there is great variety in the support schemes chosen by the Member States. However, compliance with the sustainability criteria is not a condition for eligibility for all national support schemes, but is specific to two types of support scheme.



2.2.2.2 Renewable energy obligations and selected financial support

The requirement to comply with the sustainability criteria is limited to renewable energy obligations as quantitative measures and financial support for the consumption of biofuels and bioliquids (Art. 17 (1) 1 (b), (c) RED). As described above, “financial support for the consumption of biofuels and bioliquids” (Art. 17 (1) 1 (c) RED) comes in the form of tax incentives, feed-in tariffs or feed-in premiums. However, not all financial support mechanisms are covered: only financial support for the consumption of biofuels and bioliquids is tied to compliance with the sustainability criteria. Where the production of biofuels and bioliquids is incentivised, Art. 17 (1) (c) RED does not require compliance with the sustainability criteria. Feed-in tariffs (which are the most important 31

Kitzing, L., Mitchell, C., and Morthorst, P. E., “Renewable energy policies in Europe: converging or diverging?,” Energy Policy 51, no. 0 (2012) 192-201: 200.

32

Bertoldi, P. and Huld, T., “Tradable certificates for renewable electricity and energy savings,” Energy Policy 34, no. 2 (2006) 212-222. Suggesting a Europe wide trade in green certificates is Aune, F. R., Dalen, H. M., and Hagem, C., “Implementing the EU renewable target through green certificate markets,” Energy Econ. 34, no. 4 (2012) 992-1000.

33

See also OECD. “Economic assessment of biofuel support policies.” Paris, 2008.

34

Ragwitz, M. et al. “Assessment and optimisation of renewable energy support schemes (OPTRES) – final report.” Karlsruhe: OPTRES, 2007. See also www.res-legal.eu (20/05/2012).

35

Ibid., 37.

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of the financial incentives, see above) are typically attached to production,36 as is the case in for example Austria, Bulgaria and Germany.37 Where this cost is eventually passed on to the consumer, it does not promote, but directly charges for renewable energy consumption. Feed-in tariffs or feed-in premiums are therefore unlikely to fall under the scope of application of the sustainability criteria. The same result appears to be true for tax incentives, which appear to address producers and suppliers, but not consumers.38 Accordingly, only quota schemes and financial consumption incentives are linked to the sustainability criteria, but not financial support for the production and supply.



2.2.2.3 The rationale for the limitation

Other national support schemes, in particular tax-related support or investment aid and financial support for the production (as opposed to consumption) of bioenergy, are not covered. Thus, support under these schemes can be granted even if the biofuel or bioliquid in question does not comply with the sustainability criteria. The rationale for the limitation of the sustainability criteria to renewable energy obligations and financial support for consumption (Art. 17 (1) (b), (c) RED) could be that these mechanisms cannot readily be construed as state aid under Art. 107 (1) TFEU (ex Art. 87 TEC). EU state aid regulation in Art. 107 to 109 TFEU is part of the EU rules on competition (Title VII, chapter 1 TFEU). It aims at preventing distortions of the market though aids granted by the Member States (see Art. 52 TEU).39 It applies to all economic activities of companies and production branches, unless these are governed by specific regimes under the TFEU. 40 State aids are generally considered incompatible with the internal market, unless explicitly permitted in the TEU or TFEU (Art. 107 (1) TFEU). 41 According to Art. 107 (1) TFEU, “any aid granted by a Member State or through state resources in any form whatsoever which distorts or threatens 36

See Ibid; Jenner, S., Groba, F., and Indvik, J., “Assessing the strength and effectiveness of renewable electricity feed-in tariffs in European Union countries,” Energy Policy 52, no. 0 (2013) 385-401.

37

Canton, J. and Johannesson Lindén, A. “Support schemes for renewable electricity in the EU.” In Economic Papers: European Commission, 2010.

38

Ragwitz, M. et al. “Renewable energy policy country profiles.” Ecofys, Fraunhofer ISI, Energy Economics Group, Lithuanian Energy Institute, 2011.

39

See Art. 3 (b), Art. 119 (1) TFEU. ECJ, 171/83 (Commission v. France) [1983] ECR 2621, para. 9; von Wallenberg, G. and Schütte, M. “Art. 107 TFEU.” In Das Recht der Europäischen Union, edited by Grabitz, E., Hilf, M., and Nettesheim, M., 48th supplementary delivery. Munich: Beck, 2012, 10.

40

Cremer, W. “Art. 107 AEUV (ex Art. 87 EGV).” In EUV/AEUV, edited by Calliess, C. and Ruffert, M., 4th ed. Munich: Beck, 2011, 7.

41

Art. 107 (2) TFEU enumerates certain state aids considered compatible with the internal market (Art. 107 (2) TFEU, others can be considered compatible according to Art. 107 (3), 108 (2) subpara. 3, (3), 109 TFEU.

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towards sustainability of biomass importation

to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.” Notably, the sustainability criteria on their own cannot be construed as state aid. However, by making compliance with the sustainability criteria a requirement for certain support schemes, the question of whether the enumerated support schemes can be classified as state aid arises – and this potentially provides an explanation for which schemes were selected. For a measure to constitute state aid according to Art. 107 (1) TFEU, a benefit must have been awarded directly or indirectly by the state. These can be by public bodies at any level of public administration – central, regional or local – but also by private bodies established or appointed by the state to manage certain resources, making actions by private actors imputable to the state. 42 However, the ECJ has ruled in Preussen Electra that a federal law establishing a feed-in tariff did not amount to a state aid, as it did not involve state resources. 43 Thereby the mere legislation requiring certain actions of private actors appears to be excluded. 44 However, the judgment has been construed narrowly, and subsequently distinguished. Notably, the judgement cannot be read in a way that would allow Member States to circumvent state aid provisions through legislation on private operators who then levy para-fiscal charges. 45 In a subsequent case, the ECJ held that a law requiring private undertakings – under public service contracts – to collect animal waste and carcases was a state aid benefiting farmers and slaughterhouses, as the measure was financed by a tax incentive in turn financed by a levy on supermarkets. 46 Equally, the ECJ established in Wienstrom, that even where the budget of a Member State was not affected, the legislation on specific charges for consumers irrespective of them using the product and the collected charge is administered by funds under public control. 47 Accordingly, measures by private entities can be considered state aid where they happen under the control of the state. 48 In any case, tax incentives 42

ECJ, 76/76 (Steinike and Weinling v. Germany [1977] ECR 595; ECJ, 248/84 (Germany v. Commission) [1987] ECR 4013, para. 17; ECJ, Joined cases C-52/97 and C-54/97 (Viscido) [1998] ECR I-2629, 13; ECJ, C-482/99 (France v. Commission; Marine Stardust) [2002] ECR I-4397.

43

ECJ, C-379/98 (PreussenElektra) [2001] ECR I-2099.

44

Ekardt, F. and Schmeichel, A., “Erneuerbare Energien, Warenverkehrsfreiheit und Beihilfenrecht – Nationale Klimaschutzmaßnahmen im EG-Recht,” Zeitschrift für Europarechtliche Studien, no. 2 (2009) 171-218: 206.

45

Hancher, L., Ottervanger, T., and Slog, P. J., EU state aids, 4th ed. (London: Sweet&Maxwell, 2012), 3-017 foll. See also Ekardt, F. and Schmeichel, A., “Erneuerbare Energien, Warenverkehrsfreiheit und Beihilfenrecht – Nationale Klimaschutzmaßnahmen im EG-Recht,” Zeitschrift für Europarechtliche Studien, no. 2 (2009) 171-218: 208.

46 47

ECJ, C-126/01 (GEMO) [2003] ECR I-7139.

ECJ, C-384/07 (Wienstrom) [2008] ECR I-10393; Commission, N317A/2006 (Wienstrom) [2006] OJ C 221/6, para. 46-60.

48

See also ECJ, C-345/02 (Pearle) [2004] ECR I-7139.

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and investments will fall under this notion of state action. No variant of a renewable energy obligation exists where public control exceeds the legislative act, and for feed-in tariffs and premiums, this will depend on the design of the mechanism. Where a state measure cannot be demonstrated, Art. 107 (1) TFEU alternatively refers to a measure through state resources. Accordingly, state resources have to be transferred from public funds to the beneficiary. However, this transfer does not have to be direct. It is sufficient if the transfer is made through the para-fiscal charges under public control (see above), 49 showing that the distinction between state measures and measures affecting state resources is not always clean cut.50 Resources that are indirectly at the disposal of the state through state control and some form of contribution of the state to the measure in question are imputable to the state.51 A transfer of state resources is construed broadly, including actual or potential resources or revenues such as taxes or other charges imposing a cost to the state.52 Again, this definition encompasses tax incentives and investments, but cannot encompass renewable energy obligations. Thus, renewable energy obligations cannot constitute a state aid. For feed-in tariffs and premiums, this will depend on the design of the mechanism, notably the level of public control over the collection and distribution of funds.53 However, unlike tax incentives, they can easily be designed in a way not to fall under the definition of state aid, as the case of Preussen Electra shows. A further condition for a measure to constitute a state aid is that it has to favour certain undertakings54 or the production of certain goods. Such a selective advantage is awarded where the charges that an undertaking or production branch usually has to bear are alleviated through the measure.55 The undertaking receives a benefit translating to a value in money without providing adequate 49

ECJ, C-126/01 (GEMO) [2003] ECR I-7139. See also the categorisation of public control under both state measures and measures with effect on the public budget Hancher, L., Ottervanger, T., and Slog, P. J., EU state aids, 4th ed. (London: Sweet&Maxwell, 2012), 3-017 foll., 3-027.

50

See for example ECJ, Joined cases C-52/97 and C-54/97 (Viscido) [1998] ECR I-2629, para. 13; ECJ, C-345/02 (Pearle) [2004] ECR I-7139, para. 34.

51

ECJ, C-482/99 (France v. Commission; Marine Stardust) [2002] ECR I-4397, para 52 foll.

52

Hancher, L., Ottervanger, T., and Slog, P. J., EU state aids, 4th ed. (London: Sweet&Maxwell, 2012), 3-021 foll. with further references. Notably, ECJ, C-482/99 (France v. Commission; Marine Stardust) [2002] ECR I-4397. is interpreted as potentially not requiring a specific transfer of resources. Cremer, W. “Art. 107 AEUV (ex Art. 87 EGV).” In EUV/AEUV, edited by Calliess, C. and Ruffert, M., 4th ed. Munich: Beck, 2011, 29.

53

Ekardt, F. and Schmeichel, A., “Erneuerbare Energien, Warenverkehrsfreiheit und Beihilfenrecht – Nationale Klimaschutzmaßnahmen im EG-Recht,” Zeitschrift für Europarechtliche Studien, no. 2 (2009) 171-218: 210 foll.

54

An undertaking is a natural or legal person that offers goods or services on a market. See ECJ, 76/76 (Steinike and Weinling v. Germany [1977] ECR 595, para. 18; ECJ, C-35/96 (Commission v. Italy) [1998] ECR I-3851, para. 36; ECJ, C-475/99 (Glöckner) [2001] ECR I-8089, paras. 19 foll.

55

ECJ, C-310/99 (Italy v. Commission) [2002] ECR I-2289, 51.

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compensation (private investor test).56 Notably, the benefit has to be specific: the benefit of undertakings in general is covered, but only certain undertakings. In comparison with the criterion for the “production of goods”, which is aimed at entire production branches, “certain undertakings” has to be construed as individual operators within a production branch: the measure has to be selective,57 or the naming of both undertaking and production branches would be obsolete. However, this is not the case for support schemes for renewable energy, which apply to the entire renewable energy sector without singling out individual companies. Accordingly, feed-in tariffs or premiums would have to be considered as selectively favouring some production branches over others. Renewable energy production (as a branch) is awarded a benefit over other energy production through the support scheme. While the classification of renewable energy obligations was already excluded as a state aid according to Art. 107 (1) TFEU, the case might be different for feed-in tariffs and premiums. However, this is where the limitation on the financial support to the consumption of renewable energy according to Art. 17 (1) (c) RED comes to play. Art. 107 (1) TFEU applies to the support for the production of certain goods. The sustainability criteria however only apply to the consumption of renewable energy. This suggests that Art. 17 (1) (c) RED was drafted with the requirements of Art. 107 (1) TFEU in mind. Moreover, it could even be considered that renewable energy support schemes could never distort or threaten to distort the internal market. Renewable energy support could just be seen as an instrument to compensate for the external costs of fossil fuels, notably the cost of climate change, which is currently not taken into account. Thus, support schemes could even be considered as an instrument to establish a fair internal energy market, rather than to distort it.58 Notably, the broad definition of the term ‘support schemes’ in Art. 2 (k) RED and the freedom to choose the support system under the national renewable action plan (Art. 4 RED) shows that RED does not intend to preclude Member States from choosing other support schemes. Thus, the EU state aid regime or the more broadly framed WTO subsidy regime can still apply at the national level. (see below, Ch. 11).

56 57

ECJ, C-305/89 (Alfa Romeo) [1991] ECR I-1603, paras. 19 foll.

ECJ, C-295/97 (Piaggio) [1999] ECR I-3735, para. 39; ECJ, C-409/00 (Spain v. Commission) [2003] ECR I-3671, 32 foll.

58

Ekardt, F. and Schmeichel, A., “Erneuerbare Energien, Warenverkehrsfreiheit und Beihilfenrecht – Nationale Klimaschutzmaßnahmen im EG-Recht,” Zeitschrift für Europarechtliche Studien, no. 2 (2009) 171-218: 216.

58

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scope of application

2.3 Analysis

Only biomass used for biofuels and bioliquids is subject to the sustainability requirements, representing a fraction of just one of the renewable energy sources. In Germany in 2010, liquid biomass had a share of final energy consumption of 0.3% in the electricity sector, 0.3% in the heating sector and 5.8% of transport fuel.59 Thus, the vast majority of bioenergy or renewable energy need not be produced according to sustainability criteria, even though the environmental impact and land use conflicts of solar, geothermal or wind can also be considerable. Equally, other uses such as for food and feed or as a building material are not covered by the sustainability criteria. This severely limits the potential of the sustainability criteria for reinforcing national standards in resource states, or general principles at international law level. Where environmental standards in the sustainability criteria are higher than those at international or national law level, the positive impact of the sustainability criteria therefore has to rely on dispersion effects, expanding environmental provisions into other areas beyond this narrow scope of application on other uses of biomass. Where such dispersion takes place in the national law of the resource state, it is then met with the same problems as described in section 1.2.4, facing the challenges of drafting stringent environmental standards and ensuring their enforcement. Furthermore, the sustainability criteria only apply to selected support schemes, probably in order to promote the creation of support schemes that do not fall under the subsidy regime. However, non-compliant biomass is still eligible for other support schemes not covered by Art. 17 (1) (b), (c) RED, potentially leading to a shift of non-compliant biomass to uses covered by these other support schemes. On the other hand, the incentive to the Member States to minimise this displacement is strong: only compliant biofuels and bioliquids can be counted towards the national targets according to Art. 17 (1) (a) RED. This provides an incentive to expand the scope of application to support schemes beyond the scope of Art. 17 (1) (b), (c) RED to all support mechanisms. Moreover, it may foster harmonisation in Member States’ support schemes focussing on renewable energy obligations and financial support for the consumption of renewable energy, at least in the biomass sector. By applying the sustainability criteria both to national targets and to national support schemes, the European Union has encouraged the use of those support schemes in achieving those targets. Accordingly, the limitation on the scope of the support schemes covered is partially alleviated in that Member States are held to the sustainability criteria in order to achieve their national targets. Notably, the sustainability criteria do not ban the production or import of “unsustainable” produce but only discourages its consumption. RED relies on market mechanisms, by considering that biomass which is considered compli59

Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit (BMU). “Erneuerbare Energien in Zahlen – nationale und internationale Entwicklung.” Berlin, 2011, 12.

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ant by a reliable compliance control mechanism can be sold at a premium price, providing another incentive to comply (recital 76 RED). Thus, the sanctioning is softer than for example in the forestry sector (i.e. for solid biomass), where Regulation 995/2010 prohibits illegally harvested timber and derived products – both imported and domestically produced – from being placed on the EU market.60 Thus, the import of solid biomass, even for energy purposes, is governed by much stricter sanctioning mechanisms than biofuels and bioliquids. Equally, the US Lacey Act 1900 as amended by the s. 8204 Food, Conservation and Energy Act 2008, forbids trade in illegally sourced plants and plant products, which encompasses bioenergy and raw materials for energy production.61 Considering the limited scope of application, the sustainability criteria cannot avoid displacement effects of “dirty” biomass. Nonetheless, the ECJ has considered in the context of equal treatment that EU institutions benefit from a margin of appreciation when introducing a new legislative scheme. In its case on the emission trading system, the ECJ allowed for the step-by-step inclusion of different industrial sectors. It affirmed a broad margin of discretion of the legislature in making complex choices on political, economic and social issues, in particular when restructuring or establishing a novel and complex system. However, the ECJ will, in the light of the principle of equal treatment, assess whether the choice is based on objective criteria, in particular all facts and the available technical and scientific data, if all interests involved are fully taken into account and if the choice is appropriate (read proportionate) to the aim pursued.62 Bioenergy, in its modern use, is a novel technology, which is still undergoing considerable technological developments, as the evolution from first– to second–generation biofuels shows. Moreover, the sustainability criteria introduce a novel first step in recognising the environmental side effects of environmental or in this case climate change policy. The drafting of the criteria was preceded and accompanied by scientific research, for example by the Commission’s Joint Research Centre (JRC) and contains further reporting requirements allowing for it to be adapted once knowledge on the issue is expanded further. The sustainability criteria apply to an area of bioenergy where problems were considered particularly prominent, and represent first steps in expanding the concept of limiting environmental policies for environmental concerns. Accordingly, as for the step-by-step approach taken in the European Emission Trading System, the initial limitation of the scope appears justified.

60

European Parliament and Council, Regulation (EU) n. 995/2010 laying down the obligations of operators who place timber and timber products on the market, OJ [2010] L 295/23.

61

The Lacey Act was originally used to prevent illegally captured or prohibited animals crossing state lines of, but is today also used to prevent importation or spread of non-native species. The Reform by s. 8204 expanded the scope to the prevention of illegal logging practices.

62

ECJ, C-127/07 (Société Arcelor Atlantique et Lorraine) [2008] ECR I-9895, para. 57 foll.

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The Greenhouse Gas Emission Balance

chapter 3

the greenhouse gas emission balance

Besides the issue of energy security caused by limited fossil fuels and import dependency, the main driver for the use of renewable energy, including bioenergy, is the mitigation of climate change. However, when taking into account the entire life cycle of biomass from cultivation to combustion, the GHG emission balance of bioenergy might not in fact be better than the climate balance of fossil fuels. Accordingly, the production of bioenergy in the scope of the sustainability criteria has been regulated in order to ensure a negative carbon balance (i.e. beneficial for the stability of the climate). By ensuring the contribution of biofuels and bioliquids to climate change mitigation, the protection of biodiversity is achieved incidentally, as the stability of temperatures and the prevention of severe weathers due to of climate change means that climate change does not pose an additional risk to biodiversity. Art. 17 (2) RED prescribes a certain GHG emission balance compared to fossil fuels, which is calculated according to the method contained in Art. 19 (1), Annex V RED. This chapter addresses the impact of the GHG emission requirements on the contribution of biofuels and bioliquids to climate change mitigation, and incidentally to the protection of biodiversity.



3.1 The level of greenhouse gas emission savings

Art. 17 (2) RED requires biofuels and bioliquids to show a GHG emission balance that is progressively lowered compared to fossil fuels. Savings are calculated by comparing the total carbon footprint of the biofuel with the total carbon footprint of an appropriate fossil fuel comparator.



3.1.1 The benchmark

In order to benefit from certain national support schemes and to be counted towards the national renewable energy target (Art. 17 (1) RED), a progressive emission reduction has to be reached. Until 2017, the emission saving shall be at least 35% for biofuels and bioliquids compared to fossil fuels, and 50% thereafter. A more stringent reduction is introduced for installations that start production in or after 2017. From 2018, they have to abide by a 60% reduction target (Art. 17 (2) RED). In addition, the Fuel Quality Directive 98/70/EC (FQD), which has mirrored the sustainability criteria, has also adopted a mandatory target of 6% reduction of GHG intensity of transport fuels overall by 2020 (Art. 7a (2) (a) FQD).1 Notably, these reduction requirements do not address the absolute emissions, but only require a certain percentage reduction. Any energy use reaching the benchmark is compliant with the GHG 1

European Parliament and Council, Directive 2009/30/EC amending Directive 98/70/EC as regards to the specification of petrolium, diesel and gas oil and introducing a mechanism to monitor and reduce greenhouse gas emissions and amending Council Directive 1999/32/EC as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/EEC, OJ [2009] L 140/88.

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balance requirement of Art. 17 (2) RED. Thus, the effectiveness of the end use is not part of the equation,2 disregarding the better climate balance of heating and electricity compared to transport fuels – so although replacement of fossil fuels for transport is beneficial, it may be more beneficial if the same biomass were used for heating instead. There are of course broader market and technical factors that might prohibit this straightforward substitution, and there may be benefits to introducing biofuels in less efficient uses nonetheless, for example promoting technological or market changes. The effectiveness of the end use could be considered if rather than simply calculating efficiency as a relative GHG emission reduction, it could be seen from the perspective of limiting factors such as the available biomass, land area or monetary cost.3 Besides methodological questions, the benchmark level of 35% appears unchallenging. Considering the variety of targets suggested by the committees of the European Parliament, it appears to be based not only on technical feasibility, but also on political will:4 the leading committee ITRE (Industry, Research and Energy) had suggested a 45% threshold.5 Moreover, the emission reduction targets do not apply immediately. Biofuels and bioliquids produced by installations that were in operation on 23 January 2008, the date of the publication of the Commission proposal, are exempt from the GHG emission saving requirements until 1 April 2013 (Art. 17 (2) subpara. 4 RED). Installations that began production after 23 January 2008 cannot call on confidence in the pre-existing legal situation to exempt them from the GHG balance requirements. The deadline of 1 April 2013 allowed installations time to adapt their process.6 The exemption is very far reaching: it is sufficient if one processing installation along the production chain was in operation on 23 January 2008. However, the exemption shall not be used abusively: it does not apply to production facilities added intentionally to the production process to qualify.7 However, it is not clear how the potential intent is to be established. Thus, abuse cannot be excluded. 2

Soimakallio, S. and Koponen, K., “How to ensure greenhouse gas emission reductions by increasing the use of biofuels? – Suitability of the European Union sustainability criteria,” Biomass Bioenerg. 35, no. 8 (2011) 3504-3513: 3510.

3

Schlamadinger, B. et al. “Optimizing the greenhouse gas benefits of bioenergy systems.” Paris: 14th European Biomass Conference, 2005; Soimakallio, S. et al., “Greenhouse gas balances of transportation biofuels, electricity and heat generation in Finland—Dealing with the uncertainties,” Energy Policy 37, no. 1 (2009) 80-90.

4

Ludwig, G., “Nachhaltigkeitsanforderungen beim Anbau nachwachsender Rohstoffe im europäischen Recht,” Zeitschrift für Umweltpolitik und Umweltrecht (2009) 317-321: 318.

5

European Parliament – Committee on Industry Research and Energy (ITRE), Report on the proposal for a Directive of the European Parliament and of the Council ont he promotion of the use of energy from renewable sources, A6-0369 [2008], amendment 149.

6

Commission, Communication on the practical implementation of the EU biofuels and bioliquids sustainability scheme and on counting rules for biofuels, OJ [2010] C 160/02, 3.1.

7

Ibid.

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Overall, the initial emission reduction target appears limited, but will be much more stringent in the future. The threshold is to be reviewed by the Commission by 31 December 2014 (Art. 23 (8) RED). Moreover, the obligation of the Commission to report on the GHG emission savings, using values reported by the Member States under Art. 23 (4) RED suggest further amendments. Notably, a Commission proposal seeking to amend RED seeks to introduce a more stringent benchmark of 60% for operations that become operational on or after 1st July 2014.8



3.1.2 The fossil fuel comparator

In order to assess the emission reduction as a percentage, biofuels and bioliquids have to be held against a fossil fuel comparator (see Annex V C n. 4 RED), and the emissions from the latter must be calculated. The choice of fossil reference system strongly affects the result. Even though the variation is lower than for biofuels, there is variation in the GHG balance of fossil fuels (around 15%).9 If natural gas is chosen, the reduction is much less than against a coal basis.10 Moreover, the choice of a higher comparator would make it easier to comply with the 35% reduction target. Under RED, the fossil fuel comparators for biofuels, i.e. the transport sector, are diesel and petrol, which make up the overwhelming majority of transport fuels (Art. 19 (1), Annex V n. 19 RED). The calculation of the carbon footprint of fossil fuels poses similar challenges to the calculation for biofuels and bioliquids: in accounting for the fossil fuel balance, potentially significant indirect impacts of fossil fuels such as access roads, oil sand production etc.11 – and their reduction by a minor amount of biofuels – will have to be addressed.12 The RED does not contain any specific provisions on fossil fuels, but refers to the Fuel Quality Directive (FQD) for the calculation of the emission balance of fossil fuels (Annex V C n. 19 RED). Until an emission value according to the FQD becomes available, the value 83.8 gCO2eq/MJ shall be used for transportation fuels. Under RED, the comparator is defined to be the latest available actual average emission for the fossil part of diesel and petrol consumed in the EU as 8

Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012], Art. 2 n.

9

Edwards, R., Larivé, J.-F., and J.-C., B. “Well-to-wheels analysis of future automotive fuels and powertrains in the European Context – Well-to-Wheels Report Version 3c.” Ispra: JRC, 2011.

10

Wissenschaftlicher Beirat der Bundesregierung Globale Umweltveränderungen (WBGU), Future bioenergy and sustainable land use (London: Earthscan, 2009), 182.

11

Liska, A. J. and Perrin, R. K., “Indirect land use emissions in the life cycle of biofuels: regulations vs science,” Biofuels, Bioproducts and Biorefining 3, no. 3 (2009) 318-328.

12

Soimakallio, S. and Koponen, K., “How to ensure greenhouse gas emission reductions by increasing the use of biofuels? – Suitability of the European Union sustainability criteria,” Biomass Bioenerg. 35, no. 8 (2011) 3504-3513: 3510.

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reported under the FQD (Annex V n. 19 RED).13 This value is within the range of figures that have been established in recent studies such as the Well-to-Wheels reports for the European Commission,14 which range from 83.3 to 87.3 gCO2eq/ MJ for the life cycle of fossil diesel.15 However, the reference value is at the lower end of the range. Accordingly, the emission savings achieved by biofuels are estimated as less than in other scenarios (and thus requiring greater efforts to achieve the specified GHG balance). Nonetheless, the choice of the reference value remains scientifically sound as it is within the margins established in these studies. However, newer studies may lead to an adaptation of the reference value, in particular through the FQD, as new studies show a higher emission impact of fossil fuel. The most recent 2011 Well-to-Wheels report calculated a comparator of 87.6 gCO2eq/MJ for petrol, 89.2 gCO2eq/MJ for diesel.16 Considering that the 2011 draft Directive laying down calculation methods and reporting requirements pursuant to Directive 98/70/EC seems to have stalled after no opinion was issued by the Committee on Fuel Quality,17 as it has not yet been officially debated by the European Parliament and Council. The issue can be presumed to be still under debate among scientists and policy makers.18 For bioliquids for electricity, heating and co-generation, no fossil fuel comparator has been given, reflecting the greater variety of energy sources for electricity and heating. The reference values for these uses have been set at 91 gCO2eq/MJ, 77 gCO2eq/MJ and 85 gCO2eq/MJ respectively, giving credit to different uses’ energy efficiency (Annex V C n. 19 RED). While some data, albeit not conclusive, is available for transport fossil fuels, the need for scientific research is even greater in the area of heating and electricity. Without reliable reference values, the GHG emission savings achieved through biofuels and bioliquids cannot be estimated accurately. Moreover, since the variations in GHG emission savings depend on the choice of reference value, emission savings by biofuels and bioliquids can only be relative. Thus, the reference value 13

See Commission, Draft Directive .../.../EU laying down calculation methods and reporting requirements pursuant to Directive 98/70/EC relating to the quality of petrol and diesel fuels, COM [2011] yyy final.

14

See for example Edwards, R. et al. “Well-to-wheels analysis of future automotive fuels and powertrains in the European context, Version 2c.” edited by Joint Research Centre (JRC), CONCAWE, and EUCAR, 2007; Silva, C. M. et al., “A tank-to-wheel analysis tool for energy and emissions studies in road vehicles,” Sci. Total Environ. 367, no. 1 (2006) 441-447.

15

Pehnelt, G. and Vietze, C. “Uncertainties about the GHG emissions of rapeseed biodiesel.” Jena: Friedrich Schiller University, Max Planck Institute of Economics,, 2012, 11. On palm oil, see also Pehnelt, G. and Vietze, C. “Recalculating default values for palm oil.” Jena: Friedrich Schiller University, Max Planck Institute of Economics, 2011.

16

Edwards, R., Larivé, J.-F., and J.-C., B. “Well-to-wheels analysis of future automotive fuels and powertrains in the European Context – Well-to-Wheels Report Version 3c.” Ispra: JRC, 2011, 25.

17

Committee on Fuel Quality, Committee meeting on Fuel Quality 23 February 2012, CMTD (2012) 0166 [2012].

18

Commission, Draft Directive .../.../EU laying down calculation methods and reporting requirements pursuant to Directive 98/70/EC relating to the quality of petrol and diesel fuels, COM [2011] yyy final.

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is as crucial as the calculation of the GHG balance for the biofuel or bioliquid, if the impact on climate change mitigation shall be truly assessed. Accordingly, continued research and regulation is required on the matter.



3.2 The calculation of the GHG balance

The GHG balance of biofuels and bioliquids is to be assessed in a life cycle assessment (LCA), which addresses the entire process from cultivation to consumption, in the case of transport fuels dubbed “from well to wheel”.19 The calculation can be undertaken individually, i.e. based on actual values, or by reference to predetermined standard values, so called “default values” contained in RED, or a mix of both (Art. 17 (3) subpara. 3; 19 (1); Annex V RED).



3.2.1 Life cycle assessment

The life cycle assessment (LCA) provides a methodological framework for estimating the total environmental impacts of an activity through its lifecycle,20 adding different emission states and subtracting emission reductions.



3.2.1.1 The life cycle

The LCA under RED does not extend to environmental impacts overall, but is limited to GHG emissions. Pollution caused during the production process that is not linked to GHG emissions, such as waste water,21 is not considered. The total GHG emissions in grams of CO2 equivalent per MJ of fuel (gCO2eq/MJ)22 from the production and use of biofuels and bioliquids – as well as non-biogenic transport fuels (see above, section 3.2.1) – is calculated by adding together the emissions from the extraction or cultivation of raw materials, annualised emissions from carbon stock changes caused by land use change, emissions from processing, from transport and distribution, and from the fuel in use (which are however considered zero for biofuels and bioliquids, Annex V C n. 6 to 13 RED). 19

See for example Edwards, R., Larivé, J.-F., and J.-C., B. “Well-to-wheels analysis of future automotive fuels and powertrains in the European Context – Well-to-Wheels Report Version 3c.” Ispra: JRC, 2011.

20 21

ISO, ISO 14040 – Environmental management – Life cycle assessment – Principles and framework [2006].

See for example de Fraiture, C. and Berndes, G. “Biofuels and water.” In Biofuels: Environmental consequences and interactions with changing land use, edited by Howarth, R. W. and Bringezu, S., 139-153. Ithaca: Cornell University, 2009.

22

The GHG emission is expressed in CO2-equivalents (CO2eq). For the purposes of the life cycle assessment, CO2, N2O and CH4 are taken into account. N2O is set at 296 CO2, CH4 at 23 CO2 (Annex V C n. 5 RED).

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Emission savings are subtracted, in particular the soil carbon accumulation via improved agricultural management, from carbon capture and geological storage, or replacement and emission saving from excess electricity from cogeneration, but also efficiency gains such as the use of co-products (Annex V C n. 14 to 18 RED). A bonus is awarded for the use of degraded land (Annex V C n. 7 RED). GHG emissions from the production of machinery, infrastructure, buildings or production installations are not taken into account (Annex V C n. 1 RED).



3.2.1.2 The calculation pathways

The GHG emission balance of biofuels and bioliquids can be calculated in three different ways. Economic operators can calculate the actual values of different stages along the life cycle using the methodology in Annex V C RED (Art. 19 (1) (b) RED). In order to limit the administrative burden of the LCA, Annex V RED contains default values and disaggregated default values that may be factored into the calculation. Where the biofuel or bioliquid did not cause emissions through land use change, the default values in Annex V A, B RED can be referred to, subject to further conditions (Art. 19 (1) (a); (3) RED). Finally, disaggregated default values (Annex D, E RED) may be used in combination with actual values (Art 19 (1) (c) RED), in particular on processing, transport and distribution.



3.2.1.3 Default values and disaggregated default values

Actual values, determining the GHG emission savings by one or several steps along the life cycle, have to be calculated individually according to the methodology of Annex V C RED (Art. 2 (m) RED). Default values are values “derived from typical values by the application of pre-determined factors” (Art. 2 (o) RED). Annex V RED contains default values and disaggregated default values for biofuels (Annex V A, D RED). Default and disaggregated values have also been calculated for future biofuels or biofuels whose market share was negligible in January 2008, i.e. second generation biofuels (Annex V B, E RED). The typical and default values only apply to biofuels, whereas the disaggregated default values also apply to bioliquids. Moreover, default values only apply to biofuels produced without net carbon emissions from land use change (Art. 19 (1) (a) RED). Where emissions from land use change occur, the GHG emission balance has to be determined by calculating actual values or by recurring to disaggregated standard values subject to further conditions (see below). Default values are based on three elements: a scientific data set, the methodology in Annex V C RED, and a rule for transforming typical values into default values.23 Typical values, also contained in Annex V A, B, D, E RED, are 23

Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01, 3.1.

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“an estimate of the representative GHG emission saving for a particular biofuel production pathway” (Art. 2 (n) RED).24 The scientific data for a particular biofuel/bioliquid production pathway are processed in accordance with the methodology in Annex V C RED to produce a typical value for the pathway. A factor of + 40 % is then applied to the emissions from the ‘processing’ element to transform typical values into default values. No such factor is applied to ‘transport and distribution’, because its contribution to the overall emissions is considered small (compare Art. 19 (7) (a) RED) and to ‘cultivation’ for which the use of default values is currently restricted (see Art. 19 (2) to (4) RED).25 According to the Commission, the default values are set a conservative level in order to make it unlikely that default values are better than economic operators’ actual values.26 Default values for biofuels and disaggregated default values for biofuels and bioliquids of the second generation are contained in Annex V B, E RED. Default values for first generation biofuels and disaggregated default values for first generation biofuels and bioliquids for ‘cultivation’ (not for ‘processing’ and ‘transport and distribution’) can only be applied in three cases (Art. 19 (3 ); Annex V A, D RED): firstly, the values apply to raw materials that have been cultivated in areas where the classification under the nomenclature of territorial units for statistics (NUTS) predicts that the emissions from cultivation will be lower than the disaggregated default value in Annex V D RED (Art. 19 (3) (b); (2) RED). Secondly, the default values apply to wastes or residues other than agricultural (Art. 19 (3) (c) RED). Finally, default values and disaggregated default values for cultivation can also apply to raw materials cultivated outside the EU (Art. 19 (3) lit. c RED). Accordingly, default values apply generally to feedstock from third countries, while for domestic produce, a calculation of actual values will often be necessary. However, this limitation on the use of default values to these categories would be removed under a recent Commission proposal, which seeks to amend Art. 19 (3) RED to “the typical greenhouse gas emissions from cultivation of agricultural raw materials [in the reports by Member States on areas classified as level 2 in the NUTS] and reports equivalent to those in the case of territories outside the Union, may be submitted to the Commission.”27 Thereby, the competence to update typical and default values in Annex V RED conferred to the Commission in Art. 19 (V) RED increases considerably in weight. 24

Economic operators cannot make reference to these typical values directly, which are for Member States in their two-yearly reports to the Commission on their progress in achieving their renewable energy targets (Art. 22 (2) RED).

25

Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01, 3.1.

26 27

Ibid., 3.

Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012], Art. 2 N. 7.

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For raw materials imported from third countries, the European Commission was required to submit a report on the feasibility of lists of areas in third countries where emissions from cultivation are lower than the disaggregated default values in Annex V D RED (Art. 19 (4) RED) – much like the NUTS lists for raw materials from within the EU. However, this has not yet been effected: in its report, the Commission has stated that emissions from cultivation are surrounded by great uncertainty and that in particular, lists could not be drafted without the contribution of the exporting countries.28



3.2.1.4 Adaptation to technical and scientific progress

The methodology seeks to take all factors affecting energy from biomass into account. However, some issues in the LCA are not yet fully understood, such as land use changes or complex production and processing paths. Different biofuels have very different life cycles and emission values, 29 and the complexity of these different production and distribution paths is difficult to model. Accordingly, different methods are available to allocate the environmental impact to different products, with considerable impacts on the end result.30 Thus, different studies come to very different results for default values – diverging in both directions from the RED default values – because of factors such as different spatial boundary setting, timing, allocation procedure, parameter assumptions or case-specific figures.31 28

Commission, Report on the feasibility of drawing up lists of areas in third countries with low greenhouse gas emissions from cultivation, COM [2010] 427 final, 5.

29

Edwards, R., Larivé, J.-F., and J.-C., B. “Well-to-wheels analysis of future automotive fuels and powertrains in the European Context – Well-to-Wheels Report Version 3c.” Ispra: JRC, 2011.

30

Finnveden, G. et al., “Recent developments in life cycle assessment,” J. Environ. Manage. 91, no. 1 (2009) 1-21; Ekvall, T. and Finnveden, G., “Allocation in ISO 14041—a critical review,” J. Clean. Prod. 9, no. 3 (2001) 197-208; ISO, ISO 14040 – Environmental management – Life cycle assessment – Principles and framework [2006]. The Edwards, R., Larivé, J.-F., and J.-C., B. “Well-to-wheels analysis of future automotive fuels and powertrains in the European Context – Well-to-Wheels Report Version 3c.” Ispra: JRC, 2011. measures emissions in g CO2eq/km), kg CO2eq/ (ha*year): 660 for wheat, 4,429 for sugar beet, 1,505 rapeseed, 1,545 for sunflower, 4,806 for farmed wood for biodiesel production; Fritsche, U. “Stoffstromanalyse zur nachhaltigen energetischen Nutzung von Biomasse.” Darmstadt: Öko-Institut, 2004. study gives different ranges of GHG savings in terms of Kg CO2ea/ha*year: 800 to 3,700 for bioethanol from wheat, 3,000 to 11,000 for bioethanol from sugar beet; 500 to 2,800 for bio-diesel from rapeseed and 1,500 to 4,000 for biodiesel from sunflower. Worldwatch Institute, Biofuels for transport – Global potential and implications for sustainable energy and agriculture (London: Earthscan, 2007).: biofuels even with life cycle assessment better than petrol fuels. However, none of these studies take into account land conversions!

31

Soimakallio, S. and Koponen, K., “How to ensure greenhouse gas emission reductions by increasing the use of biofuels? – Suitability of the European Union sustainability criteria,” Biomass Bioenerg. 35, no. 8 (2011) 3504-3513: 3506. Suggesting political influence for the example of rapeseed is Ludwig, G., “Nach-

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Accordingly, Art. 19 (7) RED stipulates that Annex V RED, i.e. the methodology, default values and disaggregated default values, shall be adapted to technical and scientific progress. In particular, the default values and disaggregated default values concerning new biofuels and bioliquids are not considered final, but shall be adapted based on a biannual Commission report (Art. 19 (5) RED). In the same way, the methodology for estimating indirect land use change is to be based on the “best available scientific evidence” (Art. 19 (6) RED). The Directive suggests that amendments are most likely on waste and residues, co-products potentially including agricultural residues and cogeneration (Art. 19 (7) subpara. 2 RED). While no timeframe is given on the adaptation to technical and scientific progress in general in the RED, the review shall be conducted biannually, according to a Commission communication,32 coinciding with the Commission reporting requirements on GHG emission savings (Art. 23 (8) RED). Moreover, the Commission Communication describes the conditions according to which general and specific pathways will be added to the catalogue. New default values for additional general pathways shall be introduced if these are or can be expected to be significant for the EU market and if the relevant data available is of satisfactory quality and certainty as judged by independent experts.33 For the introduction of specific pathways, the difference between the default values for the specific and general pathways has to be significant. Stakeholders can suggest amendments of the pathways or the introduction of new pathways, and the data published on the JRC website34 is open to comments “with scientifically justified claims”. Moreover, experts can be contacted directly in order to enable review as appropriate during the next cycle of updates (see recital 83 RED).35 The Commission does not intend to introduce specific pathways according to geographical origin (which would be contentious under WTO law, see below, Ch. 11); pathways must relate to specific practices, technologies etc.36 Accordingly, methodology and default values are openly subject to amendments and the conditions for the introduction of new default values clarified, even though only in a non-binding Communication. The adaptation clause of Art. 19 (7) RED provides that the regulatory framework for the calculation methodology and default values can evolve alongside scientific and technological progress. According to Art. 19 (5) (7), 25 (4) RED regarding the adaptation to technical and scientific progress, an implementing haltigkeitsanforderungen beim Anbau nachwachsender Rohstoffe im europäischen Recht,” Zeitschrift für Umweltpolitik und Umweltrecht (2009) 317-321: 318. 32

Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01.

33

Ibid., 3.2.

34 35

http://re.jrc.ec.europa.eu/biof/html/input_data_ghg.htm (30/2/2012).

Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01, 3.2.

36

Ibid.

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act establishing abstract general rules shall be undertaken by the Commission recurring to specialised committees, the so called Comitology Process. For this purpose, a special committee on the sustainability of biofuels and bioliquids has been set up pursuant to Art. 25 (2) RED). Comitology is a procedure according to which the Commission drafts implementing acts based on secondary legislation, forming tertiary law.37 It was established based on Art. 202 al. 3 TEC through the Council’s Comitology Decisions,38 creating an institutionalised solution to balancing supra-national and Member State interests with technological and scientific challenges.39 The decisions established different procedures according to which the Commission was supported in stipulating implementing regulation by expert committees as well as the European Parliament and the Council. 40 There were four different procedures: the advisory procedure, the management procedure, the regulatory procedure and the regulatory procedure with scrutiny, which were characterised by a varying degree of influence of the committee, the European Parliament and the Council. Art. 25 (4) RED refers to the regulatory procedure with scrutiny (Art. 5a Decision 1999/468). When this procedure is applied to basic acts adopted under the co-decision procedure (Art. 251 TEC, now ordinary procedure, Art. 294 TFEU) such as RED, the European Parliament and the Council could both oppose implementing regulation after the committee stage. It was introduced to strengthen the participatory rights of the European Parliament in order to increase legitimacy of implementing regulation. 41 Besides, legitimacy can be drawn ex ante from the basic act (in this case RED), which has to contain the essential elements for the regulated matter, even though discretion is awarded. 42 37

Haibach, G., Separation and delegation of legislative powers: a comparative analysis, ed. Andenas, M. T. and Türk, A., Delegated legislation and the role of committees in the EC (The Hague: Kluwer 2000), 66.

38

Council, Decision 1999/468/EC laying down the procedures for the exercise of implementing powers conferred on the Commission, OJ [1999] L 184/23. as amended by Council, Decision 2006/512/ECamending Decision 1999/468/EC laying down the procedures for the exercise of implementing powers conferred on the Commission, OJ [2006] L 200/11.

39

Joerges, C. and Neyer, J., “From intergovernmental bargaining to deliberative political processes: the constitutionalisation of comitology,” European Law Journal 3, no. 3 (1997) 273-299. On the current challenges of institutional balance, see Brandsma, G. J. and Blom-Hansen, J. “The post-Lisbon battle over comitology: another round of the politics of structural choice.” Florence: European University Institute, 2011.

40

Blom-Hansen, J., “The EU Comitology system: taking stock before the new Lisbon regime,” J. Eur. Public Policy 18, no. 4 (2011) 607-617.

41

Schusterschitz, G. and Kotz, S., “The comitology reform of 2006: increasing the powers of the European Parliament without changing the treaties,” European Constitutional Law Review 3, no. 1 (2007) 68-90.

42

ECJ, 25/70 (Köster) [1970] ECR 1161, para. 6; ECJ, C-240/90 (Germany v. Commission) [1992] ECR I-5383, 37 foll. , 2005 #1286. See also Art. 290 (1) Subpara. 2 s. 2 TFEU. Besides, the recurrence to expert committees can generate output legitimacy. Huster, S., Europapolitik aus dem Ausschuss: Innenansichten des Ausschusswesens der EU (Wiesbaden: VS research, 2008), 293 foll.

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Nonetheless, the Comitology process was criticised for its complexity, the lack of transparent decision making and shortcomings in democratic legitimacy. 43 The process has been substantially reformed under the Treaty of Lisbon, which differentiates between delegated legislation (Art 290 TFEU) and implementing legislation (Art. 291 TFEU). 44 According to Art. 290 TFEU, the Commission may be transferred the competence to adopt non-legislative acts45 to supplement or amend non-essential elements of the basic act (delegated legislation). Art. 291 (2) to (4) TFEU makes an exception to the general competence of the Member States to implement EU law (Art. 291 (1) TFEU), the Commission can be conferred the competence to adopt implementing acts where a uniform implementation is necessary. Expert committees are only involved in the drafting of implementing acts, not delegated acts. The Comitology decisions have been mainly repealed and replaced by Regulation 182/2011, 46 which lays down rules for the implementing powers of the Commission according to Art. 291 (3) TFEU, perpetuating the Comitology system with some changes. Notably, the Regulation thereby goes beyond the requirements of Art. 291 TFEU, which does not foresee participation rights of European Parliament or Council. The balance of the different institutions is very different for delegated acts within the scope of the delegation enacted by the Commission alone. 47 The influence of European Parliament and Council is reduced to the revocation of the delegation or an objection to the draft delegated act (Art. 290 (2) TFEU), even though no limitation is placed on the grounds for

43

See Brandsma, G. J. “Accountable comitology?”. Chap. 7 In The Real World of EU Accountability: What Deficit?, edited by Bovens, M., Curtin, D., and Hart, P. T., 150-173, 2012. See also Winter, G., “Kompetenzverteilung und Legitimation in der Europäischen Mehrebenenverwaltung,” Europarecht 40, no. 3 (2005) 255-276: 268. For a comprehensive discussion of legitimacy of comitology decisions, see Hofmann, H., Rowe, G. C., and Türk, A., Administrative law and policy of the European Union (Oxford: Oxford University Press, 2011), 281 foll.

44

On the developments leading to the reform, see Blom-Hansen, J., “Interests, instruments and institutional preferences in the EU Comitology system: the 2006 Comitology reform,” European Law Journal 17, no. 3 (2011) 344-365. See also Schütze, R., “From Rome to Lisbon: “executive federalism” in the (new) European Union,” Common Market Law Review 47, no. 5 (2010) 1385-1427.

45

The term non-legislative act clarifies that the act was not taken according to a legislative procedure according to Art. 15 (2), 289 III TFEU. It does not mean that delegated legislation would not be binding. Driessen, B., “Delegated legislation after the Treaty of Lisbon: an analysis of Art. 290 TFEU,” European Law Review 35, no. 6 (2010) 837-848: 844.

46

European Parliament and Council, Regulation (EU) n. 182/2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers, OJ [2011] L-55/13.

47

Commission, Communication on the implementation of Article 290 of the Treaty on the Functioning of the European Union, COM [2009] 673 final.

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the objection. 48 Accordingly, a clear-cut differentiation has to be made between the mutually exclusive delegated and implementing acts. 49 With the introduction of Art. 290 TFEU, the regulatory procedure with scrutiny is now considered obsolete.50 This would suggest that implementing regulation on technical and scientific process according to Art. 19 (5), (7) RED would now be treated as delegated legislation according to Art. 290 (1) TFEU. However, Art. 12 Regulation 182/2011 stipulates that the regulatory procedure with scrutiny still applies to legislative acts adopted before the Treaty of Lisbon, which includes RED. Accordingly, the regulatory procedure with scrutiny still applies to the – abstract, general – adaptation of the GHG emission criteria to scientific and technological progress according to Art. 19 (5), (7) RED. In particular considering the strong influence of the GHG calculation methodology on compliance with the sustainability criteria, expert advice appears beneficial. However, it seems likely that advice would nevertheless be sought if the institutional structures of Comitology were not in place. Moreover, the perpetuation of the regulatory procedure with scrutiny raises the question of which scope of application is currently left to delegated legislation according to Art. 290 TFEU. However, whichever characterisation is taken, certain requirements are made for the basic act: it has to be sufficiently concrete concerning the scope of the power transferred to the Commission, and must contain the essential information concerning the matter to be regulated. These requirements were established explicitly under Art. 290 (1) subpara. 2 TFEU, but were already developed for implementing regulation under the Comitology process by the ECJ.51 The statement in Art. 19 (7) RED that the amendments are “non-essential” does not bind the ECJ. While the calculation of the default values may be delegated, the calculation methodology itself appears fundamental in assessing compliance. However, the ECJ has in the past been reluctant to define “essential elements,” and has given a broad interpretation to the implementing powers of the Commission,52 in particular where European Parliament and Council 48

Hardacre, A. and Kaeding, M. “Delegated & implementing acts – The new Comitology.” Brussels: European Institute of Public Administration, 2011, 13. However, in a Communication, the Commission has suggested that reasons shall be given. Commission, Communication on the implementation of Article 290 of the Treaty on the Functioning of the European Union, COM [2009] 673 final.

49

On the difficulties in drawing the distinction, see Craig, P. P., “Delegated acts, implementing acts and the new Comitology Regulation,” European Law Review 36, no. 5 (2011) 671-687: 672 foll; Stelkens, U., “Art. 291 AEUV, das Unionsverwaltungsrecht und die Verwaltungsautonomie der Mitgliedstaaten – zugleich zur Abgrenzung der Anwendungsbereiche von Art. 290 und Art. 291 AEUV,” Europarecht 47, no. 5 (2012) 512-546.

50

Council, Joint Declaration concerning the implementation of Article 291 of the Treaty on the Functioning of the European Union, Council Document n. 17477/09 [2009] Annex II.

51

ECJ, 25/70 (Köster) [1970] ECR 1161, para. 6, , 1995 #1994.

52

ECJ, C-240/90 (Germany v. Commission) [1992] ECR I-5383, para. 37; ECJ, C-66/04 (United Kingdom v. European Parliament and Council) [2005] ECR I-10553, para. 53-58.

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have strong powers of scrutiny.53 However, the ECJ has recently required that in addition to the determination of the essential elements, the basic act must also contain provisions ensuring the objectives of its legal basis, in this case Art. 114 TFEU (ex Art. 95 TEC). Accordingly, a framework has to be established on the modalities and procedures of decision-making.54 The transfer of power to the Commission in Art. 19 (7) RED complies with these broad requirements. It contains further guidance to the Commission on the subject areas for amendments and the methodology to be observed, thereby providing a framework for the amendment. A recent Commission proposal seeks to amend RED to bring it in line with current terminology. Art. 25 (4) RED refers to the regulatory procedure with scrutiny under the TEC, and the proposed replacement Art. 25b RED confers the competence to the Commission to enact delegated acts (Art. 290 TFEU).55 This would complete the transition of RED onto the system of tertiary legislation under the TFEU.



3.2.2 Major issues and uncertainties

Uncertainty in individual parameters would not be significant if the impact on the end result is low. However, the most uncertain parameters appear to be significant for biofuels and bioliquids, such as the emissions from agriculture56 and soil organic carbon.57 In the RED methodology, these uncertainties in quantifying emissions need to be carefully considered, in particular for large-scale projects.58 Two key issues are land carbon stocks and land conversions, and emissions from agriculture.



3.2.2.1 Land carbon stocks and land conversions

Land conversions or use changes occur where the demand for agricultural crops rises beyond the potential yield possible from the available 53

ECJ, Joined cases C-296/93 and 307/03 (France and Ireland v. Commission) [1996] ECR I-795, para. 22.

54 55

ECJ, C-66/04 (United Kingdom v. European Parliament and Council) [2005] ECR I-10553, para. 48 foll.

Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012], Art. 2 n. 10, 11.

56

Crutzen, P. J. et al., “N2O release from agro-biofuel production negates global warming reduction by replacing fossil fuels,” Atmospheric Chemistry and Physics 8, no. 2 (2008) 389-395.

57

IPCC – Task force on national greenhouse gas inventories, Guidelines for national greenhouse gas inventories [2006]; Reijnders, L., “Ethanol production from crop residues and soil organic carbon,” Resources, Conservation and Recycling 52, no. 4 (2008) 653-658.

58

Chiaramonti, D. and Recchia, L., “Is life cycle assessment (LCA) a suitable method for quantitative CO2 saving estimations? The impact of field input on the LCA results for a pure vegetable oil chain,” Biomass Bioenerg. 34, no. 5 (2010) 787-797.

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arable land. Land conversions are an important factor in the GHG emission balance: while early studies declared bioenergy as a solution to climate change, newer studies, taking into account emissions from land cover and land use changes, paint a different picture.59 Indeed, some studies suggest that even considering only direct land use changes, the GHG balance of palm oil biodiesel could be positive, i.e. causing more emissions than fossil fuel and thus being detrimental for climate change mitigation.60 It has been estimated that the conversion of rainforests, peatland, savannah or grassland for energy crops in Brazil, Southeast Asia and the USA releases 17 to 420 times more CO2 than the annual GHG reductions provided by these fuels by displacing fossil fuels (a so-called carbon debt).61 Land use change (referred to in Annex V C n. 7, 10 RED) is defined as changes of land cover according to the six land categories used by the IPCC (forest land, grassland, cropland, wetlands, settlements and other land), plus a seventh category of perennial crops, such as oil palm.62 The current targets for renewable energy and bioenergy in particular will require production that exceeds the yields of the available arable land, so land use changes will certainly occur.63 However, different types of land use change, direct and indirect, come with different degrees of uncertainty. While direct land use changes can be measured, the uncertainties are much larger for indirect land use changes. Direct land use change (dLUC) occurs where feedstock for bioenergy is cultivated on land directly converted from another status to agricultural land. Feedstock may also be grown on existing agricultural land, thereby displacing the products that were previously grown there to land with another status. In this case, the direct land use change of another agricultural commodity has an indirect land use change (iLUC) effect of bioenergy,64 also known as leakage or displacement effect.65

59

Dallemand, J. F. et al., “Biomass for transport, heat and electricity: scientific challenges,” Management of Environmental Quality: An International Journal 21, no. 4 (2010) 523-547: 535.

60

Reinhardt, G. A. and von Falkenstein, E., “Environmental assessment of biofuels for transport and the aspects of land use competition,” Biomass Bioenerg. 35, no. 6 (2011) 2315-2322; Reinhardt, G. et al. “Rain forest for biodiesel? Ecological effects of using palm oil as a source of energy.” Frankfurt: WWF Germany, 2007.

61

Fargione, J. et al., “Land clearing and the biofuel carbon debt,” Science 319, no. 5867 (2008) 1235-1238.

62

Commission, Communication on the practical implementation of the EU biofuels and bioliquids sustainability scheme and on counting rules for biofuels, OJ [2010] C 160/02, Annex II.

63

Edwards, R., Larivé, J.-F., and J.-C., B. “Well-to-wheels analysis of future automotive fuels and powertrains in the European Context – Well-to-Wheels Report Version 3c.” Ispra: JRC, 2011, 44.

64 65

Commission, Report on indirect land-use change related to biofuels and bioliquids, COM [2010] 811, 4.

van Stappen, F., Brose, I., and Schenkel, Y., “Direct and indirect land use changes issues in European sustainability initiatives: state-of-the-art, open issues and future developments,” Biomass Bioenerg. 35, no. 12 (2011) 4824-4834: 4829.

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3.2.2.1.1 Direct land use changes

The RED does not contain default values for land use changes. Nonetheless, direct land use changes are part of the calculation methodology. Notably, the calculation method does not take into account all types of carbon stock change or net fixation in the soil,66 but only those caused by land-use change. (Annex V part C, n. 7 RED). The Commission has established guidelines for the calculation of land carbon stocks based on the 2006 IPCC Guidelines for National Greenhouse Gas Inventories (Annex V C n. 10 RED).67 The IPCC Guidelines take into account above- and below- ground carbon stock balance between the new cultivation and a reference system. The IPCC suggests default emission factors (Tier 1), but recommends using country-specific validated data (Tier 2 or 3) where available. However, the IPCC guidelines were intended for national inventories rather than for economic operators, so further information has been added where appropriate (recital 71 RED).68 Under RED, no calculation is made for no-go areas such as peatland or primary forest.69 Notably, natural forests can be converted into perennial tree crops without counting as a change in land use (see section 4.2.2).70 In accounting for land use changes, the most important influencing factors are the magnitude of the carbon stock change and the annualisation.71 According to Annex V C n. 7 RED, the GHG emissions from carbon stock change due to land use change is calculated by multiplying the difference between the carbon stock per unit area for the reference land use (CSR) and the carbon stock per unit area associated with the actual land use (CSA) with the quotient from the division of the molecular weight of CO2 and carbon (3.664) and with the reciprocal value of the productivity of the crop (P). The discrepancy between the reference land use and the land use after conversion is then annual-

66

Such as rhizodeposits i.e. CO2 fixed by growing biomass through the photosynthesis process translocated to the soil in the form of some immobilised forms of carbon. Kuzyakov, Y. and Domanski, G., “Carbon input by plants into the soil – Review,” Journal of Plant Nutrition and Soil Science 163, no. 4 (2000) 421-431.

67

IPCC – Task force on national greenhouse gas inventories, Guidelines for national greenhouse gas inventories [2006], Vol. 4 Agriculture, forestry and other land use p. 642.

68

Commission, Decision on guidelines for the calculation of land carbon stocks for the purpose of Annex V to Directive 2009/28/EC [2010] L 151/19, recital 2.

69 70

Ibid., recital 3.

van Stappen, F., Brose, I., and Schenkel, Y., “Direct and indirect land use changes issues in European sustainability initiatives: state-of-the-art, open issues and future developments,” Biomass Bioenerg. 35, no. 12 (2011) 4824-4834: 4832.

71

Reinhardt, G. A. and von Falkenstein, E., “Environmental assessment of biofuels for transport and the aspects of land use competition,” Biomass Bioenerg. 35, no. 6 (2011) 2315-2322.

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ised over 20 years (i.e. divided by 20), and a 29 gCO2eq/MJ bonus (e B) is deducted if biomass is obtained from restored degraded land.72

𝑒𝑒! =

1 1 𝐶𝐶𝐶𝐶! − 𝐶𝐶𝐶𝐶! ×3.664× × − 𝑒𝑒! 𝑃𝑃 20

As no default values are available for land use changes, economic operators have to use actual values for carbon stocks associated with the reference land use and the actual land use, i.e. the land use after conversion. The Commission Decision on the calculation of land carbon stock provides calculation rules in order to ensure a consistent determination and calculation of carbon stock, both soil organic stock and carbon stock in the vegetation.73 Moreover, standard values that can be used as a basis for the calculation are provided by the Commission, except for improbable combinations of climate and soil type.74 Although pragmatic, annualisations often underestimate the immediate climate change effect of pulse emissions, such as those from land use changes. The static methodology 75 does not allow for the fact that emissions and sinks are dynamic, varying significantly over time.76 Thus, dynamic indicators77 or derivatives from dynamic approaches78 may paint a more accurate picture, especially for time differences between GHG emissions and sinks. However, the shortterm emissions are not the primary focus of the GHG emission balance under RED, which instead seeks to discourage land use changes overall. Therefore, the annualisation seems appropriate in this case. Direct land use changes, as calculated under Annex V C n. 7 RED are already difficult to assess regarding their impact on GHG emissions. The assessment is all the more difficult for indirect land use changes (iLUC), which are mainly assessed through modelling.79 72 73

However, the Commission has to date not issued a definition defining the term degraded land.

Annex V C n. 7 RED; Commission, Decision on guidelines for the calculation of land carbon stocks for the purpose of Annex V to Directive 2009/28/EC [2010] L 151/19, Annex.

74 75

Ibid., recital 5, Annex.

van Stappen, F., Brose, I., and Schenkel, Y., “Direct and indirect land use changes issues in European sustainability initiatives: state-of-the-art, open issues and future developments,” Biomass Bioenerg. 35, no. 12 (2011) 4824-4834: 4832.

76

Kendall, A., Chang, B., and Sharpe, B., “Accounting for time-dependent effects in biofuel life cycle greenhouse gas emissions calculations,” Environmental Science & Technology 43, no. 18 (2009) 71427147.

77

Kirkinen, J. et al., “Greenhouse impact due to the use of combustible fuels: life cycle viewpoint and relative radiative forcing commitment,” Environmental Management 42, no. 3 (2008) 458-469.

78

Cherubini, F. et al., “CO2 emissions from biomass combustion for bioenergy: atmospheric decay and contribution to global warming,” GCB Bioenergy 3, no. 5 (2011) 413-426.

79

Fritsche, U. R. et al. “Sustainable bioenergy: current status and outlook – Summary of recent results.” Darmstadt: Öko-Institut, 2009, 7 foll.

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3.2.2.1.2 Indirect land use changes

As required under Art. 19 (6) subpara. 1 RED, the Commission has drafted a report on indirect land use change related to biofuels and bioliquids after public consultation on potential regulation of indirect land use changes.80 Indirect land use change is currently not part of the LCA, but is a crucial factor in ascertaining the actual GHG emission balance of biofuels and bioliquids. In fact, if it is not taken into account, a comprehensive LCA cannot be undertaken. However, accounting for iLUC may mean that a country is being penalised for expansion policies and market opportunities of another country in the biofuel sector.81 Indirect land use change cannot practically be observed or measured, and instead requires modelling. In order to assess iLUC, the local culture (food preferences etc.), economics (demand for specific products, financial incentives), environmental conditions (soil quality, land, water availability), land policy and development programs (agricultural programs, road building, zoning) and the feedbacks between these factors, including past human activity (land degradation, irrigation and roads) have to be assessed.82 Several approaches have been developed: for example, under the Clean Development Mechanism, areas surrounding the project site are monitored,83 the German Öko-Institut has developed a risk adder,84 Searchinger et al. have developed an economic model estimating iLUC under which higher prices of agricultural commodities lead to conversions,85 a model that has been used for the US Renewable Fuel Standard 2 (RFS2). Searchinger’s model has been criticised as only showing that iLUC are more difficult to model and in need of further research.86 Moreover, interactions with other economic sectors are not taken into account.87 Despite this criticism, the Commission considers economic models to be the best available methodology, despite these models discarding 80 81

Commission, Report on indirect land-use change related to biofuels and bioliquids, COM [2010] 811.

van Stappen, F., Brose, I., and Schenkel, Y., “Direct and indirect land use changes issues in European sustainability initiatives: state-of-the-art, open issues and future developments,” Biomass Bioenerg. 35, no. 12 (2011) 4824-4834: 4830.

82 83

Ibid.: 4829.

Under the Clean Development Mechanism, bioethanol production from sugar cane requires estimating indirect land use change by annually monitoring a fixed area radius around the project site.

84

Fritsche, U. R., Sims, R. E. H., and Monti, A., “Direct and indirect land-use competition issues for energy crops and their sustainable production – an overview,” Biofuels, Bioproducts and Biorefining 4, no. 6 (2010) 692-704.

85

Searchinger, T. et al., “Use of U.S. croplands for biofuels increases greenhouse gases through emissions from land-use change,” Science 319, no. 5867 (2008) 1238-1240.

86 87

Kline, K. L. and Dale, V. H., “Biofuels: effects on land and fire,” Science 321, no. 5886 (2008) 199-201.

Gnansounou, E. et al. “Accounting for indirect land-use changes in GHG balances of biofuels: review of current approaches.” Lausanne: École politechnique fédérale de Lausanne, 2008.

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non-economic factors influencing land use change. The Commission has recognised that economic modelling is dependent on assumptions on the treatment of co-products, existing yields, marginal yields, food and feed consumption, classification of land, price and production elasticity, carbon stock values, the type of land converted, the modelling of pasture and the drivers of deforestation, among others.88 Current models do not consider land use changes beyond the borders of one country, or the interactions resulting from cross border trade. Even if they were known, these factors are difficult to establish accurately.89 Overall, modelling approaches currently have numerous deficiencies and uncertainties,90 and thus inconsistencies. The results of different studies vary considerably across feedstocks and trade assumptions.91 A comparison of different iLUC models showed very diverse results depending on the parameters and variables used.92 These estimations may considerably influence the outcome, and the Commission considers more work necessary in order to draft standards governing indirect land use changes, but in the meantime suggests a precautionary approach.93 A decision on a legislative proposal on indirect land use changes was required by the end of 2012 (Art. 19 (6) subpara. 3) RED), and suggests providing estimated indirect land- use changes in Annex VIII, and that the Commission shall be empowered to adopt delegated acts according to Art. 290 TFEU on the revision of these proposed values as well as the introduction of new values.94



3.2.2.2 Emissions from agriculture

The RED methodology includes emissions from the cultivation and extraction of raw materials (Annex V C n. 6 RED) – these are an important element and an important source of uncertainty.95 88

Commission, Report on indirect land-use change related to biofuels and bioliquids, COM [2010] 811, 10.

89

van Stappen, F., Brose, I., and Schenkel, Y., “Direct and indirect land use changes issues in European sustainability initiatives: state-of-the-art, open issues and future developments,” Biomass Bioenerg. 35, no. 12 (2011) 4824-4834: 4830.

90 91

Commission, Report on indirect land-use change related to biofuels and bioliquids, COM [2010] 811, 7.

Ibid., 9.

92

Edwards, R., Mulligan, D., and Marelli, L. “Indirect land use change from increased biofuels demand – comparison of models and results for marginal biofuels production from different feedstocks.” Ispra: JRC, 2010.

93

Commission, Report on indirect land-use change related to biofuels and bioliquids, COM [2010] 811, 15.

94

Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012], Art. 2 n. 7 (c).

95

Smeets, E. M. W. et al., “Contribution of N2O to the greenhouse gas balance of first-generation biofuels,” Global Change Biol. 15, no. 1 (2009) 1-23; de Santi, G. et al. “Biofuels in the European context: facts and uncertainties.” Petten: JRC, 2008.

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Emissions from cultivation include seeds, fuel, fertiliser, pesticide and nitrous oxide (N2O) emissions from the field.96 N2O is a greenhouse gas with a high global warming potential, estimated to be 296 times more potent than CO2 (see Annex V C n. 5 RED).97 Moreover, Ammonia (NH3) and nitrate (NO3–) leaching are secondary flows from fertiliser application which influence the nitrogen cycle in agriculture, which can cause indirect emissions of N2O,98 but which are currently not included in the LCA under RED. In estimating emissions from agriculture, the most widely used method is the IPCC emission factor,99 as data-based country-specific factors are not available.100 Such factors are however necessary, as N2O fluxes are highly variable in space and time, as are the indirect emission pathways. Thus, without common factors, the results of different studies also vary vastly.101 Different methodologies take into account different geographical conditions and fertiliser types, leading to different results and assumptions about uncertainty ranges. This shows that more research is required on N2O sources and the nitrogen cycle.102 In its report on the feasibility of drawing up lists of areas in third countries with lower GHG emissions from cultivation than estimated by disaggregated default values (see Art. 19 (4) RED), the Commission considered available statistical models to be insufficient due to the climate zones and crop types represented, and therefore favours a process-based model such as used in the Well-to-Wheels report.103 However, the current available data and understanding of agricultural emissions is held to be of insufficient quality, requiring further 96

Commission, Communication on the practical implementation of the EU biofuels and bioliquids sustainability scheme and on counting rules for biofuels, OJ [2010] C 160/02, Annex II.

97

IPCC – Task force on national greenhouse gas inventories, Guidelines for national greenhouse gas inventories [2006], Vol. 4 Agriculture, forestry and other land use p. 642.

98

van Stappen, F., Brose, I., and Schenkel, Y., “Direct and indirect land use changes issues in European sustainability initiatives: state-of-the-art, open issues and future developments,” Biomass Bioenerg. 35, no. 12 (2011) 4824-4834: 4828. For annual estimates of N2O fluxes, see Stehfest, E. and Bouwman, L., “N2O and NO emission from agricultural fields and soils under natural vegetation: summarizing available measurement data and modeling of global annual emissions,” Nutrient Cycling in Agroecosystems 74, no. 3 (2006) 207-228.

99

IPCC – Task force on national greenhouse gas inventories, Emission Factor Database (EFDB) [2011].

100

L eip, A. et al., “The quality of European (EU-15) greenhouse gas inventories from agriculture,” Environmental Sciences 2, no. 2-3 (2005) 177-192.

101

Dallemand, J. F. et al., “Biomass for transport, heat and electricity: scientific challenges,” Management of Environmental Quality: An International Journal 21, no. 4 (2010) 523-547: 531.

102

van Stappen, F., Brose, I., and Schenkel, Y., “Direct and indirect land use changes issues in European sustainability initiatives: state-of-the-art, open issues and future developments,” Biomass Bioenerg. 35, no. 12 (2011) 4824-4834: 4829.

103

On the available methodologies, see also Stehfest, E. and Bouwman, L., “N2O and NO emission from agricultural fields and soils under natural vegetation: summarizing available measurement data and modeling of global annual emissions,” Nutrient Cycling in Agroecosystems 74, no. 3 (2006) 207-228.

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research.104 In particular, lists of areas in third countries cannot be drafted, and especially not without the contribution of the third countries.105 In order to ensure transparency, the methodology and data used by the JRC is available on its website, inviting feedback in order to improve the modelling.106 The information gathered by the JRC shall be included in the discussion with third countries under the dialogue according to Art. 23 (2) RED.107



3.2.3 Reduction of the pressure on land

While it is based on science, the methodology for GHG emission balance is also an instrument to reduce the pressure on land by promoting efficiency and synergizing with biodiversity protection: emissions from carbon soil accumulation which are avoided through improved agricultural management, and excess electricity from cogeneration are subtracted from the GHG emission balance. (Annex V C n. 14 to 16 RED). When calculating the annualised emissions from carbon stock changes caused by land use change, a bonus of 29 gCO2eq/MJ is added if the biomass is obtained from restored degraded land (Annex V C n. 7, 8 RED).108 The bonus applies for 10 years from the date of conversion to agricultural use, so long as the cultivation both steadily increases carbon storage and reduces erosion or soil contamination (Annex V C n. 8, 9 RED). However, a Commission decision, further defining the notion of degraded land (Art. 19 (8) RED) has not yet been issued. The use of wastes, agricultural crop residues such as straw and bagasse and residues from processing such as crude glycerine, used as animal feed or in cosmetic products,109 are considered to have a zero balance up to the point of collection of the materials (Annex V C n. 18 RED). As this use of waste and residues increases efficiency, it reduces GHG emissions and thus the GHG

104

Commission, Report on the feasibility of drawing up lists of areas in third countries with low greenhouse gas emissions from cultivation, COM [2010] 427 final, 4, 7.

105

Ibid., 5.

106 107

Ibid.

Ibid., 6.

108

In order to qualify for the bonus, evidence has to be provided that the land was not in use for agriculture or any other activity in January 2008, the reference year also used for the area exemptions, and that it was either severely degraded land, including such land that was formerly in agricultural us and heavily contaminated land. Severely degraded land is defined as “land that, for a signification period of time, has either been significantly salinised or presented significantly low organic matter content and has been severely eroded.” Heavily contaminated land is “land that is unfit for cultivation of food and feed due to soil contamination” (Annex V part C n. 9 RED).

109

Edwards, R., Larivé, J.-F., and J.-C., B. “Well-to-wheels analysis of future automotive fuels and powertrains in the European Context – Well-to-Wheels Report Version 3c.” Ispra: JRC, 2011, 36.

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balance.110 Accordingly, the contribution made by biofuels produced from wastes, residues, non-food cellulosic material and ligno-cellulosic material shall be considered to be twice that made by other biofuels for the purpose of demonstrating compliance with biofuel quotas for operators and national targets of renewable energy use in the transport sector (Art. 21 (2) RED).111 The recent Commission proposal aims at replacing this double accounting with a more differentiated system, allowing the quadruple or double accounting of different feedstocks (see above, section 3.1.2).112 However, there is no obligation in the RED methodology that the co-products shall actually be used. Moreover, the terms residues, wastes etc. are still to be defined more precisely. At least for the notion of waste, this issue has been recognised by the Commission proposal seeking to amend RED, referring to the Directive 2009/98/EC on waste.113



3.3 Analysis

Currently, the LCA methodology is static both temporally and spatially, and is limited to emissions rather than general pollution, restricting its ability to assess dynamic interactions between land surface and atmosphere.114 The LCA under RED concentrates on the GHG intensity of the feedstock, demonstrating systemic boundaries: indirect impacts through market effects are not taken into account.115 However, the recent Commission proposal seeks to address these limitations to some degree, estimating the proportion of indirect land use changes as part of the LCA. The numerous reporting and updating requirements surrounding the required GHG emission balance, the calculation method and the default values show that the requirements on GHG emissions in the sustainability criteria are not considered final. This reflects that these provisions have been introduced before the issues have been comprehensively understood and resolved at a 110

L echon, Y., Cabal, H., and Sáez, R., “Life cycle greenhouse gas emissions impacts of the adoption of the EU Directive on biofuels in Spain. Effect of the import of raw materials and land use changes,” Biomass Bioenerg. 35, no. 6 (2011) 2374-2384: 2376.

111

Notably, these fuels do not count double for the purpose of financial support for the consumption of biofuels and bioliquids according to Art. 17 (1) 1 (c) RED.

112

Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012], Art. 2 n. 2.

113

Ibid., Art. 2 n. 1.

114

Bright, R. M., Cherubini, F., and Strømman, A. H., “Climate impacts of bioenergy: inclusion of carbon cycle and albedo dynamics in life cycle impact assessment,” Environmental Impact Assessment Review 36(2012) 2-11.

115

Soimakallio, S. and Koponen, K., “How to ensure greenhouse gas emission reductions by increasing the use of biofuels? – Suitability of the European Union sustainability criteria,” Biomass Bioenerg. 35, no. 8 (2011) 3504-3513: 3506.

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scientific and technological level. Notably, the provisions are to be updated to the latest technological and scientific knowledge. Overall, the extent of the impact of increasing bioenergy feedstock production is still unclear, in both space and time: there is not sufficient data and understanding of the material to produce an unambiguous, robust answer.116 Moreover, LCA depends on complex balances of different production paths, species and energy uses. Biomass has a variety of uses besides energy, it has complex production, processing and trading chains, it has complex impacts, and is subject to new technological developments.117 While for some areas a larger data pool is available, the impacts of indirect land use change and emissions from agriculture in particular are not yet fully understood, let alone supported by robust data. This conclusion is also suggested by the considerable amendments on GHG emission requirements proposed in the 2012 Commission proposal. A pervasive theme of LCA for GHG emissions for biofuels and bioliquids is therefore uncertainty, which appears across the board to varying degrees of probability and/or impact. The carbon balance of biofuels and bioliquids has been addressed in the sustainability criteria before all issues have been conclusively investigated, and the residual uncertainty remains high. Accordingly, the standards for the calculation of the GHG emission balance are thus to some degree expressions of the precautionary principle. The precautionary principle is the legal translation of the idioms “better safe than sorry” and “look before you leap”, and has been introduced to deal with situations of scientific uncertainty.118 It allows erring on the side of caution in the absence of a proven risk, if the potential threat is too serious to wait for conclusive evidence – if that evidence can be obtained at all.119 It essentially expands the substantive discretion of the decision makers. Precautionary action is a reaction to the complexity of situations: compounding factors contributing to a hazard, potentially long delays until the materialisation of a risk and difficulties in establishing causation while having to reach a decision on a short timescale. The status of the precautionary principle in international law is controversial.120 Overall, there are a number of different and incoherent definitions,121 and 116 117

Ibid.: 3509.

C herubini, F. et al., “Energy- and greenhouse gas-based LCA of biofuel and bioenergy systems: key issues, ranges and recommendations,” Resources, Conservation and Recycling 53, no. 8 (2009) 434-447.

118

T his explanation of the precautionary principle has been adapted from the Author’s LL.M. thesis. Schmeichel, A., “Science in context: GMOs at the frontier of trade and public concerns” (University of Warwick, 2009).

119

Nucara, A., “Precautionary Principle and GMOs: Protection or Protectionism,” International Trade Law Review 9, no. 2 (2003) 47-53; Christoforou, T., “The Reguation of Genetically Modified Organims in the European Union: the interplay of law, science and politics,” Common Market Law Review 41, no. 3 (2004) 637-709.

120

Hill, R., Johnston, S., and Sendashonga, C., “Risk assessment and precaution in the Biosafety Protocol,” Rev. Eur. Community Int. Environ. Law 13, no. 2 (2004) 263-269.

121

See for example CFI, T-74/00 (Artegodan and others v. Commission) [2002] ECR II-4945, 183.

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much debate on the legal status of the principle. It has been considered an (nonbinding) approach122 or a norm,123 or more precisely a principle,124 applicable to a number of very different cases and containing an optimisation requirement.125 In the TFEU, the precautionary principle is mentioned, albeit not defined, in Art. 191 (2) TFEU. Although according in its wording that article only applies to environmental matters, it has been extended to different fields as a generally applicable principle in EU law.126 The scope of the precautionary principle at EU level has been defined by case law, notably during the BSE crisis.127 In National Farmers Union, the ECJ gave a general definition of the precautionary principle, although without referring to the principle explicitly: where there is uncertainty as to the existence or extent of risks to human health, the institutions may take protective measures without having to wait until the reality or the seriousness of those risks becomes fully apparent.128 However, the application of the precautionary principle is not unlimited, but has to be put in the context of the objectives of the EU, notably the achievement of the internal market. The precautionary principle shall not be used for enabling protectionist measures.129 Accordingly, the Commission has drafted a – not binding – Communication on 122

Di Fabio, U. “Voraussetzungen und Grenzen des umweltrechtlichen Vorsorgeprinzips.” In Festschrift für Wolfgang Ritter, edited by Kley, M. D., 123-999. Köln: O. Schmidt, 1997, 26.

123

Norms can be divided into principles and rules. Both can be legally binding or not. Some require the existence of a coercive power of the state for a norm to be binding, i.e. its enforceability. Even when refusing this condition, it has to be recognized that a norm is only as hard as its review mechanism, e.g. the interpretation of a norm in judicial review. Douma, W. T., “The Precautionary Principle – Its Application in International, European and Dutch Law” (Proefschrift, Rijksuniversiteit Groningen, 2003), 27.

124

D workin, R. M., Taking rights seriously (London: Duckworth, 1977), 25 foll. Rules are qualified by an “if… then” structure. They are applicable in an “all or nothing” fashion. Precaution does not have such a clear structure or a predetermined outcome. It should therefore be classified as a principle: principles provide a reason to argue in one direction, but do not require a particular decision. They will instead refer to some purpose, entitlement, goal or value and are therefore said to have an explanatory and justificatory role. Hart, H. L. A., The concept of law, 2nd ed. (Oxford: Clarendon Press, 1997), 260-263.

125

Alexy, R., Theorie der Grundrechte, 4th ed. (Frankfurt am Main: Suhrkamp, 2001), 71foll. E.g. de Sadeleer, N., Environmental Principles: from political slogans to legal rules (Oxford: Oxford University Press, 2002).

126

ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265; ECJ, C-157/96 (National Farmers’ Union) [1998] ECR I-2211, para. 63 foll; CFI, T-13/99 (Pfizer v. Council) [1999] ECR II-3305, para. 139 foll; ECJ, C-236/01 (Monsanto) [2003] ECR I-8105, para. 128, 133.

127

ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265, para. 99; ECJ, C-157/96 (National Farmers’ Union) [1998] ECR I-2211.

128

ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265, para. 99. See also ECJ, C-6/99 (Greenpeace France and others) [2000] ECR I-1651.

129

See for example Cross, F. B., “Paradoxical perils of the precautionary principle,” Wash. & Lee L. Rev. 53, no. 3 (1996) 851-925: 852. Cheyne, I., “The precautionary principle in EG and WTO law: searching for a common understanding,” Environmental Law Review 8, no. 4 (2006) 257-277: 259.

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the precautionary principle, detailing the regulatory framework for its application.130 Prior to regulating with a view to the precautionary principle, the scientific facts have to be assessed: the Commission states that before invoking the principle, the relevant scientific data has to be evaluated and uncertainties exposed.131 For the GHG emission balance, this applies both to the impact of climate change and to the contribution of biofuels. Even though anthropogenic climate change may not yet be fully understood, its existence is generally established (see above, Introduction). Moreover, the scientific basis for the GHG emission balance requirements under RED is also based on scientific evidence (see above). The existence of uncertainties is recognised at several points within the GHG emission balance requirements under RED. In particular, the adaptation to scientific and technological progress is stressed, requiring regular reviews of methodology and default values. Where uncertainties are considered too extensive to regulate (such as on indirect land use change), reporting obligations are introduced and the setting of standards deferred. Where standards are set, these are based on the available scientific data with explicit requirements for updating. The scientific data is compiled by independent experts and then published on the JRC website.132 In applying the precautionary principle, several (overlapping) general principles have to be observed according to the Communication on the precautionary principle: proportionality, non-discrimination, consistency, examination of the benefits and costs of action or lack thereof, and examination of scientific developments.133 In the case of the GHG emission requirements under Art. 17 (2), 19, Annex V RED, the methodology appears consistent and non-discriminatory. In the face of scientific uncertainty, different methods of LCA come to different results. However, in the face of this uncertainty, the RED is consistent in using a single science-based methodology. The recurrence to international standards also avoids discrimination. For example, the methodology refers to international standards such as the 2006 IPCC Guidelines for GHG inventories (see recital 71 RED). Whereas the LCA in the RED is not explicitly based on the International Organisation for Standardisation’s ISO 14040:2006 Environmental management – life cycle assessment – principles and framework or ISO 14044:2006 Environmental management – life cycle assessment – requirements and guidelines,134 the standards are reflected in the methodology. In order to ensure transparency, the European Commission has established a transparency platform (see Art. 24 RED), provid.

130 131

Commission, Communication on the precautionary principle, COM [2000] 1 final.

Ibid., 5.

132 133

http://re.jrc.ec.europa.eu/biof/html/input_data_ghg.htm (20/5/2012).

Commission, Communication on the precautionary principle, COM [2000] 1 final, 6.3.

134

A ll ISO standards referred to in this thesis are available from http://www.iso.org/iso/home/store/ catalogue_ics.htm (13/2/2012), and are securely archived at the German Patent and Trade Mark Office (DPMA) in Munich.

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ing examples of calculations and calculation of default values from the data.135 The methodology allows economic operators to adapt to the new circumstances, setting moderate targets. It provides default values limiting the administrative burden, even though limited by the available scientific evidence. Overall, the requirements for precautionary legislation for a GHG balance based on a LCA are met, and the measures may be justified despite the residual uncertainties.

135

Commission, Communication on the practical implementation of the EU biofuels and bioliquids sustainability scheme and on counting rules for biofuels, OJ [2010] C 160/02, 3.3.

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Direct Land Use Changes: No-Go Areas

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direct land use changes: no-go areas

While the requirements of Art. 17 (2) RED on the GHG emission balance incidentally contribute to the protection of biodiversity (as the aim of climate change mitigation is the preservation of current living conditions), the sustainability criteria also contain rules specifically on the protection of biodiversity. Again, the issue of biodiversity is intertwined with climate change mitigation. Areas are not only exempt for their presumed high biodiversity status, but also as carbon sinks. Notably, biodiverse carbon sinks also contribute directly and to a higher degree to the mitigation of climate change (see Introduction). Art. 17 (3) to (5) RED excludes certain areas of high biodiversity and carbon storage capacity from use for the cultivation of biomass (referred to as “no-go areas”). Primary forests, protection zones and biodiverse grasslands are excluded because of their role in biodiversity (Art. 17 (3) RED), other wooded land and wetlands as carbon sinks (Art. 17 (4) RED) and peatland as an individual category (Art. 17 (5) RED). This chapter investigates the contribution of the area exclusions to the protection of biodiversity. RED article

Ecosystem

Reason for protection

Reference year

Exemptions

Commission recognition

Art. 17 (3) (a)

primary forest

high biodiversity

in or after January 2008

No

No

Art. 17 (3) (b) (i)

areas designated for nature protection nationally

high biodiversity

in or after January 2008

no interference with the protection purpose

No

Art. 17 (3) (b) (ii)

areas designated for the protection of rare, threatened or endangered ecosystems or species recognised by international agreement

high biodiversity

in or after January 2008

no interference with the protection purpose

Yes

Art. 17 (3) (b) (ii)

areas designated for the protection of rare, threatened or endangered ecosystems or species included in lists by intergovernmental organisations or the IUCN

high biodiversity

in or after January 2008

no interference with the protection purpose

Yes

Art. 17 (3) (c) (i)

highly biodiverse natural grassland

High biodiversity

in or after January 2008

No

No

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Art. 17 (3) (c) (ii)

highly biodiverse non-natural grassland

High biodiversity

in or after January 2008

harvesting necessary for preservation

No

Art. 17 (4) (a)

Wetlands

carbon stock

in (until) January 2008

No

No

Art. 17 (4) (b)

continuously forested areas

carbon stock

in (until) January 2008

No

No

Art. 17 (4) (c)

other wooded land

carbon stock

in (until) January 2008

No

No

Art. 17 (5)

Peatland

high biodiversity/ carbon stock

in January 2008

cultivation and harvesting does not involve drainage of previously undrained soil

No

Table 1: no-go areas



4.1 Areas designated for nature conservation

The no-go areas encompass a range of specific ecosystems, but also areas designated for nature conservation purposes at national level, or for the protection of rare, threatened or endangered ecosystems or species at international level (Art. 17 (3) (b) RED). Accordingly, in these areas the exclusion of protection zones is based on the formal decision to reserve an area for conservation purposes; its actual biodiversity or carbon storage capacity does not have to be established. Technically, degraded land could thereby be an excluded area as long as it is formally designated for protection purposes.



4.1.1 Areas designated for nature protection purposes

Under Art. 17 (3) (b) (i) RED, areas protected for conservation purposes either by law or by the competent authority are excluded from cultivation, without requiring a confirming Commission decision. The formulation in Art. 17 (3) (b) (ii) RED on “areas designated for the protection of rare, threatened or endangered ecosystems or species recognised by international agreements or included in lists drawn up by intergovernmental organisations or included in

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lists” suggests that Art. 17 (3) (b) (i) RED is limited to domestic acts.1 Thereby, the sustainability criteria mirror the level of protection formally declared in national law and have the potential to reinforce the substantial protection of formally declared protection zones. The incentive set by the sustainability criteria for promoting the exclusion of areas designated for nature conservation could thereby improve compliance with this formal designation by the resource state, as it places an additional incentive on adhering to national environmental standards. Where environmental standards are based on command and control, as is the case in many developing countries, the incentive RED places on economic operators willing to export might be a more effective driver for increasing compliance with the national law of the resource state than the local enforcement activities. The use of the sustainability criteria in demand states as a condition for certain support mechanisms and toward the Member States’ national targets could help to compensate for deficits in enforcing environmental protection law in resource states where the produce is exported or export is at least considered an option by the economic operator. The requirements on the act of designation are only broadly outlined: the form of the designation is left to the State in question. Notably, the designation is not limited to EU Member States, but also encompasses area designations according to the national law of third countries. The term “law” is not defined further and should be understood to encompass all abstract and general acts. The protection status does not have to be awarded by a legislative act, and may also be awarded by an administrative authority. The administrative act may be original and does not have to be based on an underlying law according to the RED. The term competent authority is to be defined under domestic law. The scope of the designation is limited to the territory over which the state in question has jurisdiction, according to an interpretation compliant with international law (although not explicitly stated in the Directive). An expansion would contradict the non-intervention principle stemming from the sovereign equality of states (see Art. 2 UN-Charter). Thus, concerns that developed countries will seek to establish protection zones in third countries2 are unsubstantiated. Art. 17 (3) (b) (i) RED merely reconfirms protection zones established nationally. The reason for assigning a conservation status (ecosystem, species etc.) is left to the designating state: Art. 17 (3) (b) (i) RED merely requires areas to be designated for nature protection purposes, but does not make any further specifications, leaving states free to use their national law to protect areas based on international agreements, intergovernmental organisations, the IUCN, or any other criteria they see fit. The term “nature protection purposes” is not defined further in the RED. Thus, the level of protection that must be awarded to an area 1

Hodson, P. “Renewable energy in transport (including biofuels).” In Renewable energy law and policy in the European Union, edited by Hercsuth, A., et al., 173-208. Leuven: Claeys&Casteels, 2010, 7.56. who refers to the designation of areas by government bodies “nationally” and “internationally”.

2

de Melo-Reiners, I. S., Regenwaldschutz in Brasilien und das Umweltvölkerrecht – Die Amazonasfrage als internationaler Streitfall (Aachen: Shaker Verlag, 2009), 61 foll., 116 foll.

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to be excluded remains open to interpretation. Guidance may be drawn from the IUCN World Commission, which has defined protected areas as “a clearly defined geographical space, recognised, dedicated and managed, through legal or other effective means, to achieve the long-term conservation of nature with associated ecosystem services and cultural values”.3



4.1.2 Area designation at for the protection of rare, threatened or endangered ecosystems or species

Biomass for biofuels and bioliquids shall also not stem from “areas designated for the protection of rare, threatened or endangered ecosystems or species recognised by international agreements or included in lists drawn up by intergovernmental organisations or the International Union for the Conservation of Nature” (IUCN) (Art. 17 (3) (b) (ii) RED). Unlike areas designated by a national authority, an approving Commission decision is required in order for the area to be excluded from cultivation or extraction of raw materials (Art. 18 (4) subpara. 2 RED). The reference to areas designated pursuant to international agreements takes the scope of application beyond national law, and provides a more general marker for the determination of area exclusions that may reduce the administrative burden of acquiring knowledge on the situation in each state. Moreover, it may reinforce the protection status awarded at international level. Art. 17 (3) (b) (ii) RED contains three elements: the entity defining the protected asset, the determination of the asset itself and the transferral into the scope of the sustainability criteria through Commission recognition.



4.1.2.1 International agreements, intergovernmental organisations and the IUCN

Area designation can be undertaken by international agreement, intergovernmental organisations4 or the International Union on the Conservation of Nature (IUCN). Accordingly, Art. 17 (3) (b) (ii) RED selects some of the active organisations that are operating beyond the national realm. International agreements are, despite their name, not concluded between nations, but between states.5 States enjoy full legal capacity in international law:6 they are originary subjects of international law, i.e. entities that draw 3

Dudley, N. “Guidelines for applying protected area management categories.” Gland: IUCN, 2008, 8.

4

Referred to as “old governance” in Abbot, K. W. and Snidal, D. “Strengthening international regulation through transnational new governance: overcoming the orchestration deficit.” Bremen: SfB 597 Staatlichkeit im Wandel – Transofrmations of the state, 2008.

5

Glahn, G. v. and Taulbee, J. L., Law among nations – an introduction to public international law, 10th ed. (Boston et. al.: Pearson, 2013), 3.

6

Permanent Court of International Justice, France v. Turkey (Lotus) [1927] Series A n. 10, 18; Rudolf, W. “Der Staat als Völkerrechtssubjekt zwischen Globalisierung und Partikularismus.” In Staatsrecht und Politik – Festschrift für Roman Herzog, edited by Herdegen, M., et al., 407-422. Munich: Beck, 2009.

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legal rights and duties from international law.7 Even though other entities are increasingly considered subjects of international law,8 states are still considered the most important actors.9 The conclusion of international agreements among states, as referred to in Art. 17 (3) (b) (ii) RED is the most common mechanism for the creation of international law.10 International agreements can be divided into two forms: contractual treaties set out bi- or multilateral obligations of the parties, based on exchanges or reciprocity (do ut des), while normative treaties seek to regulate a certain issue, aiming at broader participation.11 The wording of Art. 17 (3) (b) (ii) RED does not suggest any limitation as to the type of treaty covered. This is reinforced by the comparison to Art. 18 (4) subpara. 1 RED, which considers the Commission recognition of bi- and multilateral agreements. Accordingly, both forms of international agreements fall under Art. 17 (3) (b) (ii) RED. Its scope of application is thus very broad. At any rate, the multilateral environmental agreements such as the Convention on Biodiversity, the Ramsar Convention, the Convention on the International Trade in Endangered Species, the International Tropical Timber Agreement and the United Nations Framework Convention on Climate Change and its Kyoto Protocol fall into the scope of this provision as they have been drafted by states. Alternatively, these agreements could be considered intergovernmental organisations, a particular form of international organisations, which is also mentioned in Art. 17 (3) (b) (ii) RED. However, the distinction between institutionalised treaties and international organisations is difficult to draw in practice, as no universally agreed definition exists of either term.12 International organisations are usually seen as entities set up by international agreements, i.e. by states, and granted certain competences and institutions. Unlike international agreements, international organisations have their own institutional structures, allowing for the further development of the regulatory regime and compliance control.13 In choosing to refer both to organisations and to agreements, the RED avoids needing to make this distinction, as well as avoiding the dispute on the 7

Hailbronner, K. and Kau, M. “Der Staat und der Einzelne als Völkerrechtssubjekte.” In Völkerrecht, edited by Vitzthum, W. G., 146-261. Berlin: de Gruyter, 2010, para. 2.

8

Notably, the legal personality under international law of the United Nations as international organisation was recognised in International Court of Justice, Bernadotte [1949] ICJ Rep 174, 178. Moreover, with the growing importance of human rights in international law, it can also be argued that individuals should be considered subjects of international law.Hailbronner, K. and Kau, M. “Der Staat und der Einzelne als Völkerrechtssubjekte.” In Völkerrecht, edited by Vitzthum, W. G., 146-261. Berlin: de Gruyter, 2010, para. 226 foll.

9

Cassese, A., International law, 2nd ed. (Oxford: Oxford University Press, 2005), 71.

10 11

Ibid., 170.

Matz, N., Wege zur Koordinierung völkerrechtlicher Verträge: völkervertragsrechtliche und institutionelle Ansätze (Berlin: Springer, 2006), 28 foll.

12 13

Ibid., 25 foll.

Ibid., 32.

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fluid differentiation between international organisation and institutionalised treaties,14 as the term can be read to include different levels of integration. However, the reference to intergovernmental organisations rather than international organisations also makes clear that, with a view to uncertainties on the definition, only international organisations whose membership are states (represented by their governments) shall be covered.15 One definition of international organisations is as international agreements evolved into a higher form of integration, with an institutional structure and increased competences.16 In this definition, international organisations’ memberships consist of states. However, international organisations can also be considered to include non-state international organisations, i.e. non-governmental organisations (NGOs).17 Accordingly, by using the term intergovernmental organisation rather than international organisations, Art. 17 (3) (b) (ii) RED makes clear that other entities operating in international context, without an exclusively state membership shall not be covered. These transnational entities, NGOs and networks establishing themselves as rule-makers beyond the state are growing in importance.18 Numerous transnational organisations exist for the protection of rare, threatened or endangered species. For example, the NGO Birdlife International is involved in the designation of important bird areas.19 Another example is the High Conservation Value (HCV) network, which was set up by NGOs, representatives from the forestry industry and certifiers, which has developed categories of critically important conservation values.20 Thus, an increasingly important group of actors is excluded from determining no-go areas under RED. A specific exception is made by the inclusion of the International Union for Conservation 14 15

Compare for example Ibid., 36 foll. with further references.

See for example the use of intergovernmental organisation in Scott, S. v., “Intergovernmental organisations as disseminators, legitmators and disguisers of hegemonic policy preferences: the United States, the International Whaling Commission and the introduction of a moratorium on commercial whaling,” Leiden Journal of International Law 21, no. 3 (2008) 581-600.

16

Klabbers, J., An introduction to international institutional law (Cambridge: Cambridge University Press, 2002), 7, 104 foll; Matz, N., Wege zur Koordinierung völkerrechtlicher Verträge: völkervertragsrechtliche und institutionelle Ansätze (Berlin: Springer, 2006), 32.

17

Schermers, H. G. and Blokker, N. M., International Institutional Law, 4th ed. (Leiden: Martinus Nijhoff, 2003), § 47; Klein, E. and Schmal, S. “Die internationalen und supranationalen Organisationen.” Chap. 4 In Völkerrecht, edited by Vitzthum, W. G., 263-387. Berlin: de Gruyter, 2010, 18.

18

Winter, G. “Transnational administrative comitology: the global harmonisation of chemicals classification and labelling.” Chap. 4 In Transnational administrative rule-making: performance, legal effects and legitimation, edited by Dilling, O., Herberg, M., and Winter, G., 112-150. Oxford: Hart Publishing, 2011, 112; Zumbansen, P. “Neither ‘public’ nor ‘private’, ‘national’ nor ‘international’: transnational corporate governance from a legal pluralist perspective.” Bremen: SfB597 Staatlichkeit im Wandel – Transformations of the State, 2010, 14 foll; Jackson, R. H. and Srensen, G., Introduction to international relations: theories and approaches, 3rd ed. (Oxford: Oxford University Press, 2007), 100 foll.

19

http://www.birdlife.org/ (1/3/2012).

20

http://www.hcvnetwork.org/ (1/3/2012).

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of Nature and Natural Resources (IUCN), an organisation that has been established by states, international organisations and NGOs.21 The IUCN has devised a list of protected area categories through its World Commission on Protected Areas (WCPA)22 and a “red list” of threatened species.23 A representative of an NGO considered that this exclusion of NGOs was not very problematic, as NGOs were lobbying for the establishment of national protection zones, which would then become no-go areas according to Art. 17 (3) (b) (i) RED.24 Moreover, transnational organisations do play a major role in compliance control (see below, Part III).



4.1.2.2 The conservation purpose

The conservation purpose for areas designated according to Art. 17 (3) (b) (ii) RED is much narrower than that of Art. 17 (3) (i) RED. For areas designated by national law or by the relevant competent authority, the designation for any nature protection purpose is decisive – states are free to choose the purpose. To justify exclusion of areas designated at an international level under Art. 17 (3) (b) (ii) RED, the intent must be the protection of rare, threatened or endangered species or ecosystems. The reference to ecosystems and species corresponds to most of the elements used for the established definition of biodiversity, apart from genetic diversity (see Art. 2 CBD). The notion of rare, threatened or endangered species is partly borrowed from the terminology of the IUCN Red List and CITES – the Convention on Trade in Endangered Species. Despite featuring the word ‘endangered’ in its name, CITES does not define this term. It does however establish a list of species threatened with extinction (Art. 3, 4, Annex II, III CITES). The IUCN has published detailed principles, criteria and methodologies on its red list categories ranging from extinct, through several levels of endangerment, to “near threatened” species, and finally species of least concern, with additional categories for data deficit or not evaluated.25 These definitions and methodologies can be drawn on for the determination of rare, threatened or endangered species. However, an equivalent for the assessment of ecosystems does not appear to exist at international level. What exactly must be recognised in international agreements or listed by intergovernmental organisations or the IUCN is ambiguous. The wording of Art. 17 (3) (b) (ii) RED refers to “areas designated for the protection of rare, 21

Gillespie, A., Conservation, biodiversity and international law (Cheltenham: Edward Elgar, 2011), 4. See also Czarnecki, R. “Legal status of the International Union for Conservation of Nature (IUCN) in Germany.” Berlin: Ecologic Institute, 2008.

22 23

IUCN (WCPA), Guidelines for applying protected area management categories [1994].

http://www.iucnredlist.org/ (1/3/2012).

24 25

Interview with a member of an environmental NGO (30/1/2013).

IUCN, Guidelines for using the IUCN red list categories and criteria [2013]; IUCN, Categories and criteria [2001].

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threatened or endangered ecosystems or species recognised by international agreements or included in lists drawn up by intergovernmental organisations or the IUCN.” Accordingly, the recognition or listing could refer to ecosystems or species, or it could refer to designated areas. If areas are recognised or listed rather than ecosystems and species, the scope of Art. 17 (3) (b) (ii) RED would be limited. The number of areas recognised by international agreements is not extensive. An example would be the Antarctica Treaty26 which is an area which is not enticing for agricultural production. Most international agreements, such as the CBD or the ITTO only contain general area descriptions which shall be treated in a certain way, but do not determine specific areas (see below Ch.10), and can thus not be considered to “designate” areas. The word “designation” suggests a precise determination of the scope and borders of an area. Accordingly, there would be no potential for interaction between the sustainability criteria and these multilateral environmental agreements. Notably, the wetlands of international importance under the Ramsar Convention are not recognised by the Convention, but are compiled in a list based on the area designation by its contracting parties in compliance with the requirements of the Ramsar Convention (Art. 2.1 Ramsar Convention). Accordingly, wetlands listed under the Ramsar Convention would not fall under “recognised by international agreements” but fall under areas included in lists drawn up by intergovernmental organisations. (Some wetlands will already be covered by Art. 17 (3) (b) (i) RED if the wetland has been designated for nature protection purposes under national law (see above, section 4.1) Areas listed under the United Nations Educational, Scientific and Cultural Organisation (UNESCO) as world heritage sites would be covered by Art. 17 (3) (b) (ii) RED where they address rare, endangered or threatened ecosystems.27 Again, areas designated as world heritage sites might already be protected under national law and thus fall under Art. 17 (3) (b) (i) RED. Similarly, contracting parties designate areas as key biodiversity areas under the IUCN methodology.28 However, these areas are not included in lists by the IUCN and would therefore not fall under Art. 17 (3) (b) (ii) RED. If recognition or listing referred not to designated areas, but to species and ecosystems, the scope of Art. 17 (3) (b) (ii) RED would be much broader: other multilateral agreements such as CITES which enumerates species threatened with extinction (Art. 2, 3, Annex II, III CITES) could also be included, as would the IUCN Red List for species. Thus, the scope of Art. 17 (3) (b) (ii) RED depends on the interpretation of the connecting terms. 26 27

http://www.ats.aq/e/ats.htm (1/3/2012).

UNESCO, Convention concerning the protection of the world cultural and natural heritage [1972]; UNESCO, Operational guidelines for the implementation of the World Heritage Convention [2012]. See http://whc. unesco.org/en/list/ (1/3/2012).

28

Langhammer, P. F. et al. “Identification and gap analysis of key biodiversity areas: targets for comprehensive protected area systems.” Gland: IUCN, 2007.

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A comparison of some of the equally official versions in different languages brings no clarity: the German version on this is ambiguous.29 The English version suggests that ecosystems or species are recognised or listed.30 The French version makes clear that not ecosystems or species, but areas for the protection of ecosystems and species are to be recognised or listed.31 However, this may not be sufficient to override the indication in the English version. In favour of interpreting recognition or listing applying to areas rather than species or ecosystems is that another interpretation would mean that Art. 17 (3) (b) (ii) RED would not give any indication of who would be responsible for the area designation. In comparison with Art. 17 (3) (b) (i) RED, which stipulates that areas can be designated by law of the relevant competent authority, it is unlikely that such a gap was intended for Art. 17 (3) (b) (ii) RED. The designation is certainly not undertaken by the Commission, which is charged with the recognition of areas under Art. 17 (3) (b) (ii) RED in order for them to become no-go areas under RED (see Art. 18 (4) subpara. 2, sentence 3, (5) RED). Accordingly, the scope of application of Art. 17 (3) (b) (ii) RED is limited. Moreover, at least some of the areas covered will already fall under Art. 17 (3) (b) (i) RED.



4.1.2.3 The Commission decision

In order to be declared a no-go area for the purposes of Art. 17 to 19 RED, areas featuring in international agreements, lists by intergovernmental organisations and the IUCN have to be recognised by the Commission (Art. 17 (1) (b) (ii), Art. 18 (4) subpara. 2, sentence 3 RED) (whereas there is no Commission recognition requirement for areas designated by or under national law according to Art. 17 (3) (b) (i) RED: these areas are considered no-go areas without further requirements). While the requirement for Commission recognition provides some degree of harmonised application, it also has disadvantages. 29

Art. 17 (3) (b) (ii) RED: “ausgewiesene Flächen: […] für den Schutz seltener, bedrohter oder gefährdeter Ökosysteme oder Arten, die in internationalen Übereinkünften anerkannt werden oder in den Verzeichnissen zwischenstaatlicher Organisationen oder der Internationalen Union für die Erhaltung der Natur aufgeführt sind [...].” Notably s. 4 (4) BioSt-NachV and Biokraft-NachV have transferred this ambiguity into national law.

30

Art. 17 (3) (b) (ii) RED: “areas designated: […] for the protection of rare, threatened or endangered eco­systems or species recognised by international agreements or included in lists drawn up by intergovernmental organisations or the International Union for the Conservation of Nature [...].” Notably, RSB, Consolidated RSB EU RED Principles & Criteria for Sustainable Biofuel Production, RSBSTD-11-001-01-001 [2011]. changes the meaning of the phrase by the introduction of a simple comma: “areas designated for the protection of rare, threatened or endangered ecosystems or species, [emphasis added] recognised by international agreements or included in lists [...].

31

Art. 17 (3) (b) (ii) RED “zones affectées: […] à la protection d’écosystèmes ou d’espèces rares, menacés ou en voie de disparition, reconnues [emphasis added] par des accords internationaux ou figurant sur les listes établies par des organisations intergouvernementales ou par l’Union internationale pour la conservation de la nature”.

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The Commission decision may take some time, which delays the coming into effect of the no-go area.32 For areas designated for the protection of rare, threatened or endangered species according to Art. 17 (3) (b) (ii) RED to be recognised, they must meet adequate standards of objectivity and coherence with internationally recognised standards and provide for an appropriate appeal procedure (Art. 18 (5) sentence 3 RED). These requirements differ from those for the recognition of bi- and multilateral agreements and voluntary schemes for the purpose of compliance control, which require adequate standards of reliability, transparency and independent auditing (Art. 18 (5) sentence 1, 2 RED). It has to be stressed that the Commission does not designate areas, but recognises designated areas. It does not create no-go areas or concretise multilateral agreements into no-go areas, based on general criteria established for example under the CBD. Therefore, Commission recognition is not a suitable instrument to reinforce the general requirements in multilateral environmental agreements, let alone increase compliance with them. The Commission decision on a designated area is to be taken according to the advisory Comitology procedure (Art. 18 (6), 25 (3) RED). Thus, the Commission is aided in taking decisions on the recognition of designated areas by the Committee on the sustainability of biofuels and bioliquids. Unlike for the Commission decision on grasslands (Art. 17 (3) (c) RED) and the adaptation of the provisions on GHG emissions (Art. 19 (7) RED), the concrete individual decision on designated areas is not taken according to the regulatory procedure with scrutiny but under the advisory procedure (Art. 25 (3) RED). Although the Comitology Decisions have been repealed, the comitology procedures are preserved under Art. 291 (2) to (4) TFEU according to which the Commission can be transferred the competence to adopt implementing acts. Even though Art. 291 TFEU does not explicitly require this, Regulation 182/2011 laying down the modalities for implementing acts has perpetuated, with some changes, the comitology procedures. The advisory procedure is now contained in Art. 4, 10 Regulation 182/2011. Accordingly, the criticism against Comitology for its lack of transparency and lack of democratic legitimacy still stands.33 However, to some degree legitimacy is mediated by the legislative procedure of the basic act as well as the scientific expertise in the committees.34 Whereas under the advisory procedure, the Commission is merely required to take “utmost account” of the expert committee’s opinion, under Art. 11 Regulation 182/2011, European 32

Ludwig, G., “Nachhaltigkeitsanforderungen beim Anbau nachwachsender Rohstoffe im europäischen Recht,” Zeitschrift für Umweltpolitik und Umweltrecht (2009) 317-321: 319.

33

See Brandsma, G. J. “Accountable comitology?”. Chap. 7 In The Real World of EU Accountability: What Deficit?, edited by Bovens, M., Curtin, D., and Hart, P. T., 150-173, 2012. See also Winter, G., “Kompetenzverteilung und Legitimation in der Europäischen Mehrebenenverwaltung,” Europarecht 40, no. 3 (2005) 255-276: 268.

34

ECJ, 25/70 (Köster) [1970] ECR 1161, para. 6; ECJ, C-240/90 (Germany v. Commission) [1992] ECR I-5383, 37 foll. , 2005 #1286. See also Art. 290 (1) Subpara. 2 s. 2 TFEU.

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Parliament now have a right to scrutinise whether the Commission exceeded its competences, alleviating the conflict on legitimacy. As required by ECJ case law (see below, section 3.2.1.4), the essential provisions have been contained in the basic act: Art. 18 (5) sentence 3 RED provides a general benchmark for recognition, requiring a specific list of areas of high biodiversity value that shall meet adequate standards of objectivity and coherence with internationally recognised standards, and provide for appropriate appeal procedures.35 Notably, the export states are not parties to the Commission recognition process. Even though designated areas within those states may gain importance through the referral in the sustainability criteria, the impact of this missed opportunity for participation does not seem severe. If an area is recognised in an international agreement, all contracting parties were already involved in the decision making process, where consensus is usually required, as it is the most common approach in international law.36 Where an area is listed as a wetland of international importance under the Ramsar Convention, it has been designated by the contracting party. World heritage sites are designated based on the inventory submitted by the contracting party (Art. 11 World Heritage Convention). Accordingly, where an area is designated, the participation of the resource state has been taken place. However, considering that areas and lists under Art. 17 (3) (b) (ii) RED are used for a purpose they were not designed for at the time of the participation, participation of the resource states might nonetheless be desirable as it impacts on these states’ jurisdiction. Moreover, it would recognise the need for acceptance or acceptability of the mechanism in resource states. In addition, it can be argued that the participation requirement should also be extended in this case to the declaration of areas designated for nature protection under national law as no-go areas, where the area is situated outside the EU Member States’ territory. However, possibly due to its limited scope of application, no recognition decision has yet been taken by the Commission.



4.2 Forests

Art. 17 (3) (a) RED excludes primary forest and other wooded land for their biodiversity value, while Art. 17 (4) (b), (c) RED excludes continuously forested or wooded land irrespective of its biodiversity value because of their high carbon stock.

35

These are alternative, not cumulative with the requirements on agreements and standards in Art. 18 (5) sentence 1 RED, whose criteria suggest that it only applies to compliance control.

36

Wang, C., “Issues on consensus and quorum at international conferences,” Chinese Journal of International Law 9, no. 4 (2010) 717-739.

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4.2.1 Primary forest

Under Art. 17 (3) (a) RED, an area is excluded if it is “primary forest and other wooded land, namely forest and other wooded land of native species, where there is no clearly visible indication of human activity and the ecological processes are not significantly disturbed.” The use of the terms “clearly” and “significantly” is bound to raise conflict around their interpretation, and the existence of native species, human activities and intact ecological processes are broad terms upon which the classification of no-go areas depends. Beyond the qualitative threshold for biodiverse forests, the term forest is not defined in RED, although the requirements for wooded land as carbon sinks may serve as an indication on the minimum requirements. However, numerous – partly contradicting – definitions of forests exist, driven by the purpose of the agreements that specified them.37 Bodies such as the FAO, the CBD and the UNFCCC each use different nomenclature38 and have different requirements on canopy cover, height and minimum area.39 Accordingly, it will be difficult to establish an international standard of protection from the various definitions. Unlike for grasslands, the Commission is not required to define further its 37

UNFF. “Intersessional experts’ meeting on the role of planted forests in sustainable forest management, Wellington, New Zealand.” New York, 2003. For example, the FAO definitions are typically applied to monitoring and reporting. The UNFCCC definition seeks to facilitate policy making on climate change. The CBD or ITTO definitions apply both to policy making and monitoring. Thus, the harmonisation is an on-going issue, as the different definitions lead to inconsistent data and thus losses in forest assessment and management and ultimately in forest protection.

38

For example, the CBD works on primary forest, secondary forest, plantation forest, the ITTO on primary forest, modified natural forest, planted forest. The IPCC refers to natural, unmanaged forest. The UNFCCC, focussing on climate change mitigation, differentiates forest land unmanaged, managed and afforested/reforested. Different emphasis is placed on human intervention or the origin of tree species. FAO. “Third expert meeting on harmonizing forest-related definitions for use by various stakeholders.” Rome, 2005, 5, 29 foll.

39

FAO. “Land spanning more than 0.5 hectares with trees higher than 5 metres and a canopy cover of more than 10%, or trees able to reach these thresholds in situ. It does not include land that is predominantly under agricultural or urban use.” CBD/UNEP 2001. “Forest is a land area of more than 0.5 ha, with a tree canopy cover of more than 10%, which is not primarily under agriculture or other specific non-forest land use. In the case of young forest or regions where tree growth is climatically suppressed, the trees should be capable of reaching a height of 5 m in situ, and of meeting the canopy cover requirement.” UNFCCC. “Forest is a minimum area of land of 0.05-1.0 hectares with tree crown cover (or equivalent stocking level) of more than 10-30 per cent with trees with the potential to reach a minimum height of 2-5 metres at maturity in situ. A forest may consist either of closed forest formations where trees of various storeys and undergrowth cover a high proportion of the ground or open forest. Young natural stands and all plantations which have yet to reach a crown density of 10-30 per cent or tree height of 2-5 metres are included under forest, as are areas normally forming part of the forest area which are temporarily unstocked as a result of human intervention such as harvesting or natural causes but which are expected to revert to forest.”

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chosen denomination. 40 However, harmonisation efforts have been undertaken under the auspices of the FAO. 41 In fact, the definition in Art. 17 (3) (a) corresponds to that of primary forest in the FAO Forest Resource Assessment, which is also used by states to report on primary forests (see recital 69). 42



4.2.2 Continuously forested areas and woodland

While the protection of primary forests follows a qualitative threshold, the threshold for the consideration of continuously forested land and woodland as a carbon sink under Art. 17 (4) (b), (c) RED is quantitative, relying on canopy cover. Both categories of forest may coincide, so that a specific area may be excluded both for its biodiversity and carbon storage value. According to Art. 17 (4) (b) RED, “continuously forested areas, namely land spanning more than one hectare with trees higher than five metres and a canopy cover of more than 30%, or trees able to reach those thresholds in situ;” are no-go areas. In addition, “land spanning more than one hectare with trees higher than five metres and a canopy cover of between 10 % and 30 %, or trees able to reach those thresholds in situ,” shall be excluded, but land in this category may be exploited if the required GHG balance (currently 35% reduction compared to fossil fuels) is observed (Art. 17 (4) (c); (2) RED). Instead of calculating the actual carbon storage capacity, forested areas and woodland are defined as no-go areas based on their average carbon storage. Additional requirements on canopy cover, size and height of trees (as are necessary under the climate change regime 43) are not required. As canopy height is seldom addressed in maps, canopy cover appears to be a suitable differentiating factor. 44 Moreover, considering the broad variations in definitions of different degrees of managed forests, 45 canopy cover also appears the most practical approach. No distinction between the primary, secondary, and planted forest 40

Ludwig, G., “Nachhaltigkeitsanforderungen beim Anbau nachwachsender Rohstoffe im europäischen Recht,” Zeitschrift für Umweltpolitik und Umweltrecht (2009) 317-321: 319.

41

FAO. “Third expert meeting on harmonizing forest-related definitions for use by various stakeholders.” Rome, 2005.

42

FAO. “Global Forest Resources Assessment.” Rome, 2010, Annex II. The FAO definition additionally requires natural regeneration, which differentiates primary forest and other natural forest from planted forest, but is already contained in the requirement of no significant disturbances.

43

UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/KP/ CMP/2005/8/Add.3 [2005], Annex para. 1a). According to UNFCCC/KP COP/MOP 6, Decision 2/CMP.6: The Cancun Agreements: Land use, land-use change and forestry FCCC/KP/CMP/2010/12/Add.1 Para 1 [2011], para. 2., the definitions still apply in the second commitment period.

44

Dehue, B. et al. “Inventory of data sources and methodologies to help economic operators identify land status relating to EU sustainability criteria for biofuels and bioliquids.” Utrecht: Ecofys Netherlands, 2011, 86.

45

FAO. “Third expert meeting on harmonizing forest-related definitions for use by various stakeholders.” Rome, 2005, 35.

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classifications is necessary. 46 In particular, the scope of the area exclusion is expanded to plantations. The definition focuses only on canopy cover, i.e. a quantitative measure. This takes no account of biodiversity beyond primary forests. In addition, potential synergy effects between climate change mitigation and biodiversity protection are lost – this definition also does not give credit to the fact that areas that are high in biodiversity also store higher levels of carbon (see above, section 1.2.1.1). Thus, biodiversity outside primary forests is not protected by the declaration of continuously forested areas and woodland as no-go areas. The focus on canopy cover also means that conversions between these different uses are not considered land use changes, so long as the minimum canopy cover is preserved: even monocultural palm oil plantations could be considered to be protected carbon sinks, despite their severe environmental impacts through deforestation and pollution (see above, section 1.2.4).



4.3 Highly biodiverse grasslands

Grasslands are less likely than forests to be incorporated into protection zones covered by Art. 17 (2) (b) RED, as the biodiversity of grassland is much less in the public eye than forests, as many species are inconspicuous and/or live under the surface. 47 According to Art. 17 (3) (c) RED, natural or nonnatural grasslands, which are also an important carbon sink, 48 are excluded if they are highly biodiverse.



4.3.1 Grasslands

RED does not include a definition of grasslands, but rather a requirement for the commission to identify criteria and ranges to define it (Art. 17 (3) subpara. 2 RED). Recital 69 gives examples of grassland ecosystems, “both temperate and tropical, including highly biodiverse savannahs, steppes, scrublands and prairies”, terms that in turn require definition and may overlap with other excluded ecosystems with different exemptions for cultivation. Further criteria and geographic ranges shall be provided through a Commission decision according to Art. 17 (3) (c) RED under the regulatory procedure with scrutiny, as for amendments to calculation of the GHG balance (Art. 25 (4) RED). Although 46 47

Ibid., 35 foll.

IPCC. “Climate Change 2007: impacts, adaptation and vulnerability – Working Group II contribution to the Fourth Assessment Report.” Cambridge, New York: Cambridge University Press, 2007, 224; Coupland, R. T., Grassland ecosystems of the world: analysis of grasslands and their uses (Cambridge: Cambridge University Press, 1979), 23 foll.

48

White, A., Cannell, M. G. R., and Friend, A. D., “Climate change impacts on ecosystems and the terrestrial carbon sink: a new assessment,” Global Environ. Change 9 Supplement 1(1999) S21-S30: S26; Caquet, B. et al., “Soil carbon balance in a tropical grassland: estimation of soil respiration and its partitioning using a semi-empirical model,” Agr. Forest Meteorol. 158–159(2012) 71-79.

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Art. 290 TFEU now provides a regulatory procedure for delegated acts deemed to replace this comitology procedure, it has been perpetuated under Art. 12 Regulation 182/2011 (see above). Recital 69 stresses that the Commission definition shall be reached “in accordance with the best available scientific evidence and relevant international standards”. Numerous international standards define the notion of grassland, mainly by exclusion from other areas such as arable lands49 or forests,50 depending on the scope and focus of the agreement or standard. Accordingly, the IPCC describes grassland as an area where below-ground carbon dominates, mainly contained in roots and soil organic matter.51 Some definitions include the vegetation type (e.g. perennial grasses) and predominant land use (e.g. grazing).52 Under the CBD, a loose definition of grassland has been proposed, defined as areas dominated by grasses or grass-like plants, with few woody plants.53 In the Global Biodiversity Outlook “natural grassland ecosystems are typically characterised by three main features: periodic drought, fire and grazing by large herbivores.”54 However, as this definition did not make it into the SBSTTA Recommendation V/855 or the ensuing COP 5 Decision V/23,56 it cannot be considered an international standard. The most widely accepted definition is suggested by White et al (2000), based on the vegetative morphology, providing the most global approach:57 grass49

In the Commission Decision 2000/115/EC on definitions relating to the Common Agricultural Policy, permanent grassland and meadow were defined as “land other than rough grazing and non-used pasture, not included in the crop rotation system, used for the permanent production (5 years or longer) of green forage crops [...]”Commission, Decision 2000/115/EC relating to exceptions to the definitions and the regions and districts regarding the surveys on the structure of agricultural holdings, OJ [2000] L 38/1, F/01.

50

IPCC, Good practice guidance for land use, land-use change and forestry (GPG-LULUCF) [2003], 3.105. Although the definition based on canopy cover can be measured in remote sensing data, it has to be borne in mind that savannahs and agro-forestry systems can show significant tree cover with a herbaceous layer almost independent from the trees above. Hennenberg, K. J. et al. “Specifications and recommendations for “grassland” area type – GTZ project for the practical implementation of BioStNachV.” Darmstadt: Öko-institut, 2009, 5.

51

IPCC, Good practice guidance for land use, land-use change and forestry (GPG-LULUCF) [2003], 3.105.

52 53

Ibid.

CBD SBSTTA, Biological diversity of dryland, mediterranean, arid, semi-arid grassland and savannah ecosystems: options for the development of a programme of work [1999], 6.

54 55

CBD Secretariat. “Global Biodiversity Outlook 1.” Montreal: CBD, 2001, 100.

Subsidiary Body on Scientific Technical and Technological Advice (SBSTTA). “Biological diversity of dryland, mediterranean, arid, semi-arid, grassland and savannah ecosystems: options for the development of a programme of work.” edited by CBD SBSTTA. Montreal: CBD, 2000.

56

CBD COP 5, Decision V/23: Consideration of options for conservation and sustainable use of biological diversity in dryland, Mediterranean, arid, semi-arid, grassland and savannah ecosystems, UNEP/CBD/COP/5/23 [2000].

57

Hennenberg, K. J. et al. “Specifications and recommendations for “grassland” area type – GTZ project for the practical implementation of BioSt-NachV.” Darmstadt: Öko-institut, 2009, 8.

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lands are “terrestrial ecosystems dominated by herbaceous and shrub vegetation and maintained by fire, grazing, drought and/or freezing temperatures”.58 A similar definition has been suggested in Commission public consultation, which closed 8 February 2010, as “an area where a continuum of grasses or grass-like plants with few woody plants grows.” Such a definition appears more suitable in reflecting the protection of grasslands because of a high biodiversity status. However, no decision has yet been taken. Thus, the implementation period for the Member States has expired before the grassland exclusion is made operational by a Commission decision.59



4.3.2 Natural or non-natural

RED excludes both natural and non-natural grasslands. Natural grassland is that which “would remain grassland in the absence of human intervention and which maintains the natural species composition and ecological characteristics and processes” (Art. 17 (3) (c) (i) RED). The distinction may have been used to clarify that the European landscape, with its considerable human influence, shall be included. The recurrence to the notion of “natural” is rather unscientific, as both grasslands are technically “nature”. In its draft consultation paper, the Commission suggested a definition of natural grassland by the lack of anthropogenic alteration: “grassland that has not been sown and is maintained as grassland by the influence of natural factors such as natural fires, grazing by wild animals, (periodic) drought or freezing temperatures”60 – but other definitions have been used elsewhere.61 Non-natural grassland is usually not addressed in international agreements. The requirement for the preservation of non-natural grassland is not clear-cut. Natural ecosystems that would develop in its place are not automatically less valuable. According to Art. 17 (3) (c) (ii) RED, non-natural grassland is “grassland that would cease to be grassland in the absence of human intervention and which is species-rich and not degraded, unless evidence is provided that the harvesting of the raw material is necessary to preserve its grassland status”. In its draft consultation paper, the European Commission suggested a definition of non-natural grasslands “an area whose condition as grassland is maintained [for at least [5] years] as a result of human intervention such as ploughing, sowing, mowing or livestock grazing.” Hence, the difference is whether the grassland 58

White, R., Murray, S., and Rohweder, M. “Pilot analysis of global ecosystems – grassland ecosystems.” Washington: World Resources Institute, 2000, 1.

59

The national implementations are not necessarily any help: For example, the German implementation does not contain its own definition of grassland, but states that biodiverse grassland as defined by the European Commission definitely falls under the definition (s. 6 BioSt-NachV and Biokraft-NachV).

60 61

Commission, Draft consultation paper on the definition of highly biodiverse grasslands [2010].

e.g. “grassland that was not created by seeding or ploughing” See Suttie, J. M., Reynolds, S. G., and Batello, C. “Grasslands of the World.” Rome: FAO, 2005, 2.

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has to be farmed in order to stay grassland (and is hence non-natural), or if it is the “normal” state of affairs (i.e. natural). Notably, non-natural grassland may be harvested if it is necessary to preserve the character as grassland. For natural grasslands, no exemption exists.



4.3.3 Highly biodiverse

Unlike for primary forests or areas designated for conservation purposes, grasslands explicitly must be highly biodiverse. The level of biodiversity is only outlined in Art. 17 (3) (c) RED, and is different for natural and nonnatural grassland. Natural grassland must present a natural species composition and intact ecological characteristics and processes, non-natural grassland must be species-rich and not degraded, without reference to ecosystem functions. The Commission consultation paper proposes more-detailed criteria: a large variety of different species, a large variety of the same species or the natural occurrence of species of high importance. All definitions diverge from the CBD definition of biodiversity with its three organisational levels: ecosystem, taxonomic and genetic diversity. Responses to the public consultation stressed the importance of regionally adapted criteria and methods.62 Nonetheless, no implementing measure has yet been taken by the Commission to define high biodiversity for grasslands, as required under Art. 17 (3) (c) subpara. 2 RED.



4.4 Wetlands & peatland

Under Art. 17 (4) (a), (5) RED, wetlands and peatland are no-go areas, although for different reasons and under different conditions.



4.4.1 Wetlands for carbon storage

While wetlands are often high in biodiversity, they are excluded from cultivation not for their biodiversity value, but because of their carbon storage potential. Wetlands are at the boundary between land– and water–dominated ecosystems, and are defined as “land that is covered with or saturated by water permanently or for a significant part of the year” (Art. 17 (4) (a) RED). The definition of wetlands in RED is less detailed than the Ramsar Convention, under which “...wetlands are areas of marsh, fen, peatland or water, whether natural or artificial, permanent or temporary, with water that is static or flowing, fresh, brackish or salt, including areas of marine water the depth of which at low tide does not exceed six metres.” (Art. 1.1 Ramsar Convention). Except for the water depth, the lack of examples and clarifications in RED do not however affect the content of the definition. 62

Hennenberg, K. J. et al. “Specifications and recommendations for “grassland” area type – GTZ project for the practical implementation of BioSt-NachV.” Darmstadt: Öko-institut, 2009, 16.

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4.4.2 Peatland

While peatland is also high in carbon storage capacity, it has been regulated in a separate paragraph to carbon sinks and biodiversity (Art. 17 (5) RED). Peatland can be considered as one specific type of wetland where a certain amount of peat soil, semi-decayed plant material, has accumulated over five to eight thousand years. However, the term peatland is not defined by the RED, leaving the power of interpretation to the Member States.



4.5 The conditionality of area exclusions

Only primary forest, forested areas, natural grasslands and wetlands are excluded from conversion and cultivation outright. In areas designated for protection purposes, cultivation and extraction of produce is permissible where “evidence is provided that the production of that raw material did not interfere with those nature protection purposes” (Art. 17 (3) (b) RED). Unlike wetlands in general, peatlands are only excluded where biomass production causes drainage (Art. 17 (5) RED). Wooded land with a canopy cover between 10% and 30% is not excluded where a conversion does not jeopardise compliance with the requirements on the reduction of the GHG emission balance (Art. 17 (4) (c) RED). Where the conditions for multiple area exclusions are fulfilled, the conditional exemptions that would permit production in one no-go area cannot be extended to all areas, as that would remove the distinction between different exclusions. The conditionality of no-go areas converts the exclusion from exploitation into a test of whether exploitation would damage the environmental concern.63 The conditional exemptions may cause problems in interpretation and may provide a loophole for exploitation. Formulations usually require the producer to “provide evidence”, placing the burden of proof on the producer but no further standards or procedures regulate the exploitation of these areas.



4.6 The reference year

The reference year for the no-go areas has been highly disputed in the legislative process, with parliamentary committees proposing dates between 200364 and 2008.65 In Art. 17 (3) to (5) RED, January 2008, the date of 63

Lee, Y. H., Bückmann, W., and Haber, W., “Bio-Kraftstoff, Nachhaltigkeit, Boden- und Naturschutz,” NuR 30, no. 12 (2008) 821-831: 831.

64

European Parliament – Committee on Industry Research and Energy (ITRE), Report on the proposal for a Directive of the European Parliament and of the Council ont he promotion of the use of energy from renewable sources, A6-0369 [2008], amendment 152.

65

European Parliament – Committee on Agriculture and Rural Development (AGRI), Opinion for the Committee on Industry, Research and Energy on the Commission proposal for a Directive for the promotion of

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the Commission proposal, has been retained. However, the purpose of the cutoff date differs depending on the reason for the area exclusion. Areas that are excluded because of their biodiversity status, primary forest and other biodiverse wooded land, areas designated for protection purposes and highly biodiverse grassland have to have this status in or after January 2008. For peatland, only the area status in January 2008 is relevant, but not its later status. Biodiverse forests, grasslands and designated areas are also excluded if the land status arises after January 2008 (Art. 17 (3) RED). Notably, as a grassland definition has not yet been reached, the determination of the status of an area under this definition at a later point becomes more and more difficult. This is especially the case where official records do not exist or might not be trustworthy (see below, section 4.7). Areas excluded because of their carbon stock, notably wetlands, continuously forested areas and wooded land are excluded only if the area had that status in January 2008 but has since lost it. Thus, these ecosystems are only excluded where a land use change has occurred. Art. 17 (4) subpara. 2 RED explicitly states that an area is not excluded, where at the time of cultivation or harvesting, it still has the same status as in January 2008, i.e. as wetland, continuously forested area or wooded land. Accordingly, an extraction of raw material in continuously forested areas and wooded land is still permissible as long as the canopy cover requirements are observed, preserving the area classification. Thus, the impact of the exclusion of these areas is limited considerably by the choice of timeframe. Even though the protection is awarded retrospectively from 2008, it is difficult to assess retrospectively whether a conversion has occurred, and particularly at the expense of valuable species or ecosystems. In developing and newly industrialised countries, maps and other records of rare or endangered species will not be readily available and accessible. The reference year could thus lead to the creation of a fait accompli and drive the conversion of land before a potential protection status is officially established.66



4.7 The identification of pertinent areas

In order to ascertain whether a batch of biofuels or bioliquids was produced using feedstock from a no-go area, the land status must be assessed. Data must be collected both on the identification of areas and on compliance monitoring, including the management of the areas in question. Art. 17 to 19 RED do not prescribe specific methods of information gathering. Information on the land status can be made available through remote sensing, from maps and registries and through on-site assessment. While for national protecthe use of energy from renewable sources, COD [2008] 0016, amendment 56-58. 66

Ludwig, G., “Nachhaltigkeitsanforderungen beim Anbau nachwachsender Rohstoffe im europäischen Recht,” Zeitschrift für Umweltpolitik und Umweltrecht (2009) 317-321: 319.

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tion zones, the spatial determination may be relatively straightforward, areas to be recognised by Commission decision according to Art. 17 (3) (b) (ii) RED will require access to local legislative provisions and administrative documents. Access to these documents may prove difficult, in particular where a developing or newly industrialised country is promoting production rather than biomass conservation.67



4.7.1 Remote sensing

Remote sensing provides geospatial information through sensors on satellites or aircraft, usually accessed through a Geographic Information System (GIS). Several global data sources on land status have been generated from remote sensing data from different satellite sensors, and thus different classification methods have been developed,68 varying in the quantity and quality of information. The World Database of Protected Areas (WDPA) contains information on marine and terrestrial protected areas worldwide identified by the United Nations Environmental Programs World Conservation Monitoring Centre (UNEP-WCMC) collected from various sources.69 The FAO published its most recent Global Remote Sensing Survey under its Global Forest Resources Assessment Programme in 2010, based on 2005 data.70 For forests, data on both slow and rapid changes are generally available.71 For grasslands, wetlands and peatlands, the available data is much more limited.72 67

Ibid.

68

Hennenberg, K. J. et al. “GTZ-Vorhaben zur praktischen Umsetzung der BioSt-NachV – Teilprojekt flächenbezogene Anforderungen (§§ 4-7 + 10) – Analyse globaler Datensätze.” Darmstadt: Öko-Institut, 2009, 4.

69 70 71

http://www.wdpa.org (20/5/2012).

FAO. “Global Forest Resources Assessment.” Rome, 2010.

For example, forest cover can for example be assessed with the Moderate Resolution Imaging Spectroradiometer (MODIS) Vegetation Continuous Field (VCF) tool, which contains data for the year 2000. For tropical rainforest, the data has been validated through Landsat data with a higher resolution. Hansen, M. C. et al., “Humid tropical forest clearing from 2000 to 2005 quantified by using multitemporal and multiresolution remotely sensed data,” Proceedings of the National Academy of Sciences of the United States of America 105, no. 27 (2008) 9439-9444. Information on forests can be drawn from the Intact Forest Landscape Database, which uses a slightly different definition of primary forest. However, it is not considered suitable for compliance monitoring. Dehue, B. et al. “Inventory of data sources and methodologies to help economic operators identify land status relating to EU sustainability criteria for biofuels and bioliquids.” Utrecht: Ecofys Netherlands, 2011, 35.

72

Kennedy, R. E. et al., “Remote sensing change detection tools for natural resource managers: understanding concepts and tradeoffs in the design of landscape monitoring projects,” Remote Sensing of Environment 113, no. 7 (2009) 1382-1396. The Ramsar Sites Information Service contains GIS data on wetlands. Wetlands are also documented in the Global Lakes and Wetlands Database (GLWD) which is

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However, data is not necessarily available in the quality and quantity required for the assessment of the land status under RED. Geographic data from remote sensors that completely complies with the requirements of the RED is not readily available.73 Besides issues of data quality, global data usually provides a snapshot, and such a snapshot is only rarely available for January 2008. Hence, the relevance of the information may be challenged.74 However, the use of data from after 2008 can be useful for deducing the 2008 status, and is more likely to be available.75 Land types defined in existing data sources may not always match those in the RED. Even though the land cover classifications are often similar, different sensors and different spectral and geographical resolution mean that remote sensing data is often not directly comparable.76 While data are available for many different ecosystems, the resolution – which is a major driver of the costs of remote sensing – is usually not sufficient for the implementation of the sustainability criteria.77 Geospatial data, registries and inventories may address land cover, but are not sufficient to fully assess the variety of ecosystems such as different forest types,78 biodiversity status including the composition of species based on the Ramsar definition, but with data from 2004 without plans of actualisation. For peatland, the Harmonised World Soil Database gives a (partly) global image, and the Global Peatland Initiative holds a database – neither of which is currently available for the reference year 2008. Hennenberg, K. J. et al. “GTZ-Vorhaben zur praktischen Umsetzung der BioSt-NachV – Teilprojekt flächenbezogene Anforderungen (§§ 4-7 + 10) – Analyse globaler Datensätze.” Darmstadt: Öko-Institut, 2009, 20 foll. 73

Dehue, B. et al. “Inventory of data sources and methodologies to help economic operators identify land status relating to EU sustainability criteria for biofuels and bioliquids.” Utrecht: Ecofys Netherlands, 2011, 17.

74

Hennenberg, K. J. et al. “GTZ-Vorhaben zur praktischen Umsetzung der BioSt-NachV – Teilprojekt flächenbezogene Anforderungen (§§ 4-7 + 10) – Analyse globaler Datensätze.” Darmstadt: Öko-Institut, 2009, 6 foll., 25.

75

Dehue, B. et al. “Inventory of data sources and methodologies to help economic operators identify land status relating to EU sustainability criteria for biofuels and bioliquids.” Utrecht: Ecofys Netherlands, 2011, 18.

76

Hennenberg, K. J. et al. “GTZ-Vorhaben zur praktischen Umsetzung der BioSt-NachV – Teilprojekt flächenbezogene Anforderungen (§§ 4-7 +10) – Methoden zum Nachweis des Biodiversitätsstatus von Land.” Darmstadt: Öko-Institut, 2009, 4.

77

Hennenberg, K. J. et al. “GTZ-Vorhaben zur praktischen Umsetzung der BioSt-NachV – Teilprojekt flächenbezogene Anforderungen (§§ 4-7 + 10) – Analyse globaler Datensätze.” Darmstadt: Öko-Institut, 2009, 25. The resolution available differs considerably; for example Landsat has a resolution of 30m, MODIS f 250m. Spatial resolution 60m, preferably 30m would be required. Dehue, B. et al. “Inventory of data sources and methodologies to help economic operators identify land status relating to EU sustainability criteria for biofuels and bioliquids.” Utrecht: Ecofys Netherlands, 2011, 14 foll.

78

Thenkabail, P. S. et al., “Hyperion, IKONOS, ALI, and ETM+ sensors in the study of African rainforests,” Remote Sensing of Environment 90, no. 1 (2004) 23-43; Potapov, P. et al., “Mapping the world’s intact forest landscapes by remote sensing,” Ecol. Soc. 13, no. 2 (2008) Art. 51.

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or ecosystem services such as the water balance.79 High-resolution satellite imaging systems, which do not have to rely on modelling for species composition, have shown some first successes in identifying species directly,80 but are not yet operational. Human activity as required for the determination of nonnatural grassland or under the forest definition such as fragmentation or fire is equally difficult to measure.81 Accordingly, many databases can only be used for a first exploration.82 However, most databases are not sufficient to prove that land is not a no-go area, as they are not exhaustive. These problems may reduce over time as the availability of usable remote sensing data is rapidly increasing. However, the validation of remote sensing data (“ground truthing”) is essential.83



4.7.2 Plans, registries and databases

In order to ascertain land status, national plans, registries and inventories can be consulted. However, as the area types are defined differently in different countries, an on-site assessment may still need to be undertaken. However, this requires considerable expertise on local conditions. Not only the available information, but also its credibility have to be assessed. For example, the Indonesian National Parks Information website provides information on geographical coordinates of protection zones, but usually no details on borders or contact data on the competent authority.84 Accordingly, information collected from this website is not sufficient in determining the area character. 79

Dehue, B. et al. “Inventory of data sources and methodologies to help economic operators identify land status relating to EU sustainability criteria for biofuels and bioliquids.” Utrecht: Ecofys Netherlands, 2011, 81. for the example of wetlands.

80

Gillespie, T. W. et al., “Measuring and modelling biodiversity from space,” Progress in Physical Geography 32, no. 2 (2008) 203-221.

81

Jha, C. S. et al., “Forest fragmentation and its impact on species diversity: an analysis using remote sensing and GIS,” Biodiversity and Conservation 14, no. 7 (2005) 1681-1698. For example natural and human fires are differentiated indicated by the distance to human infrastructure. Burns, S., Tapper, N., and Packham, D. “The spatial and temporal distribution of dry season fires on indigenous lands of North-Central Arnhem Land: a feasibility study using MODIS satellite imagery.” In Proceedings of SSC 2005 Spatial Intelligence, Innovation and Praxis, edited by Institute, S. S., 89-98. Melbourne: Spatial Sciences Institute, 2005.

82

Dehue, B. et al. “Inventory of data sources and methodologies to help economic operators identify land status relating to EU sustainability criteria for biofuels and bioliquids.” Utrecht: Ecofys Netherlands, 2011, 86.

83

Hennenberg, K. J. et al. “GTZ-Vorhaben zur praktischen Umsetzung der BioSt-NachV – Teilprojekt flächenbezogene Anforderungen (§§ 4-7 +10) – Methoden zum Nachweis des Biodiversitätsstatus von Land.” Darmstadt: Öko-Institut, 2009, 4, 24.

84

Dehue, B. et al. “Inventory of data sources and methodologies to help economic operators identify land status relating to EU sustainability criteria for biofuels and bioliquids.” Utrecht: Ecofys Netherlands, 2011, 53.

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Again, it may be difficult to collect information on the land status at the reference date of January 2008.



4.7.3 On-site assessment

Considering the limitations of remote sensing data and registries, on-site assessment is crucial. On-site assessment means visual inspections, inventories and physical measurements. Where no data for January 2008 is available, land status may be clarified by interviews. In conclusion, on site assessments remain crucial for economic operators interested in cultivation of specific areas, operators charged with compliance control as well as regulators such as the EU and its Member States in assessing the success of their regulatory scheme.



4.7.4 Analysis

Several instruments and methods are available to assess the character of an area. Notably, Art. 17 to 19 RED do not prescribe a methodology for assessing if an area qualifies as no-go area. Moreover, no requirements are made to update relevant information. However, in particular in resource states suffering from high corruption, the credibility of the data may be compromised. Thus, a major factor in ensuring compliance with the sustainability criteria and thus realising the potential of Art. 17 to19 RED to reinforce national standards in resource states, is not addressed. Moreover, the guidance provided in the requirements of auditing (see section 5.3), also do not address these issues in depth. Determining the status of an area at the reference date of January 2008 is particularly problematic, and these problems will increase with time.



4.8 Analysis

The area exclusions have the potential to contribute to the protection and conservation of the enumerated areas. Especially in the forestry sector, the reference to primary forests may reinforce the protection status in real terms of these areas. However, beyond primary forests, the RED definition of forests only imposes quantitative rather than qualitative requirements. The no-go area of grasslands is not yet operationable. For some ecosystems, the classification as a no-go area does not actually mean no-go, but requires certain management practices. Thus, the area exclusions are far from providing a hard and solid framework on the protection of highly biodiverse ecosystems and carbon sinks. Every “weak spot” and exception contained in the sustainability criteria limits their ability to reinforce national standards in resource states with low enforcement rates. This is even more the case since the sustainability criteria do not establish any procedural safeguards on the determination of the

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areas in question. Thus, not only are the area exclusions not stringent enough to provide comprehensive protection of biodiversity and carbon sinks, but their assessment as precondition for their protection is not ensured. Moreover, it is questionable whether the area exclusions are a sufficient condition for the preservation of the enumerated ecosystems. The sustainability criteria do not attempt to protect biodiversity overall, but take the more limited approach of excluding from cultivation and harvesting specific ecosystems and protection zones that are particularly high in biodiversity or have a particularly high carbon storage capacity.



4.8.1 The consistency of the no-go areas

Ecosystems protected for their biodiversity value and for carbon storage capacity are not always distinct. Carbon sinks and high biodiversity often coincide, such as in primary forest. Although wetlands often feature high biodiversity, they are included in RED as carbon sinks only: high biodiversity does not have to be proven. However, grasslands, which have been shown to sink nearly as much carbon as forests85 are protected only if they are high in biodiversity: “species richness” must be proven (Art. 17 (3) (c) (ii) RED). In many cases, the conditions for multiple areas will be fulfilled. Primary forests are continuously forested areas. Savannahs may also classify as continuously forested areas. Forested areas may be wetlands (mangroves). Peatlands are wetlands, but may also be forested or grassland. Areas designated for nature conservation purposes can harbour all ecosystems. Even though the differentiation between categories is not always evident, ecosystems can nonetheless be classified in categories that they do fulfil.



4.8.2 Room for interpretation

While the exclusion of areas designated for conservation purposes appears relatively straightforward, the situation is not the same for excluded ecosystems. The definitions are broad, leaving a wide margin for interpretation. In particular, no statements are made on how to take the particular local conditions into account. Some notions, such as peatland, are not defined by RED at all, for others, such as grassland and primary forests, only recitals provide further guidance. However, notions like “highly biodiverse grassland” require an implementing regulation by the Commission, which has not yet been issued. Overall, the criteria are too general to enable uniform application.

85

White, A., Cannell, M. G. R., and Friend, A. D., “Climate change impacts on ecosystems and the terrestrial carbon sink: a new assessment,” Global Environ. Change 9 Supplement 1(1999) S21-S30: S26; Caquet, B. et al., “Soil carbon balance in a tropical grassland: estimation of soil respiration and its partitioning using a semi-empirical model,” Agr. Forest Meteorol. 158–159(2012) 71-79.

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4.8.3 Limitations of the ecosystem approach

The no-go areas have been criticised for falling short of the level of protection awarded by general nature protection and environmental law in Europe as well as environmental strategy provisions.86 The focus on specific ecosystems and protection zones in Art. 17 (3) to (5) RED do not provide a comprehensive regulatory framework for the protection of biodiverse areas or areas with high carbon stocks. The sustainability criteria are a negative list, excluding certain ecosystems from cultivation. Instead, a positive list could have been drafted, limiting the cultivation of biomass for energy to degraded land. Several issues are not addressed:



4.8.3.1 Biodiversity and carbon stock beyond specified ecosystems

The sustainability criteria do not address biodiversity and carbon storage beyond the described ecosystems. In particular, biodiversity is omnipresent: localised species and unique ecosystems may occur beyond a specified ecosystem. However, biodiversity outside protection zones, primary forests and highly biodiverse grasslands is not considered. Even though these areas may be particularly high in biodiversity, other ecosystems and species richness outside these ecosystems are not protected under the sustainability criteria. The focus on protection zones or specific ecosystems is not aligned with the requirements of modern concepts of resource protection.87 The sustainability criteria do not contain management plans for the improvement of the biodiversity value of the ecosystem in question. Moreover, no rules are introduced on buffer zones or corridors enabling the interlinking of habitats.88 Nonetheless, the approach appears to be pragmatic, covering at least areas with particularly high biodiversity or carbon storage capacity. Compared to requiring individual impact assessments, the exclusion of specific ecosystems appears to be easier to administer for economic operators, albeit less comprehensive in achieving biodiversity protection. In pursuing an ecosystem approach, 86

Lee, Y. H., Bückmann, W., and Haber, W., “Bio-Kraftstoff, Nachhaltigkeit, Boden- und Naturschutz,” NuR 30, no. 12 (2008) 821-831: 831.

87

Langhammer, P. F. et al. “Identification and gap analysis of key biodiversity areas: targets for comprehensive protected area systems.” Gland: IUCN, 2007. IUCN also concludes that the establishment of protection zones is not sufficient for biodiversity protection, similarly: Tabarelli, M. et al., “Challenges and opportunities for biodiversity conservation in the Brazilian atlantic forest,” Conserv. Biol. 19, no. 3 (2005) 695-700. In favour of a change in agricultural management practices rather than a land sparing approach also Tscharntke, T. et al., “Global food security, biodiversity conservation and the future of agricultural intensification,” Biol. Conserv. 151, no. 1 (2012) 53-59.

88

Notably, the transnational certification systems referred to for compliance control do contain such provisions. See for example RSB, Principles & criteria for sustainable biofuel production, RSB-STD-01-001 [2010], principle 11.

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the RED seeks to make a compromise between the pursued goals and practicality in achieving them, factoring in administrative burdens.



4.8.3.2 No limitation on arable land area

However, neither a positive or negative list would provide a cap for the total land dedicated to growing biomass for energy. Where additional agricultural areas are needed, biodiverse and highly biodiverse areas come under threat as potential arable land. Thus, indirect land use changes (iLUC, where a previous – under the RED unregulated – agricultural use moves to highly biodiverse areas to make space for biomass for bioenergy) cannot be addressed. Accordingly, iLUC is a major threat to biodiverse ecosystems. Despite this, iLUC is considered within RED as an issue only in relation to the GHG emission balance (Art. 19 (6) RED, see above, section 3.2.2.1.1.2). Instead of drawing up (negative or positive) lists, quotas could be established, calculating the maximum sustainable production, export or area use. Admittedly, the calculation method and its constant review and update would be crucial in this case. Nonetheless, other countries have already put schemes in place based on quantitative restrictions: the United States Renewable Fuel Standard 2 (RFS2) under the US Energy Independence and Security Act (EISA) 2007 has already introduced a system limiting the area use. It emphasises the prevention of all land conversions and thus has the potential to encompass indirect land use changes. Crops only count towards the RFS2 if the land in question was used for agriculture prior to the EISA. No natural forest – not only primary forest – can be converted for bioenergy production.89



4.8.3.3 Quantitative requirements

Apart from the canopy cover of continuously forested areas and other wooded land, the sustainability criteria focus on qualitative requirements to define ecosystems. However, in order to sustain biodiversity, quantitative requirements are also important. Species may require a certain size of habitat for territory, a certain size of population is required to sustain genetic diversity, translating into spatial requirements. Moreover, in order to influence the quality of air and water, the availability of ground water, climate regulation, sequestration of carbon, nutrient cycling and other ecosystem services, those ecosystems need to have a certain size, depending on local circumstances. Nonetheless, these quantitative requirements are only addressed indirectly by the sustainability criteria, in that they will play a role in assessing the biodiversity status of grassland or ecological processes in primary forests. Moreover, 89

While for US produce, satellite monitoring gives a clear view of the land use at the time of passing EISA, operators from third countries bear a considerable administrative burden in proving compliance with the requirements. This has prompted Brazil to consider proceedings at the WTO Dispute Settlement Mechanism.

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Art. 18 (3) RED contains a reporting requirement on ecosystem services and degraded land for economic operators, voluntary schemes can be considered to contain accurate data, and bi- and multilateral agreements and voluntary schemes addressing sustainability criteria shall give due consideration to these issues (Art. 18 (4) subpara.1, 2 RED). The collected data may at least be used for the improvement of the current sustainability criteria.



4.8.4 Unresolved issues

In addition to the limitations of the ecosystem approach, the focus on ecosystems and areas designated for nature protection purposes does not reflect related environmental and socio-economic issues of land use that are strongly linked to biomass for energy.



4.8.4.1 Agricultural standards

For raw materials from the European Union, the minimum standards of good agricultural practice under the cross compliance in the Common Agricultural Policy90 must be observed (Art. 17 (6) RED). However, these only apply to raw materials produced within the European Union. The impacts of agriculture are not addressed where the feedstock for biofuels and bioliquids has been produced in third countries, beyond their impact on the GHG emission balance through N2O emissions (see above, section 3.2.1.1; 3.2.2.2). Accordingly, the impacts of increasing bioenergy production both on agricultural practices on cultivated land and on surrounding natural or near natural ecosystems is not addressed for imported biomass. Even though biomass for energy can be used to enhance soils,91 uncontrolled cultivation poses great risks including the increasing cultivation of monocultures, with attendant negative effects on soil fertility, erosion and carbon storage capacity. Moreover, crops for bioenergy may require the use of chemicals to 90

Council, Regulation (EC) n. 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) n. 1290/2005, (EC) n. 247/2006, (EC) n. 378/2007 and repealing Regulation n. 1782/2003, OJ [2009] L 30/16. Art. 17 (6) RED asserts that the provisions referred to under the heading “Environment” in part A and in point 9 of Annex II to Council Regulation (EC) n. 73/2009 have to be complied with (Council, Regulation (EC) n. 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) n. 1290/2005, (EC) n. 247/2006, (EC) n. 378/2007 and repealing Regulation n. 1782/2003, OJ [2009] L 30/16.) This requires compliance with the main elements of the European environmental policy, such as the Directive on the Protection of Birds. Moreover, the minimum requirements for good agricultural and environmental condition defined in Art. 6 (1) of that Regulation have to be observed. Land has to be preserved in good agricultural and ecological condition.

91

Phalan, B., “The social and environmental impacts of biofuels in Asia: an overview,” Applied Energy 86 supplement 1(2009) S21-S29: 524.

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make up for vulnerability to disease as well as an increased use of chemicals such as fertilisers and pesticides.92 A particular concern is that the use of chemicals for the cultivation of bioenergy is not limited through the food safety regulations that govern the use of biomass for food and feed, and is therefore more likely to increase. More intensive cultivation of biomass for energy will also affect biodiversity beyond arable land, for example as irrigation requirements affect the availability of fresh water and cause salination,93 and the use of fertilisers negatively affects water quality.94 Accordingly, the cultivation of feedstocks for bioenergy can also negatively affect ecosystem services.95 No provisions are made within RED on agricultural practices such as crop rotation or the use of agro-chemicals such as fertilisers, pesticides, fungicides or herbicides, which also have an impact on soil and water quality. All these factors make clear that regulation of agricultural standards would have been desirable or even essential for biodiversity protection.96 This is especially true where domestic environmental standards are low or not enforced, as in the potential exporting countries of biomass, mainly developing and newly industrialised countries. An opportunity has been missed to reinforce environmental standards in the agricultural sector, at least for imports.



4.8.4.2 Socio-economic issues

Land use for bioenergy cultivation is intrinsically linked to a number of socio-economic issues. The use of land for energy crops comes into conflict with agriculture for food and feed supply, affecting food prices and food security more generally.97 A more 92

Hill, J., “Environmental costs and benefits of transportation biofuel production from food- and lignocellulose-based energy crops. A review,” Agronomy for Sustainable Development 27, no. 1 (2007) 1-12.

93

Phalan, B., “The social and environmental impacts of biofuels in Asia: an overview,” Applied Energy 86 supplement 1(2009) S21-S29: 524 with further references.

94

de Fraiture, C. and Berndes, G. “Biofuels and water.” In Biofuels: Environmental consequences and interactions with changing land use, edited by Howarth, R. W. and Bringezu, S., 139-153. Ithaca: Cornell University, 2009.

95

Gasparatos, A., Stromberg, P., and Takeuchi, K., “Biofuels, ecosystem services and human wellbeing: putting biofuels in the ecosystem services narrative,” Agric., Ecosyst. Environ. 142, no. 3–4 (2011) 111-128: 114 foll.

96

Interview with a member of the technical committee of a certification system (29/2/2012); Interview with a the representative of a member of a voluntary certification system (15/2/2013).

97

Eide, A. “The right to food and the impact of liquid biofuels (agrofuels).” Rome: FAO, 2008. However, the contribution of biofuels to rising food prices currently seems to be limited, see Rathmann, R., Szklo, A., and Schaeffer, R., “Land use competition for production of food and liquid biofuels: an analysis of the arguments in the current debate,” Renewable Energy 35, no. 1 (2010) 14-22; Mueller, S. A., Anderson, J. E., and Wallington, T. J., “Impact of biofuel production and other supply and demand factors on food price increases in 2008,” Biomass Bioenerg. 35, no. 5 (2011) 1623-1632.

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profitable production of bioenergy for export affects food security, especially in developing countries.98 Moreover, with the increasing pressure on land, land seizures – which displace a local (indigenous) population to the benefit of large investors – are a serious issue, in particular where the property status was unclear or based on customary rights. Small-scale growers are under severe pressure. Rising rents and land grabbing may also push displaced persons to cultivation in no-go areas.99 Finally, poor working conditions and labour standards, which were already criticised prior to the biofuel boom, are likely to be perpetuated.100 While the export of bioenergy and its feedstock provides an opportunity for economic development and welfare increases, this effect is strongly conditioned by policy choices.101 Art. 18 (3), (4) RED which addresses the compliance control mechanism mentions food security and other socio-economic issues of biofuels and bioliquids. However, these aspects have not been included in the substantial content of the sustainability criteria. Art. 17 (7) RED only contains Commission reporting requirements on Conventions of the International Labour Organisation and the impact of bioenergy on land use rights and food prices, foregoing the synergy effects necessary in order to reach the target of “sustainability”. No binding requirements have been introduced on working conditions (such as proper training and equipment) or human rights at the workplace (such as the avoidance of forced labour and child labour, freedom of association, fair pay, etc.). Equally, the rights of local communities are not reinforced by requirements on operations to prove property rights or additional safeguards securing indigenous customary rights. Accordingly, these issues, which are intrinsically linked to the production of bioenergy and are very important in some developing and newly industrialised countries have not been addressed. Another opportunity has been missed to provide stringent standards that could alleviate socioeconomic conflicts in resource states or provide an upward driver for national standards.

98

Nonhebel, S., “Global food supply and the impacts of increased use of biofuels,” Energy 37, no. 1 (2012) 115-121: 120.

99

German, L., Schoneveld, G. C., and Pacheco, P., “Local social and environmental impacts of biofuels: global comparative assessment and implications for governance,” Ecol. Soc. 16, no. 3 (2011) Art. 29: 4 foll.

100

O xfam UK. “Bio-fuelling poverty – Why the EU renewable-fuel target may be disastrous for poor people.” London, 2007, 4.

101

Ewing, M. and Msangi, S., “Biofuels production in developing countries: assessing tradeoffs in welfare and food security,” Environ. Sci. Policy 12, no. 4 (2009) 520-528: 526 foll.

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part iii

Compliance Control

chapter 5

recognition mechanism

Besides the stringency of the sustainability criteria, the mechanisms in place to ensure compliance with these requirements are crucial: they must establish a transparent and impartial evaluation process, balancing the complexity of the issues against the practicality of compliance control. According to Art. 18 RED, economic operators can demonstrate compliance with the sustainability criteria in three different ways, the first according to the implementation of the individual Member States, and the others on the auspices of the Commission: • By providing the competent national authority with data on compliance according to the requirements set up by a Member State in implementation of RED (Art. 18 (3) RED); • By referring to a voluntary scheme recognised by the Commission (Art. 18 (4) subpara. 2 RED); • In accordance with a bi- or multilateral agreement between the European Union and a third country, recognised by the Commission (Art. 18 (4) subpara. 1 RED).

Diagram 3: the recognition mechanism In all variants, compliance control shall be assured through independent auditing: the recognition of bi- or multilateral agreements and voluntary schemes according to Art. 18 (4) subpara. 1, 2 RED demands an adequate standard of reliability, transparency and independent auditing (Art. 18 (5) RED). According to Art. 18 (3) RED, Member States shall ensure that economic operators submit reliable information, requiring evidence that it is based on an adequate standard

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of independent auditing. The auditing shall verify that the systems used by the economic operator are accurate, reliable and protected against fraud. Accordingly, the compliance mechanism relies on private compliance control. Compliance control is undertaken by private entities, based on the results of independent audits, under the oversight of either the European Commission or the national competent authority. Accordingly, compliance control according to Art. 18 (3), (4) RED does involve a compliance control mechanism by a public authority, but a recognition mechanism, authorising other operators to assess compliance on their behalf. The compliance control is undertaken primarily by certification systems. In the following, the two-step processes of compliance control at European and national level will be investigated for compliance with the requirements of Art. 18 RED and on their suitability in ensuring compliance with the sustainability criteria. Chapter 5 considers the requirements for Commission recognition and the conditions for member states’ implementation. Chapters 6 to 8 focus on certification systems, in particular voluntary certification systems, which are the most prominent actor involved in assessing compliance.

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Recognition Mechanism

chapter 5

recognition mechanism

The Commission does not establish its own compliance control mechanism, but rather a recognition mechanism. It can either take decisions to consider voluntary certification schemes as equivalent, or conclude bi- and multilateral agreements to this effect and then take decisions as to their equivalence (Art. 18 (4) RED). To provide further guidance, the Commission has issued a Communication on voluntary schemes.1 It suggests that the recognition of bi- and multilateral agreements would follow similar rules as the recognition of voluntary schemes.2 Even though Communications are not binding, they demonstrate and render more transparent an administrative practice, thus shedding light on the decision-making process. However, the Commission withholds the right to update its procedure as experience is gained in application of the procedures.3



5.1 The Commission decision

Decisions on recognition can be issued both for voluntary standard schemes and for bi- and multilateral agreements (Art. 18 (4) subpara. 1, 2 RED).



5.1.1 Bi- and multilateral agreements with third countries

Bi- and multilateral agreements on biofuels and bioliquids are recognised in a two-step process. First, the agreement is negotiated by the European Union according to the provisions in the TFEU, and then the Commission makes a decision on its recognition as for voluntary schemes (Art. 18 (4) subpara. 1 RED). 4 As such, the institutional control over the conclusion of bi- and multilateral agreements on the sustainability criteria contains an additional step compared to the recognition of voluntary schemes. The negotiation of a bi- or multilateral agreement by the EU requires the conferral of an external competence on the matter. Unlike its Member States, the EU cannot choose its own areas of competence (principle of conferral, Art. 5 TEU). The EU is only competent to act where competences have been explicitly conferred by the Treaties.5 The external competences of the EU have been substantially reformed by the Treaty of Lisbon, and in particular, the EU has been conferred legal personality (Art. 47 TEU) and can thus be a contracting party to international agreements. 1

Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01.

2 3

Ibid., 2.6.

Ibid., 2.4.

4 5

Ibid., 2.6.

Art. 5 (2) TEU, ex. Art. 5 (2) TEC. See Craig, P. P., EU administrative law, 2nd ed. (Oxford: Oxford University Press, 2012), 368.

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Art. 2 TFEU now distinguishes between exclusive, shared and supporting competences of the EU, systematising the vertical distribution of competences between EU and Member States.6 The EU could in this case have an exclusive competence for the conclusion of bi- and multilateral agreements on biofuels and bioliquids imported into the internal market. International agreements on the trade in goods fall under the exclusive competence of the European Union under the Common Commercial Policy (Art. 3 (1) (e); 207 TFEU, ex. Art. 133 TEC). Accordingly, the EU has the sole competence for external trade relations, eliminating the Member State competence on external trade relations.7 However, the environmental and social components of the sustainability criteria suggest that a competence with a scope going beyond trade would have to be conferred. According to Art. 3 (2) TFEU, the EU is conferred an exclusive external competence where the conclusion of international agreements is provided for in a legislative act, where it is necessary for the exercise of internal competences, or where its conclusion may affect common rules. This partly mirrors the pre– Lisbon ECJ jurisprudence recognising an EC competence where it was necessary for the exercise of its internal competence beyond the explicit conferrals of competence, conferring implied rather than express power.8 Where an exclusive or shared competence was exercised by the EC, now EU, for example under Art. 95 TEC (now Art. 114 TFEU) to harmonise the internal market, the exclusive external competence of the EC in this area was implied.9 In the case of RED, the EC (as was) has enacted internal measures based on Art. 114 TFEU, bringing about implied external powers. However, reference can also be made to the external competence contained in Art. 18 (4) subpara. 1 RED, which stipulates the Community (now the EU) shall endeavour to conclude bilateral or multilateral agreements (see Art. 3 (2) TFEU). The external competence could therefore be drawn from Art. 207 TFEU, stipulating on the Common Commercial Policy, or the reference in Art. 18 (4) RED based on Art. 3 (2) TFEU. Importantly, the choice of competence affects the procedure for the conclusion of international agreements, as Art. 207 TFEU modifies the negotiation process foreseen under Art. 218 TFEU. The distinction between the different external competences follows the same reasoning as for 6

Craig, P. P. and De Búrca, G., EU law: text, cases, and materials, 5th ed. (Oxford: Oxford University Press, 2011), 78 foll.

7

Eeckhout, P., EU external relations law, 2nd ed. (Oxford: Oxford University Press, 2011), 3.

8

ECJ, 22/70 (Commission v. Council, AETR) [1971] ECR 263, cases 3, 4; ECJ, 6/76 (Kramer) [1976] ECR 1279; ECJ, Opinion 1/76 on the draft agreement establishing a laying-up fund for inland waterway vessels [1977] ECR ECJ 741.

9

ECJ, 22/70 (Commission v. Council, AETR) [1971] ECR 263; ECJ, Opinion 1/94 on the Competence of the Community to conclude international agreements concerning services and the protection of intellectual property – Article 228 (6) of the EC Treaty [1994] ECR I-5267, para. 77; ECJ, Opinion 1/03 (Competence of the Community to conclude the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2006] ECR I-1145, 114 to 115, 131.

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the determination of the legal basis of RED, determining the internal competence, distinguishing vertically between Member States and EU competences (see below, section 9.1). In common with the legal basis of RED (i.e. the internal competence of the EU), the external competence is determined according to the main object of the measure; as for Art. 114 TFEU, a measure can be based on Art. 207 TFEU if its conditions are fulfilled.10 Given that the sustainability criteria were based on Art. 114 TFEU, it is a logical consequence that bi- and multilateral agreements should be concluded under the Common Commercial Policy: Art. 114 TFEU addresses the free movement of goods within the internal market, Art. 207 TFEU the trade in goods with third countries. Accordingly, Art. 207 TFEU is the appropriate legal basis for the conclusion of bi- or multilateral agreements. International agreements are generally negotiated according to Art. 218 TFEU (ex Art. 300 TEC), which is modified by Art. 207 (3) to (5) TFEU for agreements under the Common Commercial Policy.11 According to Art. 207 (3) to (5), 218 TFEU, the Council authorises the Commission to conduct negotiations upon Commission recommendation. The Commission conducts negotiations in consultation with the Art. 207 TFEU-Committee. The Treaty of Lisbon introduced an information right for the European Parliament (Art. 207 (3) TFEU). The negotiated text is adopted if the consent of the European Parliament is obtained (Art. 207 (3), 218 (6) (a) n. v TFEU) and a qualified majority is reached in the Council (Art. 207 (4) TFEU). Once the bi- or multilateral agreement is concluded, the Commission is empowered to issue decisions declaring biofuels and bioliquids produced from feedstock from the third countries in question to be compliant (Art. 18 (4) sub para. 1 s. 2 RED). Thus, the negotiating institution and the institution evaluating the agreement are congruent, but subject to control by other EU institutions. To date, no bi- or multilateral agreements on sustainable biofuels and bioliquids have been concluded. Accordingly, the practical impact of the Commission recognition is currently limited the recognition of voluntary schemes.



5.1.2 Voluntary schemes

The Commission recognition of voluntary schemes is the result of a process of benchmarking voluntary schemes against the sustainability criteria and the requirements on compliance control under the RED. Compliance with the sustainability criteria is then assessed via assessment of compliance with the requirements of the voluntary scheme. Accordingly, RED operates 10

ECJ, C-281/01 (Commission v. Council; Energy Star) [2002] ECR I-12049, 37, 39, 41-43; ECJ, C-178/03 (Commission v. European Parliament and Council) [2006] ECR I-107, para. 42, 71; ECJ, C-411/06 (Commission v. European Parliament and Council) [2009] ECR I-7585, para. 45-50.

11

Eeckhout, P., EU external relations law, 2nd ed. (Oxford: Oxford University Press, 2011), 196.

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as a meta-standard, promoting the development of voluntary schemes that are compliant with the requirements of the sustainability criteria.12 Art. 18 (4) subpara. 2 RED only addresses voluntary schemes on biofuels. This is not consistent with recital 67 RED, stating that the biofuel regime also has to apply to bioliquids in order to avoid displacement effects. However, the Commission encourages Member States to accept voluntary schemes on biofuels recognised by the Commission equally for bioliquids.13 Moreover, a Commission proposal on amendments to RED proposes including the word bioliquids next to biofuels in Art. 18 (4) subpara. 2 RED.14 The Commission can decide on the equivalence of voluntary standard schemes. Certification schemes are the most common of these.15 Voluntary certification systems are based on principles and criteria that they establish in pursuance of their respective objectives. Operators are certified for their compliance with the principles and criteria by certification bodies based on auditing, and can then make claims to compliance of their products (see below, Ch. 6 to 8). Although certification schemes are the most common approach, the Commission is not limited to recognising only these; RED also covers non-typical schemes, such as maps showing that certain geographical areas are compliant or not, calculation tools for assessment of GHG savings or regional agricultural GHG values associated with a particular feedstock.16 On 19 July 2011, the European Commission recognised:17 • Bonsucro EU (formerly known as the Better Sugarcane Initiative);18 • Greenergy (Greenergy Brazilian Bioethanol verification programme);19 • ISCC (International Sustainability and Carbon Certification);20 12

Lin, J., “Governing biofuels: a principal-agent analysis of the European Union biofuels certification regime and the Clean Development Mechanism,” J. Environ. Law (2011): 13.

13

Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01, 2.5.

14

Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012].Art. 2 n. 6.

15

Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01, 2.1.

16 17

Ibid., 3.

On the Commission website, these certification schemes are listed according to the actors involved, first multi-stakeholder initiatives, then industry initiatives: http://ec.europa.eu/energy/renewables/biofuels/ sustainability_schemes_en.htm (20/05/2012).

18

Commission, Implementing Decision 2011/439/EU on the recognition of the ‘Bonsucro EU’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/81.

19

Commission, Implementing Decision 2011/441/EU on the recognition of the ‘Greenenergy Brazilian Bioethanol verification programme’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/85.

20

Commission, Implementing Decision 2011/438/EU on the recognition of the ‘International Sustainability and Carbon Certification’ scheme for demonstrating compliance with the sustainability criteria under Direc-

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• RBSA (Abengoa RED Bioenergy Sustainability Assurance);21 • RSB EU RED (Roundtable of Sustainable Biofuels EU RED);22 • RTRS EU RED (Round Table on Responsible Soy EU RED);23 • 2BSvs (Biomass Biofuels voluntary scheme).24 These and other schemes will be discussed in more details in chapters 6 to 8. All of these standards were either developed explicitly to demonstrate compliance with the RED sustainability criteria or have been amended to comply. Notably, no standards have been recognised as far as the exclusion of grassland is concerned, as the Commission has not yet issued its decision on the definition of biodiverse grasslands. No other certification schemes, and no non-typical schemes have been recognised so far.25 However, as of February 2012, 25 applications have been submitted, suggesting that 18 procedures are pending.26

tives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/79. 21

Commission, Implementing Decision 2011/436/EU on the recognition of the ‘Abengoa RED Bioenergy Sustainability Assurance’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/75.

22

Commission, Implementing Decision 2011/435/EU on the recognition of the ‘Roundtable of Sustainable Biofuels EU RED’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/73.

23

Commission, Implementing Decision 2011/440/EU on the recognition of the ‘Round Table on Responsible Soi EU RED’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/83.

24

Commission, Implementing Decision 2011/437/EU on the recognition of the ‘Biomass Biofuels Sustainability voluntary scheme’ for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/77.

25

Since the time of writing the Commission further certification schemes: Commission, Implementing Decision 2010/210/EU on the recognition of the ‘Ensus voluntary scheme under RED for Ensus bioethanol production’ for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 98/70/EC, OJ [2012] L 110/42. Commission, Implementing Decision 2012/395/EU on recognition of the ‘Red Tractor Farm Assurance Combinable Crops & Sugar Beet Scheme’ for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC, OJ [2012] L 187/62; Commission, Implementing Decision 2012/427/EU on recognition of the ‘Scottish Quality Farm Assured Combinable Crops Limited’ scheme for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC [2012] L 198/17; Commission, Implementing Decision 2012/432/EU Ion recognition of the ‘REDcert’ scheme for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC, OJ [2012] L 199/24; Commission, Implementing Decision 2012/452/EU on recognition of the ‘NTA 8080’ scheme for demonstrating compliance with the sustainability criteria under Directives 98/70/ EC and 2009/28/EC, OJ [2012] L 205/17; Commission, Implementing decision 2012/722/EU on recognition of the Roundtable on Sustainable Palm Oil RED scheme for demonstrating compliance with thte sustainability criteria under Directives 98/70/EC and 2009/28/EC, OJ [2012] L 326/53.

26

Commission, Certification schemes for biofuels, Memo/11/522 [2011].

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5.1.3 Requirements for recognition

Art. 18 (4) RED and the advisory Commission Communication on voluntary certification schemes detail requirements for Commission recognitions. According to Art. 18 (4) subpara. 1, 2 RED, several substantial provisions are made on the environmental standards required for bi- and multilateral agreements as well as voluntary national or international schemes. Moreover, Art. 18 (5) RED sets out institutional and procedural requirements for the voluntary schemes charged with compliance control.



5.1.3.1 Substantive standards

Voluntary schemes’ and bi- and multilateral agreements’ sustainability requirements must contain certain elements, while other requirements may be included. The Commission assessment shall be based on the capacity to comply with the sustainability criteria, irrespective of public or private origin, or the existence of equivalent standard for a specific feedstock or area.27 This confirms the intent of the Commission to decide indiscriminately. The sustainability criteria must be observed, in particular the area exclusions and GHG emission reduction targets including the methodology in calculating the GHG balance (Art. 17 (2) to (5) RED), but not the agricultural standards for biomass from the EU (Art. 17 (6) RED). However, compliance with all elements or identical sustainability criteria are not required: Bi- or multilateral agreements with third countries shall “contain provisions relating to matters covered by Art. 17 (2) to (5) RED” in order to be recognised (Art. 18 (4) subpara. 1 RED). Voluntary schemes can be considered to comply either with both the area exclusions and GHG emission reduction requirements (Art. 18 (4) subpara. 2 RED), or only with the requirements on the GHG emission balance (Art. 18 (4) subpara. 3 RED). Besides the sustainability criteria, several other elements can be taken into account. The recognition decision can be extended to measures taken for the conservation of areas that provide for soil, water and air protection, indirect land-use changes, the restoration of degraded land, the avoidance of excessive water consumption in areas where water is scarce and socio-economic issues (Art. 17 (7) RED). For bi- and multilateral agreements, “due consideration” shall be given to these issues during the negotiation process (Art. 18 (4) subpara. 1 s.  3 RED), while voluntary schemes can be judged to contain accurate data on the matter (Art. 18 (4) subpara. 2 s. 2 RED). Under Art. 18 (1) RED, Member States are to oblige operators to use a mass balance approach, whereas Art. 18 (4) RED does not require a mass balance system for either voluntary certification schemes or for bi- and multilateral agreements. The Commission Communication on voluntary certification 27

Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01, 2.1.

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schemes suggests that a mass balance system should also be used to prove the chain of custody in voluntary schemes.28



5.1.3.2 Compliance control

In order to be recognised, bi- and multilateral agreements and voluntary schemes must meet “adequate standards of reliability, transparency and independent auditing”, i.e. rely on an independently organised compliance control mechanism (Art. 18 (5) s. 1 RED). Accordingly, first- or second-party certification by the operators themselves or dependent auditors are not permissible. While Art. 18 (4) RED does not introduce further requirements on compliance control under bi- and multilateral agreements, the Commission Communication suggests that part of its provisions for independent auditing could be retained.29 For voluntary schemes, the Commission Communication differentiates between typical schemes such as certification systems, and non-typical schemes. For non-typical schemes such as maps and databases, the Commission takes a pragmatic approach, planning to develop the appropriate assessment procedure when a request for recognition is entered30 which has not yet been the case. For “typical” voluntary schemes, the Commission Communication provides further guidance on auditing and the mass balance system, reflecting the requirements on the implementation by Member States under Art. 18 (1), (3) RED.31 Voluntary schemes require an auditable evidence system and acceptance of responsibility for auditing, and data archival for five years.32 Auditing is required to take place before the economic operator may participate in the scheme. Group auditing is permitted, in particular for small operators and cooperatives. Moreover, the voluntary scheme should arrange for regular – at least annual – retrospective auditing by an independent external auditor with the appropriate auditing capabilities, in particular relating to the sustainability criteria.33 Auditors can show compliance with these requirements if they follow the International Standardisation Organisation’s (ISO) standard ISO 19011 establishing guidelines for quality and/ or environmental management systems auditing or partial compliance through other international standards.34 The requirements of the Commission Decision mainly reiterate the conditions set out in ISO 19011, in that audits have to be properly planned, conducted and reported, including: • the identification of the economic operator’s activities; 28

Ibid., 2.2.3.

29 30 31

Ibid., 2.6.

Ibid., 2.3.

Ibid., 2.2.

32 33

Ibid., 2.2.1.

Ibid., 2.2.2.

34

Ibid., Table 2.

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• the organisation of the operator concerning the sustainability criteria including its control systems; • the establishment of a “limited assurance level” regarding the operators activities and an analysis of risks of material misstatements; • a verification plan based on the risk assessment; • the verification through sampling including further information requests.



5.1.4 The decision-making process

Like for its decisions on the status of areas designated for the protection of threatened or endangered species or ecosystems as no-go areas (see above, section 4.1.2), the Commission shall take the decision on the recognition of individual voluntary schemes according to the advisory procedure (Art. 18 (6), 25 (3) RED), taking into account the expert opinion of the Committee on the Sustainability of Biofuels and Bioliquids (Art. 25 (2) RED). With the revocation of the Comitology Decision after the reform of tertiary regulation through the Treaty of Lisbon (Art. 290, 291 TFEU), the advisory procedure is now regulated in Art. 4, 10 Regulation 182/2011. The Committee has decided that, considering the intense discussion on the certification systems that have been recognised, a written procedure shall be used in the future.35 Once the Commission has reached a decision, called an implementing act under the terminology of Lisbon (Art. 291 TFEU), this is published on the transparency platform (Art. 24 RED). It is valid up to five years (Art. 18 (6) RED). Public participation is not included in the decision-making process. Only judicial review of the Commission decision can be sought, through an action for annulment (Art. 263 TFEU, ex Art. 230 TEC). Some non-governmental organisations (NGOs) have criticised the recognition process for certification schemes as having a lack of transparency, and brought an action for annulment to the European General Court (EGC) for infringement of the right to public access of information. However, the case was dismissed in November 2012 as manifestly inadmissible as it was brought out of time.36 Accordingly, no decision was made on the merits of the question.



5.1.5 The scope of the decision

The recognition of bi- and multilateral agreements depends on whether the agreement demonstrates that the biofuel or bioliquid produced from raw materials cultivated in a third country complies with the sustainability criteria (Art. 18 (4) subpara. 1 RED). When recognising voluntary schemes, 35

Committee on the Sustainability of Biofuels and Bioliquids, Summary report of the meeting held in Brussels on 27 May 2011 [2011], 3. Notably, the documents on the Comitology register for the Committee on the sustainability of biofuels and bioliquids has not been updated since the second meeting on 27 May 2011. http://ec.europa.eu/transparency/regcomitology/index.cfm (23/05/2012).

36

EGC, T-278/11 (ClientEarth et al. v. Commission) [2012] not yet reported, 47.

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different criteria apply for different aspects: for the no-go areas (Art. 17 (3) to (5) RED) and/or information on ecosystem services around soil, water and air (Art. 17 (7) RED), the decision is made as to whether the schemes in question “contain accurate data”, whereas for GHG emission targets (Art. 17 (2) RED) and the exclusion of carbon sinks (Art. 17 (4) RED), the assessment is of whether schemes are “compliant” (Art. 18 (4) subpara. 2 RED). It is unclear why the terminology differs. The formulation “contains accurate data” masks the fact that once the European Commission has issued such a decision, the scheme in question is recognised and thus considered compliant. Notably, voluntary schemes can be recognised for individual elements of the sustainability criteria. In this case, compliance with all sustainability criteria would be demonstrated by referring to a combination of different schemes. The recognition decision has direct effect.37 The content of the notion of direct effect is not entirely resolved. ECJ case law would allow a broad or a narrow definition:38 direct effect in a broad or objective sense refers to the capacity of an EU norm to be invoked in a national court,39 whereas a narrow or subjective definition refers to its capacity to confer rights to individuals. 40 Others distinguish between direct effect and direct applicability, describing the same concepts. 41 However, these notions are interlinked in such a way that a distinction is often not made. 42 Moreover, the direct effect of Commission decisions is also implied in Art. 18 (7) RED, according to which Member States shall not require further evidence of compliance if the Commission has issued a decision on a voluntary standard scheme or bi- or multilateral agreement, thus factually establishing an equivalence with national implementations. 37

ECJ, 9/70 (Grad) [1970] ECR 825, 838. Notably, the fact that the former Art. 249 TEC, now Art. 288 (4) TFEU does not refer to the direct applicability of decisions does not prevent the provision from having direct effect. ECJ, 249/85 (Albako) [1987] ECR 2345, para. 15. Nonetheless, the German ordinances reiterate the equivalence of decisions on the equivalence of international agreements (not voluntary certification schemes, s. 41 sentence 1 n. 2 BioSt-NachV and Biokraft-NachV.

38

In ECJ, 26/62 (Van Gend en Loos) [1963] ECR 13. referred to a norm as having “direct effect and [emphasis added] creating individual rights” In ECJ, 2/74 (Reyners) [1974] ECR 631, para 24 to 30. and ECJ, 43/75 (Defrenne) [1976] ECR 455. direct effect was construed as conferring individual rights. See Craig, P. P. and De Búrca, G., EU law: text, cases, and materials, 5th ed. (Oxford: Oxford University Press, 2011), 181 foll. with further references.

39

See ECJ, 26/62 (Van Gend en Loos) [1963] ECR 13.

40 41

See ECJ, 57/65 (Lütticke) [1966] ECR 205.

Marsden, S., “Invoking direct application and effect of international treaties by the European Court of Justice: implications for international environmental law in the European Union,” Int’l & Comp. L.Q. 60, no. 3 (2011) 737-757; Winter, J. A., “Direct applicability and direct effect: two distinct and different concepts in Community Law,” Common Market Law Review 9, no. 4 (1972) 425-438.

42

See for example Fairhurst, J., Law of the European Union, 9th ed. (Harlow: Pearson, 2012), 268 foll; Horspool, M. and Humphreys, M., European Union Law, 7th ed. (Oxford: Oxford University Press, 2012), 161 foll.

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The Commission decision is based on the substantive standard, i.e. no-go areas and GHG balance, and the independence of auditing. Notably, the decision only extends to the recognition at the time of application, without subsequent controls. The Commission decision only covers voluntary standard schemes, including certification systems, but does not assess the certification body or its auditors, which have a crucial role in compliance control. Moreover, the mechanisms available to certification systems to control certification bodies, or sanctioning of certified but non-compliant operators are not addressed. The Commission decision only considers the rules on independence of auditors established under the certification system, setting a framework for the contractual relationship between the certification system and the certification body and the requirements of the certification system for auditing. In the Committee meeting, the German delegation proposed explicitly declaring the monitoring of the certification systems a task of the Committee. However, this was not deemed necessary as both Art. 18 (4) RED and the Commission Decision make clear that certification systems shall be accurate and reliable. 43 The Commission (and the Committee) thus appear unwilling to assess the effectiveness of the recognised voluntary scheme. This approach appears short sighted, as the quality of the standard does not necessarily relate to the actual compliance (see below, Ch. 8). Certification bodies operating under certification systems and assessing compliance with these certification systems through auditing are not recognised themselves, nor are provisions made on the nature of the institutions and the procedures of these certification bodies and their auditors. No detailed provisions are made on the participation of stakeholders or instruments to ensure independence and transparency of the auditing process. Accordingly, essential elements of the compliance control process remain unregulated. However, Art. 18 (8) RED provides that, upon request of a Member State or by its own initiative, the Commission to examine the application of the sustainability criteria by a specific source. This provision covers all situations where doubts are shed on the compliance with the sustainability criteria, both before and after recognition.



5.1.6 Analysis

The recognition of voluntary schemes and bi- and multilateral agreements has a benchmarking function to assess the schemes’ and agreements’ requirements for compliance with the sustainability criteria. Where a certification system has been recognised, certificates on the conformity of economic operators issued under the certification system can be used to demonstrate compliance with the sustainability criteria. Thereby, the certification decision taken under the voluntary certification system is applicable in the Member States, without the necessity of implementing measures in 43

Committee on the Sustainability of Biofuels and Bioliquids, Summary report of the meeting held in Brussels on 27 May 2011 [2011], 2.

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Member States. Certification decisions issued under recognised voluntary certification schemes confer to economic operators the right to claim compliance with the sustainability criteria. Thereby, the effects of certification decisions taken under recognised certification systems seem to be awarded direct applicability and direct effect, which is normally only available for some EU legislative acts, notably the recognition decision. 44 The system of recognition by the Commission, only detailed in a nonbinding Communication, focuses on certification schemes, leaving the details of the recognition of bi- and multilateral agreements and non-typical voluntary schemes to be determined. As is the case for elements of the substantive standards (for example the definition of biodiverse grasslands), the mechanism is thus not entirely operationable. Moreover, even for certification systems, the recognition does not address the entire compliance control mechanism, but only the certification systems themselves. The recognition decision only covers the substantial criteria as far as the scope of the sustainability criteria, and only covers the certification systems’ compliance control mechanisms in that they must require auditing. It does not address the governance structure, institutions or procedures of the certification systems or the certification bodies and auditors referred to for assessing compliance with the requirements of the certification system: the way the voluntary scheme actually functions is not addressed. The accreditation of certification bodies, crucial for the independence of the auditing, 45 is not addressed in Art. 18 (4) RED. There are no monitoring requirements once the recognition has been granted, and this recognition is valid for five years. Therefore, the Commission recognition only covers some aspects of the compliance control mechanism established by voluntary schemes. Moreover, the Commission decision-making process, despite being under observation as required by the advisory Comitology procedure, could be criticised for its limited level of transparency; especially in comparison with the requirements on public participation under the certification schemes themselves.



5.2 Member States’ implementation

According to Art. 18 (1), (3) RED, the implementation by the Member States shall introduce a system requiring economic operators to show 44

See for example Art. 288 TFEU. See Craig, P. P. and De Búrca, G., EU law: text, cases, and materials, 5th ed. (Oxford: Oxford University Press, 2011), 181 with further references. See also Marsden, S., “Invoking direct application and effect of international treaties by the European Court of Justice: implications for international environmental law in the European Union,” Int’l & Comp. L.Q. 60, no. 3 (2011) 737-757; Winter, J. A., “Direct applicability and direct effect: two distinct and different concepts in Community Law,” Common Market Law Review 9, no. 4 (1972) 425-438.

45

Deaton, B. J., “A theoretical framework for examining the role of third-party certifiers,” Food Control 15, no. 8 (2004) 615-619: 618.

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compliance with the sustainability criteria in order to benefit from quotas or consumption incentives, and for biofuels and bioliquids to count towards the national target (Art. 17 (1) RED). Art. 18 (1) and (3) RED provide a basic outline of the compliance control mechanism. Compliance control is to be organised through an independent auditing mechanism, under which information is provided to the Member State, thus leaving considerable leeway for Member States’ implementations. However, the requirements that Member States may impose on the private entity ensuring compliance differ from the conditions set for Commission recognitions according to Art. 18 (5) RED. When adopting recognition decisions, the Commission requires that schemes meet an “adequate standard of reliability, transparency and independent auditing.” The provisions for the Member States’ implementations are a lot more detailed: based on further guidance by the Commission on the extent of the information to be required (Art. 18 (3) subpara. 3 RED), Member States shall provide a framework that ensures that economic operators provide reliable information on compliance. Member States shall regulate for economic operators to “arrange for an adequate standard of independent auditing” which shall “verify that the systems used by the economic operators are accurate, reliable and protected against fraud. It shall evaluate the frequency and methodology of sampling and the robustness of data” (Art. 18 (3) subpara. 1 RED). Thereby, while the design of the compliance control mechanism is mainly left to the Member States, the basic principles are established in Art. 18 (3) RED. Most significantly, Member States cannot chose the instrument of compliance control, but must rely on economic operators submitting audited information on compliance, rather than command and control instruments or any other instrument of a Member State’s choice. Thus, a fundamental choice of the instruments employed for implementation is predetermined. At first glance, this prescription on the mode of implementation of RED appears to contradict the general rule that European law is executed autonomously by the Member States (indirect execution, see Art. 291 (1) TFEU). 46 However, the national execution is not absolute: Art. 4 (3) subpara. 2 TEU stipulates that Member States shall take any appropriate measure to ensure the fulfilment of the obligations resulting from European legislative acts according to Art. 288 TFEU. Art. 197 (1) TFEU stipulates that in the interest of an effective implementation of EU law, it shall be regarded a matter of common interest. Accordingly, the rule of autonomous national execution is modified by EU law requirements, subject to the principle of subsidiarity (Art. 5 (3) TEU). 47 Considering the complex supply and production chains across Member States and third countries, a minimal framework 46

See von Danwitz, T., Europäisches Verwaltungsrecht (Berlin, Heidelberg: Springer, 2008), 302 foll; Szczekalla, P. “Handlungsformen im europäischen Verwaltungsrecht.” Chap. 5 In Verwaltungsrecht der Europäischen Union, edited by Terhechte, J. P., 171-199. Baden Baden: Nomos, 2011, 61.

47

Ruffert, M. “Art. 291 AEUV.” In EUV/AEUV, edited by Calliess, C. and Ruffert, M. Munich: Beck, 2011, 5.

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for the implementation of compliance control across Member States could not be established effectively by individual Member States but only at EU level. 48 Moreover, the requirement on Member States to require economic operators to provide information that has been validated through auditing still leaves leeway to the Member States as to how this information requirement is fulfilled. Notably, Art. 18 (3) RED does not require Member States to refer to voluntary certification schemes as foreseen for Commission recognition under Art. 18 (4) subpara. 2 RED. Apart from the broad instrumental choice, the design of the compliance control mechanisms is left to the Member States. Accordingly, each Member State has devised its own implementation of the requirements on compliance control in Art. 18 (3) RED, and the compliance with the sustainability criteria and independent auditing are not only assessed under the Commission recognition mechanism, but additionally by the mechanisms of the 27 Member States, totalling 28.



5.3 The meta-standard approach

The compliance control mechanism is construed as metastandards. RED does not establish its own certification or compliance control mechanisms, but operates as a recognition mechanism. The referral to certification schemes in RED link state law to norms that are “extra-legal” or informal (from the state’s perspective). 49 The meta-standard even goes beyond simply referring to a voluntary standard, and assesses its equivalence to the state law standard through a recognition decision. Meta-standards refer to existing or specially drafted standards so that compliance is achieved through compliance with the latter. Existing standards that are benchmarked to the requirements of the meta-standard can then be used to demonstrate compliance, in this case with the sustainability criteria.50 Although the majority of these certification systems are organised by private parties based on voluntary participation, they now play a crucial role in compliance control of state law.



5.3.1 Practical advantages

The referral to certification schemes and auditing can be advantageous for economic operators, public administration and for the certification 48

On the conditions for the principle of subsidiarity, see Calliess, C. “Art. 5 TEU.” In EUV/AEUV, edited by Calliess, C. and Ruffert, M., 4th. Munich: Beck, 2011, 20 foll; Hofmann, H., Rowe, G. C., and Türk, A., Administrative law and policy of the European Union (Oxford: Oxford University Press, 2011), 125 foll.

49

Schanze, E. “Linking extra-legal codes to law: the role of international standards and other off-the-rack regimes.” Chap. 15 In Law, economics and evolutionary theory, edited by Zumbansen, P. and Calliess, G.-P., 335-352. Cheltenham: Edward Elgar, 2011, 335.

50

Endres, J. M., “Clearing the air: the meta-standard approach to ensuring biofuels environmental and social sustainability,” Va. Envtl. L.J. 28, no. 1 (2010) 73-120: 74.

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schemes themselves. For economic operators, certification may facilitate market access, while the referral to third parties may provide efficiency gains to public administration. Voluntary schemes rely on the preferences of consumers, but do not create a market for sustainable products.51 Accordingly, limited demand for the certified product is a major issue for voluntary schemes, limiting market penetration.52 The appropriation of private standards within legislation, to enable access to new markets or other incentives, gives new weight to certification systems developed by stakeholders or technical experts,53 thus driving market penetration. In fact, certification systems have welcomed the referral in RED to voluntary schemes as it encourages more operators to gain certification.54 In addition, voluntary schemes may benefit from state regulation as they can benchmark themselves against the framework set by the Directive and the national implementation. Thus, the formal (state) law can drive the informal (transnational) law.55 The certification process can make use of expertise and capacity of private parties that exceed the capacities of the legislator or administrative authorities. In particular where certification systems exist prior to public regulation, the use of a meta-standard has the potential to reduce cost and effort, as public authorities or economic operators do not have to develop their own indicators and verifiers or compliance control system, thus outsourcing bureaucratic costs.56 Although a large number of certification schemes were developed explicitly for compliance with RED, and thus needed effort to benchmark, the level of capacity at the public authority is still lower than it would otherwise be. Moreover, third party certification is also held to increase efficiency for economic operators, improving market access, profitability and management practices.57 In particular, the recognition of existing certification schemes makes sense where economic operators are already certified, avoiding expensive and time 51

Lemos, M. C. and Agrawal, A., “Environmental governance,” Annual Review of Environment and Resources 31, no. 1 (2006) 297-325: 305, 308 with further references.

52

Laurance, W., F. et al., “Improving the performance of the Roundtable on Sustainable Palm Oil for nature conservation,” Conserv. Biol. 24, no. 2 (2010) 337-381: 378.

53

Lin, J., “Governing biofuels: a principal-agent analysis of the European Union biofuels certification regime and the Clean Development Mechanism,” J. Environ. Law (2011): 27.

54

Interview with the manager of environmental affairs at the secretariat of a certification system (1/11/2011).

55

Winter, G. “Transnational administrative comitology: the global harmonisation of chemicals classification and labelling.” Chap. 4 In Transnational administrative rule-making: performance, legal effects and legitimation, edited by Dilling, O., Herberg, M., and Winter, G., 112-150. Oxford: Hart Publishing, 2011, 143.

56

Lin, J., “Governing biofuels: a principal-agent analysis of the European Union biofuels certification regime and the Clean Development Mechanism,” J. Environ. Law (2011): 15 foll.

57

Tanner, B., “Independent assessment by third-party certification bodies,” Food Control 11, no. 5 (2000) 415-417: 415.

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consuming multiple certifications.58 However, the efficiency gains are paid for by an information asymmetry between the public authority and the certification system and bodies, which may render oversight of the control mechanism more difficult. However, this is only a disbenefit where control by public authorities would otherwise be effective, which is doubtful in the potential exporting countries (see above, section 1.2.4). In those countries, third party certification can reduce the information asymmetry between (exporting) producers and (European) consumers.59 In order to assess compliance of imports with the sustainability criteria, the recurrence to voluntary certification schemes is an important tool. There is no alternative approach to compliance control that would be effective in third countries where remote sensing is not of sufficient quality to assess compliance remotely (see above, section 4.7), and where European authorities could only act with the permission of the exporting state. Even though auditors are not necessarily able to operate entirely freely in the exporting country,60 economic activity by private entities does not have the same stigma as one country operating or seeking to operate in another country’s territory – especially where the activity takes place in a former colonial state. Thus, private regulation can more easily operate across states, targeting companies within the state rather than the state itself.61 In developing and newly industrialised countries, certification systems can compensate for low environmental regulation or enforcement deficit,62 provided that consumers demand higher standards than would otherwise prevail in the exporting country in question. Thus, the recurrence to private standards may compensate for the limits of national law, and thus improve the level of environmental protection. However, the recurrence to private standards can also hinder the development of local standards in developing and newly industrialised countries as it reduces the incentive for these countries to develop their own environmental legislation. Accordingly, the privatisation of environmental protection can lead to a policy freeze.63 58

Lin, J., “Governing biofuels: a principal-agent analysis of the European Union biofuels certification regime and the Clean Development Mechanism,” J. Environ. Law (2011): 13.

59

Deaton, B. J., “A theoretical framework for examining the role of third-party certifiers,” Food Control 15, no. 8 (2004) 615-619: 617 with further references.

60 61

They may require licences, for example.

Bernstein, S. and Cashore, B., “Can non-state global governance be legitimate? An analytical framework,” Regulation & Governance 1, no. 4 (2007) 347-371: 352.

62

This is particularly the case where voluntary standards make reference to compliance with national law or go beyond requirements in state law, see for example Principle 1RSB, Principles & criteria for sustainable biofuel production, RSB-STD-01-001 [2010].

63

Gupta, J. “Developing countries: trapped in the web of sustainable development governance.” Chap. 11 In Transnational administrative rule-making – Performance, legal effects and legitimacy, edited by Dilling, O., Herberg, M., and Winter, G., 305-330. Oxford and Portland, Oregon: Hart Publishing, 2011, 317, 322.

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5.3.2 Legitimacy

The practicality of the referral to voluntary standards is not, however, the only relevant criterion for the referral to certification schemes. Where power is exerted, i.e. the ability to compel a certain behaviour,64 the question of how this power can be domesticated arises. This is discussed as the concept of legitimacy. As a normative concept, legitimacy can be defined as the acceptability of decision making in the public sphere,65 and is distinct from the questions of effectiveness and constructive output.66 In the case of the referral of Art. 18 RED to certification schemes, the exertion of authority is the legislative act. The situation could be different for voluntary schemes, relying on the co-operation and coordination of different economic operators. Participating operators consent to the standards they wish to abide by. Accordingly, there is no power relationship where all operators involved consent to the instruments in place.67 In this context, however, such consent may not have been given entirely freely: private standards affect not only members, but also have a strong influence on access to the market beyond those operators involved in standard setting.68 Thereby, the issue of legitimacy cannot be solved by recurring to consent alone.



5.3.2.1 Self-legitimation of certification systems

For transnational networks, such as the certification systems, creating informal law beyond the formal decision-making process in national and international law,69 no central lawmaker exists which draws its authority from a democratic process. Accordingly, other forms of legitimacy have to be sought. As the ideal of a rational discourse70 cannot be achieved in reality, 64 65

Weber, M., Wirtschaft und Gesellschaft (Tübingen: Mohr Siebeck, 1972), 28.

Bernstein, S., “Legitimacy in global environmental governance,” Journal of International Law and International Relations 1, no. 1-2 (2005) 139-166: 142.

66

Winter, G. “Transnational administrative comitology: the global harmonisation of chemicals classification and labelling.” Chap. 4 In Transnational administrative rule-making: performance, legal effects and legitimation, edited by Dilling, O., Herberg, M., and Winter, G., 112-150. Oxford: Hart Publishing, 2011, 139.

67

Lepsius, O. “Standardsetzung und Legitimation.” In Internationales Verwaltungsrecht, edited by Möllers, C., Vosskuhle, A., and Walter, C., 345-374. Tübingen: Mohr Siebeck, 2007, 356.

68

Fuchs, D. and Vogelmann, J. “The power of TNCs in transnational environmental private governance.” Chap. 5 In Transnational private governance and its limits, edited by Graz, J.-C. and Nölke, A., 71-83. Oxford, New York: Routledge, 2007.

69

Zumbansen, P. “Neither ‘public’ nor ‘private’, ‘national’ nor ‘international’: transnational corporate governance from a legal pluralist perspective.” Bremen: SfB597 Staatlichkeit im Wandel – Transformations of the State, 2010, 14 foll.; see also Scott, C., “”Transnational Law” as proto-concept: three conceptions,” German Law Journal 10, no. 7 (2007) 859-876.

70

Habermas, J., Faktizität und Geltung – Beiträge zur Diskurstheorie des Rechts und des demokratischen Rechtsstaats (Frankfurt: Suhrkamp, 1992), 135 foll.

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where diverging interests and power positions within the issue at hand and with crosscutting issues cannot be avoided,71 several approaches at least allow an approximation, seeking the best available outcome. The most common is to refer to input and output legitimacy. Output legitimacy can be defined as the quality of problem solving, input legitimacy is the procedure of participation of stakeholders.72 Output legitimacy can be considered to contain the definition of the problem, the incorporation of all aspects, the address of conflicting aims and the determination of a level of protection.73 Output legitimacy can be established through scientific and technical expertise: expert knowledge creates an objective foundation for drafting standards. However, it must be borne in mind that scientific expertise is not immune to political pressures (so-called ‘science policy’) or stakeholder interests.74 Scientific arguments can be instrumentalised through science policy, policy arguments can be used for bargaining, tactical behaviour and demonstrations of power obstructing the solution-finding process. Thus, the recurrence to scientific experts is not sufficient to ensure output legitimacy. In addition, scientific expertise alone is not sufficient to develop a standard addressing all the issues brought forward by stakeholders: a holistic solution to the issues surrounding a product cannot be found without addressing economic, environmental and socio-economic impacts.75 Accordingly, output legitimacy itself may be difficult to measure, as it is the result of technical and scientific arguments balanced against other interests and the resulting complex mix of differing positions. Consequently, output legitimacy is to some degree generated by defining procedures, reducing complexity and rationalising decisions, thus helping to 71

Winter, G. “Transnational administrative comitology: the global harmonisation of chemicals classification and labelling.” Chap. 4 In Transnational administrative rule-making: performance, legal effects and legitimation, edited by Dilling, O., Herberg, M., and Winter, G., 112-150. Oxford: Hart Publishing, 2011, 121.

72

Scharpf, F., Governing in Europe: effective and democratic (Oxford: Oxford University Press, 1999), 16-20; Scharpf, F., Demokratietheorie zwischen Utopie und Anpassung (Konstanz: Konstanzer Universitätsverlag, 1970); Mayntz, R., Legitimacy and compliance in transnational governance (Cologne: Max-Planck-Institute for the Study of Societies, 2010), 10 foll.

73

Winter, G. “Transnational administrative comitology: the global harmonisation of chemicals classification and labelling.” Chap. 4 In Transnational administrative rule-making: performance, legal effects and legitimation, edited by Dilling, O., Herberg, M., and Winter, G., 112-150. Oxford: Hart Publishing, 2011, 122.

74

Walker, V. R., “The myth of science as a “neutral arbiter” for triggering precautions,” B.C. Int’l & Comp. L. Rev. 26, no. 2 (2003) 197-228; Kellow, A., Science and public policy – The virtuous corruption of virtual environmental science (Cheltenham, UK; Northhampton, MA, USA: Edward Elgar, 2007).

75

Winter, G. “Transnational administrative comitology: the global harmonisation of chemicals classification and labelling.” Chap. 4 In Transnational administrative rule-making: performance, legal effects and legitimation, edited by Dilling, O., Herberg, M., and Winter, G., 112-150. Oxford: Hart Publishing, 2011, 137.

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make them acceptable.76 Accordingly, output legitimacy is assessed using input legitimacy as a proxy.77 In the standard–setting process, procedural rules drawn from national administrative law principles could be used to create input legitimacy. This includes for example rules against bias of decision makers, the right of affected persons to be heard, and the duty of decision-makers to give reason.78 However, transnational law relies on consent of stakeholders, which can provide a more diffuse authority in an environment with competing and opposing positions,79 rather than opposing citizens to an administrative authority. Accordingly, these rules cannot be directly taken over into a transnational situation. Alternatively, the principles of deliberation could be drawn on. Deliberation has close ties with the ideas of a rational discourse, based on the idea that in a discussion, the better argument shall prevail over the most powerful position.80 However, it is also limited as it is based on consensus, which may affect the outcome of the debate, as the ultimate goal shifts from reaching a solution to finding an acceptable compromise.81 In order to ensure a debate driven by reason, safeguards have to be introduced.82 (These procedural requirements can be seen as a tool for ensuring input legitimacy, but have also been classified as a new or distinct category of legitimacy.)83 76

Lange, B. “Procedures and legitimacy of public networks.” In Transnational administrative lawmaking, edited by Dilling, O., Herberg, M., and Winter, G., 41-76. Oxford and Portland, Oregon: Hart Publishing, 2011, 42.

77

Koppell, J. G. S., “Global governance organisations: legitimacy and authority in conflict,” Journal of Public Administration Research and Theory 18, no. 2 (2008) 177-203: 184. suggesting the concepts of cognitive and pragmatic legitimacy next to normative legitimacy. See also Cashore, B., “Legitimacy and the Privatization of Environmental Governance: How Non–State Market–Driven (NSMD) Governance Systems Gain Rule–Making Authority,” Governance 15, no. 4 (2002) 503-529..

78

Stewart, R. B., “U.S. administrative law: a model for global administrative law?,” Law and Contemporary Problems 68, no. 3/4 (2005) 63-108.

79

Harlow, C., “Global Administrative Law: The Quest for Principles and Values,” European Journal of International Law 17, no. 1 (2006) 187-214.

80

Hurd, I., “Legitimacy and Authority in International Politics,” Int. Organ. 53, no. 02 (1999) 379-408: 387. Cohen, J. “Deliberative Democracy and Democratic Legitimacy.” In The good polity – normative analysis of the state, edited by Hamlin, A. and Pattit, P., 17-34. Oxford: Blackwell, 1989.

81

van de Kerkhof, M., “Making a difference: on the constraints of consensus building and the relevance of deliberation in stakeholder dialogues,” Pol. Sci. 39, no. 3 (2006) 279-299: 282.

82

See also Esty, D. C., “Good governance at the supranational scale: globalizing administrative law,” The Yale Law Journal 115, no. 7 (2006) 1490-1562.

83

Beisheim, M. and Dingwerth, K. “Procedural legitimacy and private transnational governance.” Berlin: SFB700 Governance in Räumen begrenzter Staatlichkeit – Governance in areas of limited statehood, 2008; Richardson, A. and Eberlein, B., “Legitimating Transnational Standard-Setting: The Case of the International Accounting Standards Board,” J Bus Ethics 98, no. 2 (2011) 217-245: 223. the latter referring to throughput, deliberative or procedural legitimacy.

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The participation in standards-setting bodies of all stakeholders has to be ensured,84 and definite measures must be taken to prevent the domination of some interests over others.85 At issue are, for example, economic disparities and the resulting scientific and diplomatic capacities.86 In practice, countries with established industrial infrastructures may be given more weight than developing countries.87 Certain issues will inevitably be pushed by actors with vested economic interests, and where these stakeholders are able to establish and exploit a strong position, the discussion will be significantly distorted. Accordingly, rules on membership and the mandates and compositions of rulemaking committees have to be drafted, allowing all interests to be represented. Moreover, clear distinctions have to be made between voting and observing members.88 Beyond the organisation of the standard–setting bodies, the debate itself has to be structured to limit power struggles and bargaining: This includes the availability of information to all stakeholders, the separation of scientific and policy debates, procedural rules on the transparency of different positions and allowing all interests to be heard, as well as providing recourse for interests that did not prevail, and procedures for the evaluation and reform of set standards.89 Some form of accountability to stakeholders has to be introduced, through transparency and responsiveness of the transnational system.90 Information and participation rights to the public can also be provided, allowing for comments at strategic and other stages.91 However, a balance has to be drafted as limited 84

Beisheim, M. and Dingwerth, K. “Procedural legitimacy and private transnational governance.” Berlin: SFB700 Governance in Räumen begrenzter Staatlichkeit – Governance in areas of limited statehood, 2008, 13.

85

Benvenisti, E., “Exit and Voice in the Age of Globalization,” Mich. L. Rev. 98, no. 1 (1999) 167-213.

86

Gupta, J. “Developing countries: trapped in the web of sustainable development governance.” Chap. 11 In Transnational administrative rule-making – Performance, legal effects and legitimacy, edited by Dilling, O., Herberg, M., and Winter, G., 305-330. Oxford and Portland, Oregon: Hart Publishing, 2011, 307, 319 foll.

87

Buckinx, B., “Global networks and global administrative law: ethical concerns – Paper presented at the annual meeting of the International Studies Association, San Diego, California,” (2006), 1.

88

Winter, G. “Transnational administrative comitology: the global harmonisation of chemicals classification and labelling.” Chap. 4 In Transnational administrative rule-making: performance, legal effects and legitimation, edited by Dilling, O., Herberg, M., and Winter, G., 112-150. Oxford: Hart Publishing, 2011, 141 foll.

89

Ibid., 134 foll.

90

Beisheim, M. and Dingwerth, K. “Procedural legitimacy and private transnational governance.” Berlin: SFB700 Governance in Räumen begrenzter Staatlichkeit – Governance in areas of limited statehood, 2008, 15. On accountability, see also Keohane, R. “Global governance and democratic accountability.” In Taming globalisation – frontiers of governance, edited by Held, D. and Koenig-Archibugi, M., 130-159. Cambridge: Wiley, 2003, 139.

91

Winter, G. “Transnational administrative comitology: the global harmonisation of chemicals classification and labelling.” Chap. 4 In Transnational administrative rule-making: performance, legal effects and

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transparency has been found to consequently limit bargaining and public pressure on the outcome.92 No benchmark has been established for what level of input or output legitimacy has to be reached in order to achieve acceptability and thus legitimacy in a normative sense. Notably, RED does not address the governance structure of certification systems and thus does not establish a suitable benchmark. However, some meta-standards have been developed which can be seen as indication for good governance, such as the codes of good practice for standardisation by the International Social and Environmental Accreditation and Labelling Alliance (ISEAL),93 ISO Guide 59:2004 or in Annex 3 of the Agreement on Technical Barriers to Trade (TBT-Agreement). However, the potential of transnational systems to set their own fundamental values (“constitutions”) is not yet fully investigated.94



5.3.2.2 Legitimacy of certification systems through referral

Legitimacy could also be generated through state regulation. If how the rules fit into the context of surrounding rules and regulations can be considered as one source of legitimacy,95 then benchmarking confirms that certification systems operate within this framework. The referral of RED to transnational law provides a new potential source of legitimacy. A state-based frame for transnational regulation could contribute to ensuring a certain level of input and output legitimacy, and thereby increase the overall legitimacy of the transnational power.96 In fact, where the self-regulative power of the transnational system is not sufficient to achieve a “rational” output (theoretically, one formed without bargaining and exertion of power), the benchmarking against a public law standard as through the recognition process can improve output legitimacy. However, considering that the level of the standards in the sustainability criteria and the requirements on governance of certification systems is in practice higher than required under RED, it is questionable whether additional legitimacy is gained by the referral in this case. legitimation, edited by Dilling, O., Herberg, M., and Winter, G., 112-150. Oxford: Hart Publishing, 2011, 123. 92

Checkel, J. T., “Why Comply? Social Learning and European Identity Change,” Int. Organ. 55, no. 03 (2001) 553-588.

93

ISEAL Alliance, Code of good practice – Setting social and environmental standards v5.0 [2010].

94

Winter, G., “Transnationale Regulierung: Gestalt, Effekte und Rechtsstaatlichkeit,” Aus Politik und Zeitgeschichte, no. 8 (2009) 9-15: 15.

95

See Bernstein, S. and Cashore, B., “Can non-state global governance be legitimate? An analytical framework,” Regulation & Governance 1, no. 4 (2007) 347-371: 351 foll.

96

Winter, G. “Transnational administrative comitology: the global harmonisation of chemicals classification and labelling.” Chap. 4 In Transnational administrative rule-making: performance, legal effects and legitimation, edited by Dilling, O., Herberg, M., and Winter, G., 112-150. Oxford: Hart Publishing, 2011, 113.

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Inversely, the referral affects the legitimacy of the state legislation, as the chain of democratic legitimacy is extended by one more link. This may however be compensated to some degree by the self-legitimacy of the voluntary certification systems. Some indication of the level of legitimacy required can in this case be drawn from higher-ranking law binding the national legislator, notably the constitution – or in the case of the EU, its primary law: the TEU and the TFEU. However, care has to be taken as not to overburden the diffuse and complex informal decision-making process in transnational regulation.97



5.3.3 Analysis

On a practical level, several advantages can be brought forward for the referral to transnational standards in state regulation. Resources can be saved and external expertise can be drawn upon. For economic operators, transnational rules provide a vehicle enabling market access. However, the referral to transnational law is not without problems: it is necessary to consider the impact of a referral by state regulation (where legitimacy is usually mediated through a democratic process) to transnational systems. The exercise of power by transnational systems raises issues of legitimacy. At a minimum, the concept of legitimacy will be broadened from that of a chain of democratic legitimacy to a more polycentric legitimacy, taking into account the interactions between formal and informal regulation. Some constructs exist to support the self-legitimacy of certification systems, notably input and output legitimacy. However, no provisions exist on the levels of input and output legitimacy that need to be reached in order for transnational rules to be acceptable, and thus legitimate in a normative sense. State regulation could provide a framework where the self-governing power of transnational systems fails, increasing input and output legitimacy through normative prescriptions. Transnational entities currently address a number of elements from which they can draw self-legitimacy, establishing their own procedures and administrative law.98 In the following, the provisions of certification systems will be addressed, considering the level of self-legitimacy they provide. The actors and institutions involved as well as the standard setting process will be assessed as to their inclusion of stakeholders, procedures insuring deliberative decision making as well as technical and scientific expertise, participation and transparency.

97

Winter, G., “Transnationale Regulierung: Gestalt, Effekte und Rechtsstaatlichkeit,” Aus Politik und Zeitgeschichte, no. 8 (2009) 9-15: 15.

98

Schmidt-Aßmann, E., “The internationalisation of administrative relationships as a challenge for administrative law scholarship,” German Law Journal 9, no. 11 (2008) 2061-2079.

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chapter 6

Introduction to Certification Systems Touching on Biomass

chapter 6

introduction to certification systems touching on biomass

There is a great variety of standards addressing issues surrounding biomass and bioenergy in particular, leading to a broad fragmentation of the field. The number of voluntary standards alone is very high – 67 counted in 2009.1 Considering the recent increase in public interest in the field, different initiatives are in different stages of their development, and many schemes have been developed recently and have only started work in the last few years.2 The sector is evolving fast: the RSB is already expecting further amendments to the 2011 version of its standard, for example.3 Accordingly, the following analysis can only show a snapshot of the situation.



6.1 Actors

Different actors developed standards, from public law initiatives to technical organisations to company schemes to multi-stakeholder initiatives. Several states have developed or are in the process of developing national standard schemes for biofuels or biomass, such as the USAs Renewable Fuel Standard, 4 the Indonesian Sustainable Palm Oil Standard (ISPO),5 or at an international level, the Global Bioenergy Partnership (GBEP), seeking to draft standards for legislators.6 Art. 18 (4) subpara. 2 RED explicitly refers to voluntary schemes – national or international. Public standards can only be considered through, bi- and multilateral agreements, provided they foresee independent auditing (Art. 18 (4) subpara. 1, (5) RED). However, the focus lies on voluntary schemes. Sustainability standards are also developed by technical organisations, in particular the International Standardisation Organisation (ISO) with its ISO 13065 sustainability criteria for bioenergy 7 and the European Committee for Standardisation (CEN) Standard EN 16214.8 These standards have not yet been finalised. 1

van Dam, J., Junginger, M., and Faaij, A. P. C., “From the global efforts on certification of bioenergy towards an integrated approach based on sustainable land use planning,” Renewable and Sustainable Energy Reviews 14, no. 9 (2010) 2445-2472: 2445.

2

For example, the RSPO has been applied since 2008. The RTRS was established in 2006, version 1.0 of their principles and criteria were published in 2010. Version 2.0 of the RSB principles and criteria came into operation in 2011.

3

RSB, Principles & criteria for sustainable biofuel production, RSB-STD-01-001 [2010], 3, 5.

4 5

Energy Policy Act (EPAct) of 2005 Energy Independence and Security Act (EISA) of 2007.

Peraturan Menteri Pertanian (Permentan) 19/2011 tentang pedoman Perkebunan Kelapa Sawit Berkelanjutan Indonesia (Ministry of Agriculture Regulation 19/2011 on guidelines for Sustainable Palm Oil Indonesia).

6 7

http://www.globalbioenergy.org/ (13/2/2012).

http://www.iso.org/iso/home.html (13/2/2012).

8

CEN, prEN 16214-1 Sustainably produced biomass for energy applications – Principles, criteria, indicators and verifiers for biofeuels and bioliquids – Part 1: Terminology [2010]; CEN, prEN 16214-2 Sustainably procuded

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Companies and trade associations have been involved in the development of sustainability schemes. These include business to business standards, for example those from Laborelec SGS (Laborelec certification system)9 and Essent (the Green Gold Label – GGL).10 The requirement on independent auditing in Art. 18 (5) RED excludes business-to-business standards such as Laborelec and GGL from recognition. Other company schemes relying on third party certification potentially qualify, such as 2BSvs standard established by French agricultural producers and the biomass industry,11 the Abengoa RSBA standard developed by a Spanish biofuel producer12 and the Greenergy standard, established by producers of petroleum and biofuels,13 which have all been recognised by the Commission. Non-Governmental Organisations (NGOs), independent associations such as the Nordic Ecolabel14 or the CO2Star Campaign15 and roundtable initiatives all attempt to bring economic operators from the relevant sector together. Multistakeholder initiatives include the Roundtable on Sustainable Biofuels (RSB),16 the Roundtable on Sustainable Soy (RTRS)17 and Bonsucro.18



6.2 Geographical application

The scopes of these standards differ depending on their primary objective, i.e. whether they are agriculture–, environment– or energy– focussed. Many certification systems apply globally, such as GlobalGAP19 or the RSB. Some are explicitly limited in their geographical scope of application such as the Nordic Ecolabel which covers only Scandinavia,20 Greenergy, which focuses biomass for energy applications – Principles, criteria, indicators and verifiers for biofuels and bioliquids – Part 2: Conformity assessment including chain of custody and mass balance [2010]; CEN, prEN 16214-3 Sustainably produced biomass for energy applications – Principles, criteria, indicators and verifiers for biofuels and bioliquids – Part 3: Biodiversity and environmental aspects [2010]; CEN, prEN 16214-4 Sustainably produced biomass for energy applications – Principles, criteria, indicators and verifiers for biofuels and bioliquids – Part 4: Calculation methods of the greenhouse gas emission balance using a life cycle analysis [2011]. 9

http://www.laborelec.be/ENG/biomass-verification-procedure/ (13/2/2012).

10 11

http://www.greengoldcertified.org/ (13/2/2012).

http://en.2bsvs.org/2bsvs/the-2bsvs-consortium.html (13/2/2012).

12 13

http://www.abengoabioenergy.com/web/en/rbsa (13/2/2012).

http://www.greenergy.com/Company/index.html (13/2/2012).

14 15

http://www.nordic-ecolabel.org/ (13/2/2012).

http://www.co2star.eu/ (13/2/2012).

16 17

http://rsb.org/ (13/2/2012).

http://www.responsiblesoy.org/ (13/2/2012).

18

http://www.bonsucro.com/ (13/2/2012).

19

http://www.globalgap.org/uk_en/ (13/2/2012).

20

http://www.nordic-ecolabel.org/about/ 13/2/2012).

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on sugarcane from Brazil,21 and the sustainability criteria of RED, applying to domestic and imported produce within the EU (Art. 17 (1) RED). Others are limited to the geographic area of cultivation of the feedstock covered, such as Bonsucro, which applies to sugarcane, or the Roundtable on Sustainable Palm Oil (RSPO), which is confined to climate zones where oil palms can prosper.22



6.3 The object of the standard

The types of produce considered by the different initiatives are very diverse. The RSB, Greenergy and 2BSvs standards are end-use specific, covering only energy uses. The RSB global standards and certification systems apply to biofuels (which they define as fuels produced from biomass as opposed to fossil fuels),23 and Greenergy applies only to bioethanol.24 2BSvs applies to biofuels and bioliquids as defined in Art. 2 RED.25 The ISCC standard currently applies only to biofuels and bioliquids as defined in RED,26 but is working on standards for solid bioenergy and looking to expand into general biomass standards (ISCC PLUS).27 The Forest Stewardship Council (FSC)28 standard addresses solid biomass (forests),29 RSPO, RTRS and the Bonsucro are feedstock specific, applying to soy30 and sugar cane31 respectively. Notably, the scope of application also includes solid biomass which can be used to produce biofuels and bioliquids of the 21

Greenergy Brazilian Bioethanol verification programme, System description, SYS DOC 001 v.3 [2010], p. 1. Greenergy was originally established to comply with the reporting requirements for the UK Renewable Transport Fuel Obligation. S. 124 foll. United Kingdom, Energy Act [2004]; Renewable Transport Fuel Obligations Order 2007, SI 2007 n. 2072 [2007]. See Chalmers, J. and Archer, G., “Development of a sustainability reporting scheme for biofuels: A UK case study,” Energy Policy 39, no. 10 (2011) 56825689; Upham, P., Tomei, J., and Dendler, L., “Governance and legitimacy aspects of the UK biofuel carbon and sustainability reporting system,” Energy Policy 39, no. 5 (2011) 2669-2678.

22

See http://faostat.fao.org/site/567/default.aspx#ancor (13/2/2012) for geographical distribution of the production of different crops.

23

RSB, Glossary of terms [2011], 8.

24 25

Greenergy Brazilian Bioethanol verification programme, System description, SYS DOC 001 v.3 [2010], 1.

2BSvs voluntary scheme, Scheme description, 2BSvs-DES-01 [2011], para 2.1.

26

ISCC, System basics for the certification of sustainable biomass and bioenergy, ISCC 201 [2011], 5. ISCC, Systemgrundlagen für die Zertifizierung von nachhaltiger Biomasse und Bioenergie, ISCC 202 [2011], 5. Insofar, the title of these documents referring to bioenergy is misleading.

27

http://www.iscc-system.org/iscc-system/iscc-plus/ (13/2/2012).

28

https://ic.fsc.org/index.htm (13/2/2012).

29 30

FSC, Principles and criteria for forest stewardship, FSC-STD-01-001 (version 4-0) EN [1996], 3.

RTRS, Accreditiation and certification standard for responsible soy production, RTRS_A&C_STD_001_ V3-2_ENG [2011], 3.

31

Bonsucro, Bonsucro production standard including Bonsucro EU production standard [2011], 2.

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second generation (see Art. 21 (2) RED), thus, certification schemes like the FSC can seek recognition. The Sustainable Agriculture Network (SAN),32 whose standards are the basis for Rainforest Alliance certification33 and GlobalGAP look at the agricultural sector without consideration of the end use. Accordingly, GlobalGAP certification covers crops, aquaculture, livestock, plant propagation material and feed manufacturing.34 The International Federation of Organic Agriculture Movements (IFOAM), a worldwide umbrella organisation with its own meta-standard focuses on organic production as a certain form of agriculture.35 The following table gives a short overview of the certification systems addressed in this chapter, highlighting those which will be addressed in more detail later-on in the chapter 7 and 8, highlighting the schemes currently recognised by the Commission:

32 33

Geographical scope

Biomass feedstock

End use

Abengoa Bioenergy Sustainability Assurance (RBSA)

Commercial enterprise (Spain)

Global

All ethanol feedstocks

Bioenergy

Biomass Biofuels Sustainability Voluntary Scheme (2BSvs)

Industry consortium (France)

Global

Any

Biofuels

BioSt-NachV and Biokraft-NachV

Germany

Germany

Any

Biofuels and bioliquids

Bonsucro (formerly Better Sugarcane Initiative, BSI)

Multi-stakeholder

Global

Sugarcane

Any

CO2Star

NGO

Europe

Any; also fossil fuels

Transport fuels

EN 16214

European Committee for Standardisation

Global/ EU

Any

Biofuels and bioliquids

EU RED

European Union

European Union

Any

Biofuels and bioliquids according to Art. 2 RED

http://sanstandards.org/sitio/ (13/2/2012).

http://www.rainforest-alliance.org/agriculture/standards (30/2/2012).

34 35

Initiator/Members

http://www.globalgap.org/uk_en/what-we-do/globalg.a.p./ (13/2/2012).

http://www.ifoam.org/ (13/2/2012).

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Fair-Trade Labelling Organisations International (FLO)

Multi-stakeholder initiative

Global

Any

Any

Forest Stewardship Council (FSC)

Multi-stakeholder Initiative

Global

Wood

Any

Global Bioenergy Partnership (GBEP)

States and international organisations

Global

Any

Bioenergy

GlobalGAP

Multi-stakeholder initiative

Global

Agricultural products

Any

Green Gold Label (GCL)

Essent

Global

Biomass

Energy, power production, chemical purposes

Greenenergy

Commercial enterprise

Brazil (developed for UK market)

Sugarcane

Biofuel (transport)

Indonesian Sustainable Palm Oil Standard (ISPO)

Indonesia

Indonesia

Palm oil

Any

International Federation of Organic Agriculture Movements (IFOAM)

NGOs

Global

Organic agricultural products

Any

International Sustainability and Carbon Certification (ISCC)

Multi-Stakeholder

Global

Any

Biofuels and bioliquids (other uses under consideration)

ISO 13065

International Standardisation Organisation

Global

Any

Bioenergy

Laborelec SGS

Business initiative (Belgium)

Global

Solid biomass (wood chips and pellets)

Electricity

Nordic Ecolabel (SWAN)

Nordic Council of Ministers/NGO

Scandinavia

Solid biomass

Biofuel (i.e. energy) pellets

Renewable Fuel Standard

USA

USA

Any

Biofuels

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Renewable Fuel Transport Obligation (RTFO)

United Kingdom

United Kingdom

Any

Biofuel (i.e. transport fuel)

Round Table for Responsible Soy (RTRS)

Multi-stakeholder

Global (outside EU)

Soybean

Any

Round Table on Sustainable Palm Oil (RSPO)

Multi-Stakeholder

Global

Palm oil

Any

Roundtable on Sustainable Biofuels (RSB)

Multi-stakeholder

Global

Any

Biofuels (i.e. bioenergy)

Sustainable Agriculture Network (SAN)/Rainforest Alliance

Non-profit/NGOs

Global

Agricultural products

Any

Table 1: certification systems The following will assess in more detail the schemes that, according to their overall structure, could gain recognition by the Commission. These include: some of the schemes already recognised by the Commission, in particular the company initiatives Abengoa RSBA, 2BSvs and Greenergy, and the multi-stakeholder initiatives ISCC, Bonsucro and RSB; the agricultural, NGO-led SAN; the multi-stakeholder forestry scheme FSC; and the technical organisation ISO. The focus of the discussion is the capacity of the schemes to generate self-legitimacy, in particular input and output legitimacy, as discussed in section 5.3.2.



6.4 Governance structure of certification schemes

In the following, the governance structures of selected certification systems will be investigated in more detail as to the level of self-legitimacy generated through input and output legitimacy by reference to the schemes’ procedures. Starting from the variety of actors involved in certification initiatives described above, the distribution of membership, their voting powers and the institutional structures will be addressed.



6.4.1 The distribution of membership

The distribution of membership differs strongly between the different schemes. The technical organisations CEN and ISO do not aim at including all interests and therefore can only draw legitimacy from technical and scientific

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expertise as well as procedures. Company initiatives such as 2BSvs, Greenergy and Abengoa RSPA focus on industrial membership, even though even the representation of industrial interests differs. Multi-stakeholder initiatives include, by design, representatives from a range of backgrounds and with a range of concerns. However, multi-stakeholder initiatives do not necessarily have equal membership of different stakeholder groups. Bonsucro’s members mainly consist of the industry, ISCC has an industrial focus with a strong European membership base, the RSPO, while representing all sectors is to a great extent made up of industry representatives. Active efforts to broaden the interests represented, or to reach equitable membership of the different stakeholders are rarely visible, but there are some examples. The RSB seeks to counterbalance the industry bias by organising different interest groups in chambers, which are also defines the voting rights. The promotion of national and regional versions or interpretations of the certification schemes allows for the adaptation to specific circumstances,36 some schemes have reduced membership fees for non-industry members,37 which should ease membership. Beyond this, ISO provides training and technical assistance through a special committee (DEVCO) with a view to increasing their participation.38



6.4.2 Types of membership and observers

Beyond company schemes, some initiatives differentiate between different types of membership, where members can relinquish voting rights in exchange for lower fees.39 For example, the RSPO differentiates between ordinary members and affiliate members. Both can participate in the meetings of the RSPO general assembly and thematic working groups, but only ordinary members have voting rights. 40 Notably, the environmental and social NGOs present at the RSPO are all ordinary members. The RSB does not differentiate between different kinds of membership, but excludes those members assembled in chamber 7 (Intergovernmental organizations, governments, standard-setters, specialist advisory agencies, certification agencies, and consultant experts) from voting in the RSB steering board, the RSB body involved in the development of standards. ISO differentiates between three types of member36

See for example ISCC, Statutes, ISCC Draft 11-03-01 V 1.14 [2011], § 9. RSPO, National interpretation of RSPO principles and criteria for sustainable palm oil production – Republic of Indonesia [2011].

37

ISCC, Fees and tariff structure [2013]. See also the similar provisions in RSB, Terms of reference, RSBDOC-01-001 [2011], 3.

38

ISO. “Developing talent – Cataloge of ISO’s technical assistance and training programmes for ISO members.” Geneva: ISO, 2012. http://www.iso.org/iso/home/about/iso-and-developing-countries/devco. htm (30/2/2012).

39

For example, RSPO ordinary members membership fees are currently 2000€/year, those of affiliate members 250€/year.

40

RSPO, Statutes and by-laws [2005], ch. II.

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ship: the development of and voting on standards is reserved to full members (currently 112), correspondent members (currently 45) may observe technical and policy meetings of full members, while subscriber members (currently 4) are only informed on ISO’s work. Unlike full and correspondent members, they cannot sell or adopt ISO standards. Notably, while all industrialised countries are full members, developing and newly developed countries are found in all three categories, with many smaller countries have joined as correspondent or subscriber members. 41



6.4.3 Institutions

The institutional infrastructures of the different schemes discussed here vary considerably, but some common elements can be identified. 42 Schemes usually have a plenary organ, a management committee and a technical committee. Most schemes also have a secretariat. Overall, the level of disclosure of information is lower in company schemes and among multi-stakeholder initiatives, so that a definitive evaluation of the differences in practice cannot be made.



6.4.3.1 Plenary organ

Most initiatives have a plenary organ consisting of the members, usually convening annually. For obvious reasons, no plenary organ exists for the company schemes 2BSvs and Abengoa RBSA: Abengoa RBSA is operated by a single company, and in 2BSvs, the members convene in the steering board, i.e. the management committee. The scope of the decision-making authority of the general assembly differs considerably in the different initiatives. It is typically charged with electing the management board, deciding changes in the statutes of the initiative, on membership dues and budget, and receives the reports of the management board as well as the auditor (this audit is not the audit of economic operators, but rather the financial audit of the initiative itself). Importantly, it is not always charged with the approval of the standards, i.e. the principles and criteria and certification systems. Few initiatives specify or disclose the procedures under which the general assembly operates, such as the role of the chair of the committee, the order and length of speaking time for different members, the procedure for the drafting of 41

ISO, Membership manual [2012].

42

See ISO, Statutes [2012]; ISCC, Statutes, ISCC Draft 11-03-01 V 1.14 [2011]; RSPO, Statutes and by-laws [2005]; FSC, By-laws, Document 1.1 [1994, last revised 2009]; Bonsucro, Terms of reference of the standard revision process [2011]; GBEP, Terms of Reference [2009]; RSB, Terms of reference, RSB-DOC-01-001 [2011]; RSPO, Terms of reference for the greenhouse gas working group 2 [2010]; 2BSvs voluntary scheme, Governance and management, 2BSvs-PRO-01 [2011].

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the agenda. Some information is however available on the voting mechanism, if not on the discussion of issues. In the majority of the schemes, including multi-stakeholder initiatives, each (full) member has one vote, potentially creating an industry bias. However, others such as the RSB or FSC have organised members in chambers, insuring the equal representation of stakeholder groups rather than individuals. Not all plenary organs represent individual members or groups equally. For example, the RSB general assembly is made up of delegates from each chamber, facilitating consensus. 43 Decisions are usually made according to the consensus procedure. Consensus is to be distinguished from unanimity, and can be described as absence of objections. 44 While consensus ensures the acceptability of the standard, it also bears the risk of agreement on the lowest common denominator. Some schemes such as the FSC or ISCC allow for majority votes, but usually only where a consensus cannot be reached. Very few schemes introduce a minimum quorum for the members that have to participate in a meeting.



6.4.3.2 The management board

All initiatives have management boards charged with the management of the scheme, which goes by different names (for example: Council, Board, Steering Board, Board of Director, Steering Committee). In the initiatives that have a general assembly, the management board is elected by and reports to this general assembly, usually for a term of three years. For company initiatives, no such accountability exists. The management board is made up of (full) members of the initiative, although the number and distribution of members varies considerably between schemes, and are sometimes organised to reflect group affiliation. In most initiatives, the management board is the decision-making authority, responsible for the management of the scheme, which may even comprise the vote on standards. In others, it has a more preparatory function. Votes are usually taken based on consensus, even though other quorums exist. However, as for the general assembly, it is not known if these deviations from consensus are used in practice. Few schemes address conflicts of interests among board members. For example, in Bonsucro, the conflicted director “is not to be counted as participating in the decision-making process”. As for decisions by the general assembly, no specific rules are disclosed on decision-making procedures.

43

RSB, Articles of association [2012], Art. 12.5, 12.8.

44

ISO, ISO Guide 2 – Standardisation and related activities – general vocabulary [2004].

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6.4.3.3 Expert committees

The different initiatives all have some form of expert and technical committees, which are institutionalised to a varying degree, and which respond to the management board. Under the 2BSvs scheme, the technical advisor acts as a manager with secretarial function. Other schemes have appointed expert committees for technical advice on standards and issues surrounding certification, usually as permanent technical committees and ad hoc working groups. However, expert committees cannot be equated to scientific or technical expertise. Expert committees can also be convened for a variety of stakeholders on specific issues, without necessarily separating policy and scientific considerations.



6.5 The standard-setting process

Few voluntary schemes give details on their decision making procedures beyond the voting mechanism, with the exception of detailed rules provided by SAN and FSC. Accordingly, the level of legitimacy generated by procedures is difficult to assess. However, several international or transnational standards at least give an indication of good practice, and are referred to by some scheme. These standards include the ISEAL Code of Good Practice for setting social and environmental standards, 45 the ISO Guide 59:2004 Code of good practice for standardisation, or the World Trade Organisation’s Code of good practice for the preparation, adoption and application of standards. 46 These codes contain general rules on transparency, public and stakeholder participation as well as on balancing of different interests. These come nowhere near prescribing a specific administrative process. Accordingly, voluntary initiatives remain quite free in their standard setting process even when abiding by a code of practice.



6.6 Analysis

The sustainability criteria in RED are designed as metastandards, making use of pre-existing and purposefully designed certification schemes. The practical advantages of this referral are confronted by issues of legitimacy of the referral, leading to the question of self-legitimacy of the different schemes. Certification systems have their own procedures and quality standards, which generate both input and output legitimacy. However, the degree of recurrence to technical and scientific expertise and the appropriate representation of 45

http://www.isealalliance.org/ (13/2/2012).

46

Annex 3 Agreement on Technical Barriers to Trade.

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all stakeholders and interests through membership and voting powers differs considerably among the schemes. The different initiatives often over-represent interests of the industry as well as interests from the northern hemisphere. Overall, the density of institutional and procedural safeguards is higher in multi-stakeholder initiatives and technical organisations than in company schemes. However, considerable variation also exists between the different multi-stakeholder initiatives, and the level of self-legitimacy generated by input and output legitimacy in the different initiatives varies consequently. However, this only means that legitimacy is lower than it could be: it is not possible to assess whether the different initiatives generate “sufficient” legitimacy, as no benchmark exists that to which these schemes could be held. Indeed, considering the normative definition of legitimacy (acceptability in the public sphere), it has to be borne in mind that measures of input and output legitimacy are only proxies for this overall concept. The question is different for the compensation for a loss of democratic legitimacy of state law through the referral to private standards. This will have to be assessed with criteria from the respective constitutional law. Moreover, in the case of voluntary initiatives, it has to be borne in mind that the procedures mediating input and output legitimacy cannot be expected to reach a level that prevents these informal structures from achieving their intended results. Potentially, some common rules could be deduced from the different initiatives, creating a quasi-common-law of voluntary initiatives, essentially creating a minimum standard. The sample of certification systems discussed here is too small, and the variations between them too great, to deduct foundational rules by which the certification systems seek to abide, and whether a minimum level of legitimacy can be deducted. Some benchmarks are provided through another voluntary initiative, ISEAL, whose members have agreed common rules for standard-setting, which they then apply in their own initiatives. RED had the potential to contribute to establishing harmonised rules on the governance of voluntary initiatives, but has not done this: input and output legitimacy not are part of the recognition process. Accordingly, RED does not set a minimum standard for self-legitimacy of voluntary schemes.

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The Standards of Certification Systems

chapter 7

the standards of certification systems

Chapter 5 was concerned with the referral by Art. 18 (4) RED from the perspective of the legitimacy of the referral and resulting issues on the governance of the different certification systems. In the following, the substantial standards set up by these certification systems, their principles and criteria, and chain of custody standards will be assessed and the impact of the benchmarking against the sustainability criteria will be investigated. The standards will be assessed regarding their impact on the protection of natural resources and will be put in relation to the RED sustainability criteria. In order to support this assessment, some certification systems will be addressed in more detail. The focus will be on certification systems recognised by the Commission. These include: • The International Sustainability and Carbon Certification (ISCC), which was developed for showing compliance with the German sustainability ordinances1 will be considered as recognised by the Commission (ISCC-DE and ISCC-EU).2 • The Roundtable on Sustainable Biofuels (RSB) will serve as an example of a multi-stakeholder initiative and will be addressed both in its generic3 and its “Access to the European Market” Standard (RSB-EU RED) specifically developed for compliance with RED, 4 and the Bonsucro standard, which has incorporated specific EU requirements into its global standard, which apply additionally for imports into the EU.5 • The corporate standards Greenergy Brazilian Bioethanol verification programme (Greenergy) originally developed for compliance with the UK Renewable Fuel Transport Obligation (RTFO)6 and Biomass Biofuels voluntary scheme (2BSvs),7 developed explicitly for compliance with RED will be addressed. Thus, there is a mix of standards predating and succeeding RED. These will be considered alongside several other standards that are not recognised, but are important in their own contexts: • The Roundtable on Sustainable Palm Oil (RSPO)8 which has not been 1

 Verordnung über Anforderungen an eine nachhaltige Herstellung von flüssiger Biomasse zur Stromerzeugung (Biomass Electricity Sustainability Ordinance, BioSt-NachV), BGBl. I [2009] 2174; Verordnung über Anforderungen an eine nachhaltige Herstellung von Biokraftstoffen (Biofuel Sustainability Ordinance, Biokraft-NachV), BGBl. I [2009] 3182.

2 3

ISCC, Sustainability requirements for the production of biomass, ISCC 202 [2011].

RSB, Principles & criteria for sustainable biofuel production, RSB-STD-01-001 [2010].

4

RSB, Consolidated RSB EU RED Principles & Criteria for Sustainable Biofuel Production, RSBSTD-11-001-01-001 [2011].

5

Bonsucro, Bonsucro production standard including Bonsucro EU production standard [2011].

6 7

Greenergy, Bioethanol sustainability criteria for Brazilian sugarcane, STD DOC – 002 v.5 [2011].

2BSvs voluntary scheme, Requirements for the verification of biomass production (first gathering entity and biomass producers), 2BSvs-STD-01 [2011].

8

RSPO, Principles and criteria for sustainable palm oil production [2007].

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recognised by the Commission or the BLE will be addressed, as it is a major certification system on biofuels and bioliquids and has been operating for a comparatively long time (since 2002), so some experience is available on the application of the standards. • The Forest Stewardship Council9 and the Sustainable Agriculture Network/ Rainforest Alliance10 standards are not recognised by the Commission, but play a major role in biomass certification. Notably, the standards of the technical organisations ISO and CEN have not yet been finalised and will therefore not be considered here – although many specific ISO technical standards are relevant, and are referenced by the certification systems for specific purposes. The principles and criteria of the different certification schemes will be addressed first; these apply to biomass production and sometimes to processing. Then, the chain of custody standard, which can extend from the biomass producer or first processor to the end user depending on the method chosen, will be addressed.

Diagram 4: certification standards



7.1 Principles and criteria

The principles and criteria of the different schemes follow the same structure. They establish general principles on the aim of the standard,11 which are detailed further in criteria.12 They are accompanied by indicators for showing compliance,13 sometimes accompanied by verifiers, enumerating tools for showing compliance, and non-binding guidance.14 Together with the chain of custody, they form the substantial standards of a certification system. The 9

FSC, Principles and criteria for forest stewardship, FSC-STD-01-001 (version 4-0) EN [1996].

10 11

SAN, Sustainable agriculture standard, SAN-S-1-1 [2010].

See for example the definition in RSB, Glossary of terms [2011]. “description of the general intent of performance defined by the RSB”.

12

See for example the definition in Ibid. “objective of performance which is specifically and measurably operationalising an RSB principle”.

13

See for example the definition in Ibid. “outcome specifying a single aspect of performance which is specifically, measurably and achievably operationalizing an RSB Criterion.”

14

Indicators, verifiers and guidance are usually contained in the production standard. However, sometimes, a separate document is (also) made available, see for example RSB, Indicators of Compliance for the RSB Principles & Criteria, RSB-IND-01-001 [2011]; RSB, Guidance on principles & criteria for sustainable

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certification schemes have drafted principles and criteria on environmental and socio-economic issues.



7.1.1 Scope of application

The scopes of the standards differ in the matters covered and the activities addressed. As seen in the previous chapter, the FSC applies to forestry, the SAN to agriculture in general, and the RSPO covers all palm oil, irrespective of its end use. The standards drafted specifically for compliance with the sustainability criteria, such as 2BSvs and ISCC apply to biofuels, bioliquids and biomass used for their production as defined in Art. 2 RED. Notably, the RSB global standard has a much broader scope of application than the access to the EU standard adapted specifically to comply with the sustainability criteria. The RSB global standard applies to biofuels (defined by RSB as fuels for transport or other uses, including power, and heating and cooling) irrespective of the aggregate state.15 However, the RSB EU RED standard defines biofuels (for transport) and bioliquids, in line with the RED.16 Many of the schemes (e.g. Greenergy, 2BSvs, and Bonsucro) establish only general principles and criteria. Others have developed sector-specific regimes, for example on special standards for crops,17 or may endorse national interpretations to allow local circumstances to be taken into account.18 The activities covered also differ between the different initiatives. Some standards are drafted as production standards such as Greenergy, 2BSvs or ISCC. Others, such as the RSPO, RSB and Bonsucro, take a broader stance, also incorporating processing of feedstock or the production of the biofuel. Thereby, the impacts covered by the different certification systems can already be held to differ considerably before even assessing their substance.



7.1.2 Compliance with national laws and regulations

Some of the standards require operators to comply with national laws and regulations of the host state in order to be certified under the certification system. Nearly all schemes refer to national standards: RSB, Bonsucro, the FSC, Greenergy, ISCC and the RSPO. The provision is usually the first principle established in the standard, proving its importance. A representative biofuel production, RSB-GUI-01-000 [2010]; RSPO, Principles and Criteria for sustainable palm oil production – guidance for smallholders [2009]. 15

RSB, Use of terms for the RSB principles & criteria (glossary), RSB-DOC-10-002 [2010], 6.

16

RSB, EU-RED Glossary of Terms, RSB-DOC-11-001-10-001 [2011], 7. However, besides the scope of application, the global and EU RSB principles and criteria. In the interest of conciseness, only the global standard will be referred to unless diverging provisions are contained in the RSB-EU standard.

17

RSB, Standard for adaptation to crop specific conditions, RSB-STD-15-001 [2011].

18

See for example RSPO, National interpretation of RSPO principles and criteria for sustainable palm oil production – Republic of Indonesia [2011].

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from an environmental NGO described the referral to national laws a key instrument in overcoming enforcement deficits of national law.19 However, no equivalent provision is contained in Art. 17 RED or for example the German sustainability ordinances implementing the sustainability criteria. Accordingly, the 2BSvs standard designed for compliance with RED also makes no reference to national law, nor does Greenergy, originally established to show compliance with the UK RFTO.



7.1.3 GHG emissions

Initiatives that focus on issues other than energy, such as the FSC and SAN do not contain provisions on the GHG emission balance of certified products. No minimum threshold of GHG savings is set, nor a methodology established for measuring GHG emissions. Thus, the potential for reducing climate change impacts of certified products is lost. However, the RSPO recognises the importance of the negative climate balance of palm oil products, requiring certified operators to consider and reduce emissions. It has established a working group on GHG emissions, which issued its final recommendations in November 2011.20 Similarly, the SAN has developed a specific climate module for certification where its standards are amended to minimise negative climate impacts.21 Nonetheless, the progressive emission reduction threshold in Art. 17 (2) RED and the methodology in Art. 19, Annex V RED could serve as a motor for raising the level of protection in voluntary standards. Moreover, the development of a common methodology through public regulation may make it easier for voluntary schemes to introduce provisions on climate change mitigation, as they may thereby not need to develop complex methodologies and default values on their own. Of the schemes predating RED, the RSB already had finalised principles and criteria on GHG emissions: the RSB has developed a methodology for the calculation of GHG emissions in a life cycle analysis based on accepted science and updated periodically, incorporating above– and below–ground carbon stock changes. With 50% reduction requirements, the RSB is today considerably more stringent than the 35% of Art. 17 (2) RED. Thus, the RED criteria put pressure on this higher standard. Standards drafted for compliance with the sustainability criteria, such as 2BSvs and ISCC comply with but do not exceed the GHG emission reduction requirements in RED. However, the harmonising effect of the RED sustainability criteria on GHG emissions is mainly limited to produce traded in the internal market. For example for Bonsucro, the RED requirements only apply for biomass in the EU, otherwise, only the general requirement to reduce emissions of any kind applies. 19

Interview with a representative of an environmental NGO (30/1/2013).

20 21

RSPO, Outputs and recommendations [2011].

SAN, Climate module – criteria for mitigation and adaptation to climate change [2011].

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7.1.4 Environmental standards

All considered schemes make provisions on environmental issues. However, the scope of the environmental standards differs considerably. The company schemes 2BSvs and Greenergy, and ISCC are limited to excluding the no-go areas excluded by RED. On the other hand, roundtable initiatives and other schemes predating the drafting of RED, such as Bonsucro, RSB, RSPO, FSC and SAN take a broader stance, addressing impact assessment and environmental management practices, which also lead to the exclusion of certain areas. However, even between those schemes, the focus of the environmental standards varies. Notably, considering that the Commission has not yet drafted a definition of grassland, none of the schemes is recognised for this no-go area; nor have they sought recognition. In the following, the standards, impact assessment and environmental management will be investigated.



7.1.4.1 Impact assessment and management practices

The effect of an impact assessment and management practices depends on the scope and the stringency of the principles and criteria of the relevant certification scheme. Moreover, the requirements for the impact assessment and management itself are crucial. Notably, 2BSvs and ISCC do not address environmental impact assessments, which is in line with RED. The scope of the impact assessment varies across the different certification systems. Some, such as Bonsucro and the FSC, focus on environmental impacts, others such as RSB, RSPO and SAN require impact assessments to also consider social factors. Besides conservation values, issues of soil, water and air are addressed to a varying degree (see below). For the most part, environmental impact assessments are limited to the cultivation and milling of the feedstock, and hence disregard further processing and transportation. Similarly, the density of regulations differs further between the schemes. Usually, reference is made to international standards on impact assessment such as ISO 14001:2004, which sets up process requirements rather than hard targets. Usually, some additional requirements are made, but for the majority of the schemes stay very general, such as the RSPO, providing guidance but few indicators. Improvements are typically required by management practices. However, environmental management is still essentially a process requirement that does not guarantee a certain outcome. These process requirements are comparatively cheap to assess, encourage the building of infrastructure and increase transparency.22 At the same time, awareness and management structures do not themselves offer any guarantee of better outcomes or even compliance with environmental goals.23 22

McBride, A. C. et al., “Indicators to support environmental sustainability of bioenergy systems,” Ecol. Indicators 11(2011) 1277-1289: 2.

23

McCarthy, J. and Zen, Z., “Regulating the oil palm boom: assessing the effectiveness of environmental governance approaches to agro-industrial pollution in Indonesia,” Law & Pol’y 32, no. 1 (2010) 153-179:

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Others, such as the RSB, make very precise provisions on management plans, also requiring operators to commit to continuous improvement, enhancing ecosystem functions and observing minimum requirements. Unlike under RED, the viability of ecosystems is taken into account. Equally– or more–stringent requirements are made by SAN and FSC. The FSC even takes a precautionary approach, where if the available information indicates a threat to environment or people, explicit and effective corrective measures shall be taken even when scientific information is incomplete or inconclusive. Even though the environmental management approaches employed by many certification systems are not a sufficient tool to completely remove the environmental impacts of bioenergy production, they probably have some benefit. In this regard, the sustainability criteria are a step backwards compared to voluntary schemes. At the same time, the inclusion of existing European and national legislation, for example on environmental impact assessment 24 into RED or the application of standards of good agricultural practice beyond domestic biomass (Art. 17 (6) RED) could have positively influenced voluntary standards through benchmarking.



7.1.4.2 Excluding high conservation value areas

All certification systems considered here have a concept of no-go areas. This is already mandated by the requirement for operators to comply with national laws and regulations (see above), which includes provisions on environmental protection and conservation areas.25 Moreover, reference is often made to areas subjected to protection and conservation regimes by international agreements (such as the Ramsar Convention).26 However, the nomenclature in the different schemes does not usually align with the definitions used by RED. The schemes drafted for proving compliance with the RED sustainability criteria have introduced no-go areas corresponding to those in Art. 17 (3) to (6) RED, supplemented by indicators and verifiers, making them operationable. Other schemes go further in the areas they consider exempt. In particular, some schemes, such as the FSC or Greenergy, refer to high conservation value (HCV) areas, which follows a much broader notion of valuable ecosystems.27 167; Boiral, O., “Corporate greening through ISO 14001: a rational myth?,” Organization Science 18, no. 1 (2007) 127-146; RSPO, Principles and Criteria for sustainable palm oil production – guidance for smallholders [2009]. 24

See for example Council, Directive 85/337/EEC on the assessment of certain public an private projects on the environment, OJ [1985] L 175/40; European Parliament and Council, Directive 2001/42/EC on the assessment of the effects of certain plans and programmes on the environment, OJ [2001] L 197/30.

25

However, this requirement is sometimes explicitly mentioned, for example in Greenergy, Bioethanol sustainability criteria for Brazilian sugarcane, STD DOC – 002 v.5 [2011], C2.1.

26 27

See Ibid., principle 2.

HCV Resource Network, Charter [2010], guiding principles. See also http://www.hcvnetwork.org/ resources/global-hcv-toolkits (22/2/2012). Another tool available is for example IBAT, see www.ibatfor-

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Under the RSB, the conservation values of local, regional or global importance within the existing or potential operation site shall be maintained or enhanced. Minimum requirements are the screening for conservation values and a special impact assessment,28 prioritising solutions to minimise negative impacts. Notably, the RSB global standard also has a concept of no-go areas. Through its reference to improving conservation values through management practices, the RSB goes further than the ecosystem-specific RED sustainability criteria. Nonetheless, the RSB global standard was adapted in order to gain EU recognition.



7.1.5 Impacts of agriculture

Under Art. 17 (6) RED, rules of agricultural good practice only apply to biomass produced within the EU. Overall, impacts on soil, water and air are not part of the binding sustainability criteria. Again, most voluntary schemes go further, incorporating water, soil and air protection, although to varying degrees, feeding into the environmental impact assessment and management (see above). Notably, 2BSvs, drafted for compliance with RED only gives non-binding recommendations on these issues. All other schemes contain binding provisions on water, soil and air protection, even though the factors addressed and the density of regulation differs. For example, the FSC and Bonsucro address only a few issues surrounding these factors. The density of regulation extends from the general provisions of Greenergy to the detailed provisions, at least on soil and water, by SAN. Notably, it is over the impact of biomass production on water, soil and air that differences emerge between the ISCC-DE and the ISCC-EU standard, even though neither Art. 17 RED nor the German sustainability ordinances for which the DE standard was drafted create binding criteria on these issues.



7.1.6 Socio-economic standards

Socio-economic criteria play a major role in most certification systems. Only 2BSvs does not have binding socio-economic criteria. The other schemes contain elaborate provisions on socio-economic considerations amounting to about half the total text of the standard, in many places going far beyond the elements contained in the reporting requirements in Art. 17 (7) RED. Like for the environmental criteria, some schemes take a comprehensive approach requiring detailed social impact assessments and management systems (see environmental impact assessment and management above, see RSB, RSPO, SAN). All schemes make provisions on specific social issues such as land rights and other rights of local communities and human rights and labour conditions, and some also address broader development issues and interactions with food supply. business.org (22/2/2012). 28

RSB, Conservation impact assessment guidelines, RSB-GUI-01-007-01 [2011].

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7.1.7 Compliance requirements on operators

The number and scope of the different criteria vary extensively across the certification schemes, but this is still only half the picture. Not all principles and criteria have to be complied with in equal measure. Either a minimum percentage has to be complied with or, like in most schemes classification of criteria is undertaken, differentiating between critical, major and minor criteria – although though the terminology and consequences attached to the classification differ. Sometimes specific criteria are classified in these categories, sometimes the extent of the violation is the decisive factor. Usually, violation of critical criteria prevents certification, while lesser violations require a re-audit or can be addressed before the next audit.



7.2 Chain of custody

The chain of custody allows the tracing of consignments with certain characteristics within an inventory period. Thus, it is an integral part of proving compliance at the point of use. In particular, it is used to document the energy balance along the chain of custody within schemes that address GHG emissions, such as for the recognised schemes. The certification systems considered here most commonly allow for three chains of custody known as ‘identity preserved’, ‘segregation’, and ‘mass balance’ which allow for different degrees of mixing of compliant produce, although others exist: • Under the identity preserved chain of custody, produce from each mill must be kept separately. This standard can be used under the RSB,29 the RSPO30 and SAN (‘controlled blending’).31 • The segregation chain of custody allows for produce with the same properties to be mixed. This standard can be used under the RSB32 and SAN33 as well as ISCC EU.34 29

RSB, Generic chain of custody standard, RSB-STD-20-002 [2011]; RSB, “Identity of product perserved” chain of custody standard, RSB-STD-20-002 [2011].

30 31

RSPO, Supply chain certification systems [2011], 3.2.

SAN/Rainforest Alliance, Chain of custody policy [2012], 1h; SAN/Rainforest Alliance, Chain of custody standard [2012].

32

RSB, Generic chain of custody standard, RSB-STD-20-002 [2011]; RSB, “Segregation of product” chain of custody standard, RSB-STD-20-003 [2011].

33

SAN/Rainforest Alliance, Chain of custody policy [2012], 1h; SAN/Rainforest Alliance, Chain of custody standard [2012]; SAN/Rainforest Alliance, List of permitted mass balance products [2012]. See also SAN, Sustainable agriculture standard, SAN-S-1-1 [2010], 1.10.

34

ISCC, Requirements for traceability, ISCC 203 [2011]; ISCC, Mass balance calculation methodology, ISCC 204 [2011]; ISCC, Anforderungen an die Rückverfolgbarkeit, ISCC 203 [2011]; ISCC, Berechnungsmethoden der Mengenbuchhaltung, ISCC 204 [2011].

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• The mass balance approach tracks the mass equivalent of compliant produce along the supply chain. Mass balance can be documented at tank level, site level or even at company level. This standard can also be used by the RSB,35 RSPO36 and SAN,37 as well as the ISCC.38The mass balance system is also used by Bonsucro39 and the FSC. 40 Moreover, it is the only chain of custody under the company schemes Greenergy41 and 2BSvs. 42 The choice of the chain of custody by the certification system depends on the trade-off between ensuring compliance and limiting the disruption to the economic operation. While physical segregation is easily audited, the mass balance and book and claim approaches have proven to be less complex and more practical within existing supply chains. In its Communication on voluntary schemes, 43 the Commission favoured the mass balance chain of custody for all voluntary certification schemes. Art. 18 (1) RED has chosen the mass balance system as chain of custody for the sustainability criteria for Member States’ implementation, and Member States are therefore bound to the more industryfriendly approach. However, further harmonisation of the different chain of custody requirements is required. Firstly, several chains of custody are treated as compliant under the different certification systems, and secondly, different schemes have different requirements within each chain of custody. In particular, the certification requirements on cultivators differ, with certification of the first gathering entity allowing a less costly certification to smallholders. 44 35

RSB, Generic chain of custody standard, RSB-STD-20-002 [2011]; RSB, “Mass balance of product” chain of custody standard, RSB-STD 20-005 [2011].

36 37

RSPO, Supply chain certification systems [2011], 3.2.

SAN/Rainforest Alliance, Chain of custody policy [2012], 1h.

38

ISCC, Requirements for traceability, ISCC 203 [2011]; ISCC, Mass balance calculation methodology, ISCC 204 [2011]; ISCC, Anforderungen an die Rückverfolgbarkeit, ISCC 203 [2011]; ISCC, Berechnungsmethoden der Mengenbuchhaltung, ISCC 204 [2011].

39

Bonsucro, Bonsucro production standard including Bonsucro EU production standard [2011], criterion 7.3.

40

FSC, Standard for chain of custody certification, FSC-STD-40-004 [2011]; FSC, Chain of custody standard for project certification, FSC-STD-40-006 [2006]; FSC, Standard for multi-site certification of chain of custody operations, FSC-STD-40-003 [2007]; FSC, Group chain of custody certification: FSC guidelines for certification bodies, FSC-POL-40-002 [2004].

41

Greenergy, Chain of custody requirements, COC DOC – 003 [2011].

42

2BSvs voluntary scheme, Requirements for the verification of biomass production (first gathering entity and biomass producers), 2BSvs-STD-01 [2011], principle 0, 1.

43

Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01.

44

See for example RSB, Standard for participating operators, RSB-STD-30-001 [2011], 3.2.7; FSC, Policy on group certification, FSC-POL-20-001 [1998]; SAN/Rainforest Alliance, Group certification policy [2011]; UNEP. “Biofuel group certification – ensuring that smallholders can participate in biofuel markets.” In Bioenergy issue papers. Nairobi: UNEP, 2011.

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7.3 Analysis

On the issues addressed, voluntary certification reinforces national standards. This is not only by reference to national laws and regulations, but also through substantive criteria. Compliance with voluntary standards has been found to partly compensate for compliance deficits at national standards. 45 Thereby, voluntary certification schemes appear to be a prime instrument in environmental protection in developing and newly industrialised countries where low standards and/or low enforcement rates hinder environmental protection. However, the recurrence to certification systems is also limited. Certification is undertaken at operation level, i.e. microeconomics. Macroeconomic problems such as food supply and food prices or indirect land use changes cannot be addressed by the certification of individual operations. 46 By design, they can only assess direct impacts such as pollution from a production mill, land conversion for a plantation, or the working conditions of people on site. Indirect impacts such as indirect land use changes or the impact of bioenergy production on food safety cannot be covered: individual operators cannot reasonably be required to monitor food prices and other macro-scale problems. Accordingly, few schemes address competition with food at all, and it is unclear if these provisions can affect overall food security. Indirect land use changes are, like the issue of competition between different uses of biomass, currently not addressed by any certification system. However, these impacts are crucial if the side effects of bioenergy are to be addressed comprehensively. Thus, certification alone is not sufficient to address the full range of negative impacts of bioenergy – although it may still contribute to addressing them, by providing local data. Certification systems are only one of many tools necessary for addressing the impacts of bioenergy. For macroeconomic effects, public regulation remains a necessary instrument. 47 When criticising the level of protection awarded by certification systems, it has to be borne in mind that environmental and socio-economic concerns have to be put in context of the economic operation. High environmental standards are not viable if an agricultural operation cannot fulfil them, thus affecting the livelihoods of owners and employees. Thereby, a balance has to be struck between economic, ecological, and social interests. 48 Moreover, certification systems also have to consider what is achievable. A standard that sets targets that cannot be reached will not allow the scheme to start working with operators as they are (and then evolve with them from there): the barrier to entry would be too high. Defining standards at a higher level may mean no certification will be issued, whereas the current situation may at least contribute to improving the situation. However, there is some evidence that the stringency of certification 45

Interview with a representative of an environmental NGO (30/1/2013).

46 47

Interview with a representative of a group of labelling organisations (15/3/2012).

Interview with a representative of a group of labelling organisations (15/3/2012).

48

Interview with a member of the technical committee of a certification system (29/2/2012).

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systems is not only influenced by the capacities of operators seeking certification. It appears to be influenced by the actors involved, as demonstrated by the very generic requirements under the 2BSvs scheme, developed by the French industry, a country where a lack of capacity cannot reasonably be suspected. Even though industry-led standards are not necessarily less rigid across the board, standards with strong industrial stakeholder involvement usually leave more margin for manoeuvre than, for example, the academic-led RSB. Leaving aside GHG emissions, all voluntary schemes address broader environmental and social impacts. 49 However, the variety among the different standards is considerable. Efforts for cross harmonisation are made by some certification systems, considering certain certifications as equivalent for the certification under their own, for example where the latter is recognised by the Commission.50 However, the harmonisation capacity of voluntary certification systems does not appear very high: For example, FSC and the Programme for the Endorsement of Forest Certification (PEFC)51 have not yet established equivalences even though both address the forestry sector. Notably, most standards focus on the cultivation aspects, without addressing environmental impacts from processing the final product and transportation (the RSB is an exception here). The different certification schemes address environmental and socioeconomic standards, in particular environmental management and biodiversity, and abiotic factors such as soil, water and air as well as human rights, labour conditions, land and land use rights. However, the focus of the different schemes as well as the regulatory density of each issue differs across the schemes.52 Overall, the standards in multi-stakeholder initiatives cover a wider scope and are more detailed than company initiatives. However, variations also exist between different multi-stakeholder initiatives. The FSC and SAN are the most detailed schemes, making specific provisions on management practices and requiring operators to set individual targets. The RSB appears to seek to address all issues by equal measure. ISCC, SAN and FSC make detailed provisions on labour conditions. Soil and water are another focus of the SAN, whereas the FSC focuses on biodiversity aspects. Compared to the other multi-stakeholder initiatives, the requirements of Bonsucro are much more general, and compared to all of these standards, Greenergy and 2BSvs appear as minimum standards, only exceeding the requirements of the RED sustainability criteria 49

van Dam, J., Junginger, M., and Faaij, A. P. C., “From the global efforts on certification of bioenergy towards an integrated approach based on sustainable land use planning,” Renewable and Sustainable Energy Reviews 14, no. 9 (2010) 2445-2472: 2454.

50 51

See for example ISCC, Kooperation mit anderen Zertifizierungssystemen, ISCC 254 [2011].

http://www.pefc.org/ (22./2/2012).

52

van Dam, J., Junginger, M., and Faaij, A. P. C., “From the global efforts on certification of bioenergy towards an integrated approach based on sustainable land use planning,” Renewable and Sustainable Energy Reviews 14, no. 9 (2010) 2445-2472: 2457.

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in very limited aspects. Similarly, the public participation requirements of ISCC appear lower than for example in RSB. Besides the standards themselves, the objectives of the standards concerning various issues differs, from avoiding negative impact to improving quality and quantity through restoration or promotion. Similarly, the various schemes choose different mixes of management (process) requirements and minimum targets, although the focus remains on process rather than target requirements. Notably, minimum requirements are often implied through management practices. Considering the broad programmatic scope of principles and criteria, the indicators are crucial to the level of protection achieved in practice.53 The general principles are made usable as indicators, which are then interpreted further by auditors. For a meaningful audit, indicators that reflect environmental impacts and are auditable in practice are crucial.54 This is a particular issue for the RSPO, which has few indicators, but extensive non-binding guidance. Similarly, certification systems such as 2BSvs or SAN only have few critical indicators, where compliance is mandatory for certification. Thus, there is a considerable margin of manoeuvre. The representative of a certification body suggested that meaningful indicators could only be achieved if certification systems employed experienced auditors in drafting their standards and certification systems, which is not always be the case.55 The variety in scope, definition, individual standards and density of regulation in the certification schemes creates a very non-transparent market for consumers, but also the economic operators themselves. Where standards are not harmonised, the risk of “standards shopping” leads to market distortion and loss of credibility.56 Accordingly, the WWF has proposed the development of a common benchmark for all certification systems involved in agricultural products.57 The role of such a meta-standard could be fulfilled to some degree by benchmarking against the RED sustainability criteria. However, the RED criteria are much too limited in scope of application (i.e. only biofuels and bioliquids and biomass for their production). Most certification systems address more issues than the RED sustainability criteria, incorporating socio-economic factors and provisions on soil, water and air, which do not form part of the substantial sustainability criteria. For most schemes, socio-economic issues are interlinked 53

COWI Consortium. “Technical assistance for an evaluation of international schemes to promote biomass sustainability “. Petten: European Commission – Directorate General for Energy and Transport, 2009, 76.

54

McBride, A. C. et al., “Indicators to support environmental sustainability of bioenergy systems,” Ecol. Indicators 11(2011) 1277-1289.

55

Interview with a representative of a certification body (21/11/2011).

56

van Dam, J., Junginger, M., and Faaij, A. P. C., “From the global efforts on certification of bioenergy towards an integrated approach based on sustainable land use planning,” Renewable and Sustainable Energy Reviews 14, no. 9 (2010) 2445-2472: 2452.

57

Feige, A., Mey, F., and Fleckenstein, M. “Ein Standard für die Standards – Nachhaltigkeitsstandards für Agrarrohstoffe.” Berlin, Bonn: WWF, Meo Carbon, 2012.

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with environmental concerns to varying degrees. In this regard, the voluntary initiatives go much further than the RED criteria, which only stipulate reporting requirements on human and property rights, commodity price changes food security and other social aspects (Art. 18 (7) RED). As such, the RED criteria lead to worries of cementing – and legitimizing – lower standards.58 Moreover, environmental provisions in voluntary schemes go further than the mere exclusion of certain ecosystems, requiring impact assessments and environmental management practices beyond carbon sinks and biodiverse areas, addressing these issues more comprehensively. In particular, environmental protection provisions typically not only exclude the cultivation of an area, but also ensure the viability of ecosystems and the provision of ecosystem services. Nonetheless, not all standards addressed here could be recognised for proving compliance with the RED sustainability criteria, notably for the lack of provisions on a GHG emission balance. The only area where a benchmarking against the RED sustainability criteria appears to be beneficial is increasing the stringency of environmental management through area exceptions and on GHG emissions and the GHG calculation methodology. Climate aspects are otherwise rarely considered in pre-RED certification systems. However, where they are considered (such as by the RSB), those standards have more stringent requirements than those of RED, limiting its value for a harmonisation at a high level. In fact, certification systems have the potential to improve the RED sustainability criteria. Where they are benchmarked against RED, any provisions that exceed RED still apply. Accordingly, criteria can still enter the RED sustainability criteria through the “back door” of the recognition procedure. However, the low benchmark of RED compared to the reality of certification systems also puts pressure on those certification systems. Certification systems and certification bodies do not operate in a vacuum, but in a competitive market on certification. More-complex standards increase certification costs, influencing their attractiveness to economic operators and certification bodies. Besides membership fees, certification systems generate their income through part of the certification fee,59 so that the number of certificates issued is an essential factor for the continued operation of the certification system. High-level certification systems such as the RSB come under pressure from certification systems drafted to meet the minimum requirements of RED, such as the 2BSvs. Benchmarking against the RED criteria may in fact lead to harmonisation at a lower level. The representative of a certification body expressed the view that certification under a particular high-level scheme was too complex and therefore too expensive to be economically viable for this certification body.60 Similarly, a representative of a professional association described certification under one minimal scheme as much more popular with economic operators than a 58

German, L. and Schoneveld, G. C. “Social sustainability of EU-approved certification schemes for biofuels.” Bogor: CIFOR, 2011, 28.

59

Interview with a representative of an environmental NGO (30/1/2013).

60

Interview with a representative of a certification body (21/11/2011).

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competing higher-level scheme.61 Accordingly, competition between recognised certification systems is likely to act in favour of standards that comply with but do not exceed the sustainability criteria. The recognition system may thus result in, if not to a “race to the bottom”, a race to the lowest permissible standard. Even at the low level set by the sustainability criteria, their impact on standards harmonisation is limited: instead of incorporating the requirements of the sustainability criteria into their generic (global) standard, certification systems have drafted specific EU versions that apply to produce traded in Europe. Thereby, the benchmarking has in many places (e.g. Bonsucro, RSB, RSPO) simply led to the proliferation of standards.62 The parallel recognition process for Commission and Member States’ implementation led to further proliferation of standards (e.g. ISCC EU/DE), without apparent higher quality of one version or the other. Thereby, transparency is not increased and complexity not reduced by the recognition process, which would be the objective of a benchmark. Accordingly, the EU cannot be seen as driving an increase in the level of protection achieved by voluntary certification schemes. If anything, it has raised their profile, leading to a discussion on certification systems.63 However, the mechanism is still explicitly open to evolution: the Commission was required to report on the effectiveness of the compliance mechanism under RED by the end of 2012 and propose corrective action if appropriate (Art. 18 (9) RED), but this does not appear to have happened.

61

Interview with a representative of an association of biofuel producers (26/1/2013).

62

Another example is the RSPO, which has since the time of writing developed an RSPO-RED standard only applying to the EU, which has been recognised by the Commission. The generic RSPO standard does not contain requirements on the GHG emission balance. See RSPO, Requirements for compliance with the EU renewable energy directive requirements [2012]. and Commission, Implementing decision 2012/722/EU on recognition of the Roundtable on Sustainable Palm Oil RED scheme for demonstrating compliance with thte sustainability criteria under Directives 98/70/EC and 2009/28/EC, OJ [2012] L 326/53.

63

Interview with a member of the technical committee of a certification system (29/2/2012).

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chapter 8

certification as a means of compliance control

Weaknesses of the principles and criteria directly affect the impact of the conformity assessment. Even the most stringent standards cannot affect the level of environmental protection if they are not observed. Accordingly, the compliance control mechanism for principles and criteria and chain of custody standards is crucial. For these compliance control mechanisms, Art. 18 (4) RED provides a framework aimed at benchmarking compliance control for the sustainability criteria. Voluntary certification systems ensure compliance through the certification of products, in procedures that are often also referred to as certification systems. Rather than compliance control, the term conformity assessment is often used, giving credit to the coordinative function of transnational certification systems. Notably, certification systems set up requirements for certification bodies and auditing of compliance with principles and criteria as well as chain of custody standards. In the operation of certification systems, independent auditing – so-called third party certification1 – seeks to ensure an impartial process. Accountability mechanisms can be introduced such as direct monitoring or a dispute settlement mechanism.2 As for the assessment of the substantial standards, the 2BSvs,3 Greenergy, 4 RSB Global5 and RSB EU,6 ISCC EU7 as well as RSPO,8 FSC9 and SAN/Rainforest Alliance10 will be addressed.

1

Tanner, B., “Independent assessment by third-party certification bodies,” Food Control 11, no. 5 (2000) 415-417: 415.

2

Lin, J., “Governing biofuels: a principal-agent analysis of the European Union biofuels certification regime and the Clean Development Mechanism,” J. Environ. Law (2011): 19.

3

2BSvs voluntary scheme, Scheme description, 2BSvs-DES-01 [2011]; 2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011].

4 5

Greenergy, Auditor requirements, AUD DOC – 004 [2010].

RSB, General requirements for certification bodies, RSB-STD-70-001 [2011]; RSB, Requirements for the qualification of accreditation and certification body auditors performing evaluations to the RSB standards under the RSB certification systems, RSB-STD-70-002 [2011].

6

RSB, Consolidated RSB EU RED Standard for participating operators, RSB-STD-11-001-30-001 [2010]; RSB, Consolidated RSB EU RED General requirements for accreditation bodies, RSB-STD-11-001-75-001 [2011]; RSB, Consolidated RSB EU RED Requirements for the qualification of accreditation and certification body auditors performing evaluations to RSB standards under the RSB certification systems, RSBSTD-11-001-70-002 [2011].

7

ISCC, System basics for the certification of sustainable biomass and bioenergy, ISCC 201 [2011]; ISCC, Regulations to carry out audits, ISCC 252 [2011]; ISCC, Requirements for certification bodies, ISCC 251 [2011].

8

RSPO, Certification systems [2007].

9

FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009]; FSC, Forest management evaluations, FSC-STD-20-007 [2009]; FSC, Accreditation standard for chain of custody evaluations, FSC-STD-20-011 [2007]; FSC, Standard for evaluation of FSC controlled wood in forest management enterprises, FSC-STD-20-012 [2007].

10

SAN/Rainforest Alliance, Farm certification policy [2009].

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8.1 Certification and product claims

The term “certified product” gives the impression that the product itself, agricultural produce, palm oil or biofuels, is certified. However, for economy and practicality reasons, it is in fact the economic operators handling the product that are certified, allowing them to use product labels, differing depending on the chain of custody used. Most certification systems allow interested parties active within the scope of certification to become certified, including operators in producing, converting, processing, blending, trading, using or otherwise handling biomass or biofuels.11 However, some initiatives restrict certification to members.12 Thereby, the organisation secures its finances through the payment of membership dues and furthers the participation of (some) stakeholders in the scheme, but at the same time substantially restricts certification. The operators requiring certification differ among the different schemes. Most schemes establish principles and criteria that apply only to the production of feedstock, with the exception of the RSB, which also defines standards for processors and blenders.13 However, not all schemes require cultivators to be certified directly, but only require an assessment of the first gathering entity, auditing only a sample of cultivators.14 The certification of first gathering entities is time and cost efficient and makes certification easier for smallholders.15 On the other hand, it reduces the level of control on cultivation, which is where most of the principles and criteria are addressed.16 The differences between the different schemes extend to which operators require chain of custody certification. For example, under the RSPO (which has not been recognised for RED),17 2BSvs and ISCC, only downstream processors – not suppliers – have to be certified.18 The RSB, which uses a mass balance

11

See for example RSB, Standard for participating operators, RSB-STD-30-001 [2011], 2.2.1-2.2.5.

12

Bonsucro, Certification protocol including Bonsucro EU certification protocol [2011], 3.1.1; Bonsucro, Audit guidance for the production standard including bonsucro EU audit guidance for the production standard [2011], 1.3; RSPO, Certification systems [2007], 4.2.4.

13

RSB, Principles & criteria for sustainable biofuel production, RSB-STD-01-001 [2010].

14

2BSvs voluntary scheme, Scheme description, 2BSvs-DES-01 [2011], 2.1, 3. ISCC, System basics for the certification of sustainable biomass and bioenergy, ISCC 201 [2011], 4.4; ISCC, Group certification, ISCC 256 [2011]. See also CEN, prEN 16214-2 Sustainably procuded biomass for energy applications – Principles, criteria, indicators and verifiers for biofuels and bioliquids – Part 2: Conformity assessment including chain of custody and mass balance [2010], 4.1.2, 4.1.3.

15

Interview with a member of the technical committee of a certification system (29/2/2012).

16

Interview with the manager of environmental affairs at the secretariat of a certification system (1/11/2011).

17

RSPO, Certification systems [2007], Annex, 2, 4.1.

18

See also Cl. 4.1.2 prEN 16214-3:2010.

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system, requires certification to the chain of custody standard from cultivator to the blender.19 Finally, not all schemes require the entire operation of an economic operator to be certified,20 which has been considered as a precondition for the credibility of the schemes.21 Partial certification is, at least temporarily, allowed for example by the RSPO, allowing economic operators time to adapt, but also affecting credibility.22 It is evident that these substantial differences affect the stringency of compliance control through the certification process. However, despite these differences, the recognised schemes are considered equal for compliance with the sustainability criteria. If the operators along the supply chain comply with the principles and criteria and chain of custody standards as required under the certification system, the certification systems allow certain product claims to be made. In the same way as members can make claims to membership,23 claims can be made for products through labelling. These consumer claims or labels are the consumerfacing side of the certification system,24 allowing consumer demand for sustainably sourced produce to be satisfied – and usually at a higher price.25 Most certification systems have their own logos that can be used by certified operators and on their products.26 However, while the label is the same, the product claims differ depending on the chain of custody used, 27 inhibiting real transparency and easy access to information to the consumer. 19

RSB, “Mass balance of product” chain of custody standard, RSB-STD 20-005 [2011].

20

See for example RSB, Standard for participating operators, RSB-STD-30-001 [2011]; RSB, Requirements for the evaluation of and reporting on participating operators, RSB-STD-70-003 [2011].

21

Interview with a representative of an environmental NGO (30/1/2013).

22 23

RSPO, Certification systems [2007], 4.2.4 b.

See for example RSPO, Rules on communications & claims [2011], 5.

24

National Research Council (USA) and Committee on Certification of Sustainable Products and Services, Certifiably sustainable? The role of third party certification systems (Washington, D.C.: National Academies Press, 2010), 6.

25

Schubert, R. and Blasch, J., “Sustainability standards for bioenergy--A means to reduce climate change risks?,” Energy Policy 38, no. 6 (2010) 2797-2805: 2799.

26

See for example ISCC, System basics for the certification of sustainable biomass and bioenergy, ISCC 201 [2011], 4.6; ISCC, Requirements for the logo use, ISCC 208 [2011]; 2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 1.7; RSB, Standard for participating operators, RSB-STD-30-001 [2011], 1.1.

27

See for example RSB, Consolidated RSB EU RED “identity of product preserved” chain of custody standard, RSB-STD-11-002-20-002 [2011], 3.3. RSB, Consolidated RSB EU RED “segregation of product” chain of custody standard, RSB-STD-11-001-20-003 [2010], 4.3. RSB, “Identity of product perserved” chain of custody standard, RSB-STD-20-002 [2011]; RSB, “Segregation of product” chain of custody standard, RSB-STD-20-003 [2011]. RSB, Consolidated RSB EU RED generic chain of custody standard, RSBSTD-11-001-20-001 [2010], 4.3. RSB, “Mass balance of product” chain of custody standard, RSB-STD 20-005 [2011].

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8.2 The requirements on certification bodies

The certification is undertaken by independent certification bodies that are accredited under the certification system. The definition of certification bodies is similar across different initiatives. As an example, certification bodies under the RSPO are third parties organised as legal persons28 that assess and certify the conformity of organisations with respect to published standards or other normative documents.29 The various initiatives establish a framework for the accreditation of certification bodies as well as their approval by the certification system itself. However, the requirements vary widely across the schemes, from primarily referring to ISO standards on the organisational structure, through defining management and documentation requirements, to more detailed additional requirements. All initiatives require certification bodies to be accredited by an independent accreditation body,30 in order to ascertain whether the certification body is competent to carry out the certification tasks under the certification system.31 However, the requirements on the accreditation body and its accreditation process differ considerably. The ISCC considers the recognition by a public authority to be equivalent.32 Under the FSC, accreditation has to be undertaken by Accreditation Services International (ASI).33 Others take a broader stance, requiring the accreditation body to be signatory to the International Accreditation Forum (IAF) Multilateral Recognition Arrangement (MLA) or a member of the International Social and Environmental Accreditation and Labelling Alliance (ISEAL).34 The audit of the certification body by the accreditation body under most schemes35 shall be conducted in compliance with the procedure under ISO

28

RSPO, Certification systems [2007], 3.1.

29 30

Ibid., 6.

See for example RSB, Requirements for the qualification of accreditation and certification body auditors performing evaluations to the RSB standards under the RSB certification systems, RSB-STD-70-002 [2011]; RSPO, Certification systems [2007], 3.4; Greenergy, Auditor requirements, AUD DOC – 004 [2010], 2.1; 2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 3; FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009], 8.

31

See for example RSPO, Certification systems [2007], 6.

32 33

ISCC, Requirements for certification bodies, ISCC 251 [2011], 4.4.1.

http://www.accreditation-services.com/ (24/2/2012).

34

RSPO, Certification systems [2007], 3.4; RSB, General requirements for certification bodies, RSBSTD-70-001 [2011], 1.3.

35

RSB, General requirements for accreditiation bodies – the application of ISO/IEC 17011:2004 (E), RSBSTD-75-001 [2011]; RSPO, Certification systems [2007], 3.4; ISCC, Requirements for certification bodies, ISCC 251 [2011], 4.4.1; 2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 3.

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17021,36 ISO 1701137 or equivalent.38 The accreditation to which the certification body shall be audited, i.e. the governance and procedures of the certification body, are also mainly determined by reference to ISO standards. Most initiatives39 refer to the ISO standards on product certification Guide 65, 40 ISO Guide 6641 and the auditing requirements of ISO 19011. 42 Moreover, some initiatives, notably the FSC and the RSB, make detailed additional requirements on the governance of certification systems. 43 Notably, the variety of requirements on accreditation bodies and their accreditation procedures is not sufficient to create harmonisation and thereby an even benchmark for certification bodies. The administrative process required for certification systems to be accepted under the certification schemes differs considerably. Considering the crucial role of the certification bodies in compliance assessment, this may lead to differences in the assessment outcomes. Some schemes, such as the RSB and the FSC, make detailed provisions on the acceptance of certification bodies. 44 Overall, it appears that most certification systems only undertake a cursory check of the accreditation process for certification bodies.

36

ISO, ISO 17021 – Conformity assessment – requirements for bodies providing audits and certifications of management systems [2011].

37

ISO, ISO 17011 – Conformity assessment – General requirements for accreditation bodies accrediting conformity assessment bodies [2004].

38

See for example Greenergy, Auditor requirements, AUD DOC – 004 [2010], 2.1.

39

RSPO, Certification systems [2007], , 3.2, 3.6; 2BSvs voluntary scheme, Verification process, 2BSvsPRO-02 [2011], 3; RSB, General requirements for certification bodies, RSB-STD-70-001 [2011], 1.1; FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009], 8.

40

ISO, ISO Guide 65 – General requirements for bodies operating product certification systems [1996]. Notably, the term product for the purpose of Guide 65 includes processes and services. The recurrence to this ISO standard does not mean that consignments of produce, but economic operators handling the charge are certified, as will be demonstrated in the following.

41

ISO, ISO Guide 66 – General requirements for bodies operating assessment and certification/registration of environmental management systems (EMS) [1999].

42 43

ISO, ISO 19011 – Guidelines for auditing management systems [2002].

FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009]; RSB, General requirements for accreditiation bodies – the application of ISO/ IEC 17011:2004 (E), RSB-STD-75-001 [2011].

44

RSB, Requirements for the qualification of accreditation and certification body auditors performing evaluations to the RSB standards under the RSB certification systems, RSB-STD-70-002 [2011]. RSB, Standard for participating operators, RSB-STD-30-001 [2011].

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Diagram 5: relationships in the certification process



8.3 Requirements on auditors

The requirements on auditors are also very varied across the different initiatives – perhaps even more so than the requirements on certification bodies. Like for certification bodies, reference is usually made to ISO 19011, but also ISAE 3000. 45 ISO 19011 contains procedural rules on the conduct of the audit as well as requirements on the expertise and competence of auditors. The standard has recently been reformed and is available in a 2011 version. 46 Considering the crucial role of auditors in the certification process, it would seem that the monitoring or evaluation of auditors by the certification bodies is crucial in ensuring independence and combating corruption. However, few schemes have such requirements. 47 Usually, requirements are limited to a more or less detailed description of the provisions on independence and skills required, making reference to ISO standards. The ISO standards correspond partly to those enumerated for the accreditation of certification bodies: training courses according to ISO 19011 or experience with the quality management systems according to ISO 900148 under the more superficial schemes such as 45

ISCC, System basics for the certification of sustainable biomass and bioenergy, ISCC 201 [2011], 4.4.3.

46 47

ISO, ISO 19011 – Guidelines for quality and/or environmental management systems auditing [2011].

An exception is the FSC, which has detailed requirements: FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009], 12.3, 12.4.

48

ISO, ISO 9001 – Quality management systems – requirements [2008].

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2BSvs, 49 otherwise only the environmental management system ISO 1400150 and the GHG emission standards ISO 14065, 14064-3. Notably, these requirements in some initiatives only apply to lead auditors.51 Rules are introduced in particular on ensuring the independence of auditors: the institutional affiliations, prior employments and procedures for dealing with conflicts of interests. However, experience will often be gained in the industry, making independence and expertise a difficult pair. Moreover, the competition between auditors (and certification bodies) provides an incentive to give a favourable audit. It is therefore questionable whether audits of this kind can ever be truly independent.52 Besides the reference to ISO standards, the level of detail for required skills of auditors differs considerably, with Greenergy and 2BSvs at the general end53 and RSB, RSPO, ISCC and FSC with the most detailed provisions.54 Under Greenergy, auditors have to be external, independent and have to document the skills for auditing in general and for the Greenergy scheme more specifically.55 Under 2BSvs, auditors have to demonstrate a sufficient level of knowledge, be formally approved for example to ISO 19011, have academic qualifications and professional experience as well as undergo training by the certification body. While reference to an ISO 19011 training course is common, few schemes make provisions on the qualifications of trainers.56 The FSC, RSB and RSPO require certification bodies to define minimum qualifications for auditors within the framework set by the certification system. For example, under the RSB, auditors must have a higher education level and at least five years’ professional experience in auditing, three years as an auditor and two years in product auditing in schemes similar to the RSB,57 lead auditors have to have university level education, hold an ISO 9001, 14001 or OHSAS 18001 certificate and pass a three-day training course, and have 5 years’ experience as an auditor, as well as three evaluations supervised by fully qualified lead auditors.58 49 50 51

2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 4.

ISO, ISO 14001 – Environmental management systems [2004].

RSB, Requirements for the qualification of accreditation and certification body auditors performing evaluations to the RSB standards under the RSB certification systems, RSB-STD-70-002 [2011], 1.7.

52

Shapiro, A., “Who pays the auditor calls the tune?: Auditing regulation and clients’ incentives,” Seton Hall Law Review 35, no. 3 (2005) 1030-1095.

53

See for example 2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 4.

54

See for example RSB, Requirements for the qualification of accreditation and certification body auditors performing evaluations to the RSB standards under the RSB certification systems, RSB-STD-70-002 [2011], 1.1; RSPO, Certification systems [2007], 4.1.1.

55

Greenergy, Auditor requirements, AUD DOC – 004 [2010], 2.2.

56

See for example RSB, Requirements for the qualification of accreditation and certification body auditors performing evaluations to the RSB standards under the RSB certification systems, RSB-STD-70-002 [2011], 1.3.

57

Ibid., 1.4.

58

Ibid., 1.2, 1.7.

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An interviewee from an environmental NGO expressed the view that requirements on independence and auditors were not high enough and more stringent access controls were necessary for the profession, considering their crucial role in assessing compliance with certification systems and thereby their impact in practice.59 Overall, the requirements on auditors seem insufficient, given their crucial role in the certification process.



8.4 The certification process and auditing

In the auditing process and operations are tested for their compliance with the certification system’s Principles and Criteria and chain of custody requirements, based on the indicators and verifiers defined by the certification system. Notably, three varieties of audits are usually considered, even though the terminology differs. Initial audits or certification audits investigate the conformity of the economic operator’s management system. Surveillance or verifying audits (which are sometimes called re-audits, but see below) take into account data supplied in product declarations in particular on the sustainability requirements under RED.60 Re-audits are undertaken for renewal of certification. In the following, the chronology of the process will be followed. While the first audit assesses whether to issue a certificate, verification audits assess whether the certificate can be upheld or reissued. ISO 19011, to which most schemes refer, sets out the basic stages of the auditing process:61 • Initiating audit (determination of team leader, objectives, scope, criteria, feasibility, audit team, initial contact); • Conducting document review (management system, documents and records assessed with respect to audit criteria); • Preparing for on-site audit activities (preparation of audit plan, assigning work to audit team, preparing work documents); • Conducting on-site audit activities (opening meeting, communication during the audit, roles and responsibilities of guides and observers, collecting and verifying information, generating audit findings, preparing audit conclusions, conduct closing meeting); • Preparing, approving and distributing the audit report; • Completing the audit; • Audit follow up. Again, the level of detail differs between the different initiatives, with Greenergy and 2BSvs overall making very general provisions and FSC and RSB at the other end of the scale. 59

Interview with a representative of an environmental NGO (30/1/2013).

60 61

Cl. 5.3, 4.2, 4.4 prEN16214-2:2010.

ISO, ISO 19011 – Guidelines for auditing management systems [2002], 6.2 to 6.8.

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Diagram 6: the certification process Prior to starting the certification process, the operator interested in certification has to seek consent of the certification system, ranging from a mere registration to a detailed participation agreement. Subsequently, the operator seeking certification contacts a certification body accredited by an independent accreditation body and approved under the certification system, and signs a certification agreement detailing the scope of the certification.62 Thereby, operators can build on existing contractual relationships with certification bodies in the context of other certification systems.63 Operators can only be certified after being audited. Audit planning is undertaken based on the information submitted by the operator, determining the audit type, team and extent of the audit and drafting an agenda for the audit.64 Under some schemes, a risk assessment is required in order to define scope and intensity of the audit, sometimes including a self-risk assessment.65 62

2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 1.1, 1.5; FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009], 16.1.

63

Interview with the manager of environmental affairs at the secretariat of a certification system (1/11/2011).

64

RSB, Requirements for the evaluation of and reporting on participating operators, RSB-STD-70-003 [2011], 2.1., RSB, Requirements for the evaluation of and reporting on participating operators, RSB-STD-70-003 [2011], 2.1; Greenergy, Auditor requirements, AUD DOC – 004 [2010], 2.2; 2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 1.1.

65

ISCC, Regulations to carry out audits, ISCC 252 [2011], 4; ISCC, Requirements for traceability, ISCC 203 [2011]; ISCC, Risk management, ISCC 207 [2011].

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Some schemes specify the composition of the auditing team, usually differentiating between lead auditors and the remainder of the evaluation team. For example, audit teams may need to consist of a lead auditor, an international auditor, a local auditor, a chain of custody or primary production auditor, and additional social and environmental experts, elements of which may be combined.66 Cultural knowledge and knowledge about reality of agriculture are important.67 The audit is usually conducted in a mix of field and desk audits.68 The level of certainty achieved in the audit, where expressed, has to provide a meaningful level of assurance.69 The scope and intensity of audits is specified at differing levels, with general schemes such as Greenergy and 2BSvs mainly making reference to ISO 19011. Detailed provisions are for example contained in the FSC70 and in the RSB.71 Not all schemes require all production sights to be audited, in particular where only the first gathering entity is certified (group certification). Only some schemes (such as the FSC) make specific provisions on stakeholder consultations.72 After the conduct of the audit, the economic operator is notified of the findings of the report and given the opportunity to address non-compliances (usually referred to as non-conformities), giving credit to the fact that certification systems operate as voluntary schemes. The actions taken are monitored and evaluated by the audit team.73 The type of non-compliances that prevent certification and the timeline for addressing non-compliance varies across the schemes, as does the terminology. Usually, non-compliance with critical or major nonconformities prevents the issue of a certificate.74 Minor non-conformities must 66

RSB, Requirements for the qualification of accreditation and certification body auditors performing evaluations to the RSB standards under the RSB certification systems, RSB-STD-70-002 [2011], 2.1; FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSCSTD-20-001 [2009], 16.2, Annex 2, 3.

67

Interview with a member of the technical committee of a certification system (29/2/2012).

68

Greenergy, Auditor requirements, AUD DOC – 004 [2010], 2.2.

69 70

ISCC, Requirements for certification bodies, ISCC 251 [2011], 4.1.2.1.

FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009], 17.2; FSC, Accreditation standard for chain of custody evaluations, FSCSTD-20-011 [2007]; FSC, Standard for evaluation of FSC controlled wood in forest management enterprises, FSC-STD-20-012 [2007].

71

RSB, Requirements for the evaluation of and reporting on participating operators, RSB-STD-70-003 [2011].

72

FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009], 17.2; FSC, Accreditation standard for chain of custody evaluations, FSCSTD-20-011 [2007]; FSC, Standard for evaluation of FSC controlled wood in forest management enterprises, FSC-STD-20-012 [2007].

73

RSB, Requirements for the evaluation of and reporting on participating operators, RSB-STD-70-003 [2011], 4.1.

74

See for example FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009], 19.3; SAN/Rainforest Alliance, Farm certification policy [2009], II; 2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 1.1.

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usually be addressed before the next surveillance audit,75 or will otherwise be upgraded to major non-conformities.76 Based on a favourable audit report, the certification body (or sometimes a specific decision-making entity) takes a decision on the certification of the operator. The validity of certificates is closely linked to the conduct of successful surveillance audits. Under most schemes, certificates are valid for up to five years for the principles and criteria, subject to annual surveillance audits.77 Different rules apply for chain of custody standards. For example, under the RSPO, certificates for the supply chain are valid for 3 years with annual surveillance if the volume processed is less than 500 tons per year, or for one year if production exceeds 500 tons per year.78 Once a certificate has been issued, follow-up audits are to be undertaken, referred to as re-audits (CEN), surveillance audits (ISCC) or verification audits (RSB), which typically occur annually.79 Surveillance audits are undertaken retrospectively for the previous year, and thus include documentation on compliance claims.80 However, their intensity is reduced compared to the full certification audits, even though the scope is not always defined in detail.81 Most schemes require another full certification audit before the expiry of a valid certificate.82



8.5 Analysis

The schemes developed for recognition by the Commission show a lower level of regulation on the certification process, only making very general requirements on audits and the governance of certification bodies 75

2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 1.4.

76

RSB, Requirements for the evaluation of and reporting on participating operators, RSB-STD-70-003 [2011]; RSPO, Certification systems [2007]; FSC, Forest management evaluations, FSC-STD-20-007 [2009], 7.3, 7.4.

77

FSC, Forest management evaluations, FSC-STD-20-007 [2009], 7.8; FSC, Standard for evaluation of FSC controlled wood in forest management enterprises, FSC-STD-20-012 [2007]; 2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 1.8, 1.9.

78

RSPO, Certification systems [2007].:4.2.6.

RSPO, Supply chain certification systems [2011], 4.10.1.

79

2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011], 1.3, 1.8; FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009], 20.1; RSPO, Certification systems [2007], 4.2.7, 4.3.5. Greenergy, System description, SYS DOC – 01 [2010], 4.1, 4.2.

80 81

RSPO, Certification systems [2007], 4.3.5, 4.6.1.

An example is FSC, General requirements for FSC accredited certification bodies – application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009], 20.1. More general RSPO, Certification systems [2007], 4.3.5, 4.6.1.

82

See for example FSC, Forest management evaluations, FSC-STD-20-007 [2009], 9.7; FSC, Accreditation standard for chain of custody evaluations, FSC-STD-20-011 [2007], part III, part IV.

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overall. The schemes already in existence prior to the drafting of RED in many respects go considerably further, introducing safeguards for certification of operators coinciding with product claims, introducing detailed procedural rules for auditing, on independent decision making, dispute resolution or stakeholder participation. Thus, there is evidence that certification systems are being developed to comply with, but not to exceed, the minimum requirements set for Commission recognition. Thereby, there is competitive pressure between high– and low–level standards, which are recognised as equivalent for the purpose of RED, but in fact demand significantly different levels of environmental and socio-economic protection. Accordingly, the representative of a certification body expressed the view that the requirements and complex checklists of one high-level scheme made the auditing complex and costly, and thus less attractive than other competing schemes.83



8.5.1 The impact of the recognition process

The level of regulation achieved by these voluntary certification schemes shows that there is a great potential for self-regulation. Nonetheless, the procedural requirements in the certification process are insufficient. The broad framework set by the ISO 19011 standard and the provisions by certification systems currently are not sufficient to ensure a coherent quality of the audits.84 Thus, even where the same certification system is applied, the quality of the audit may differ considerably. Accordingly, certifications and consequently product claims are not readily comparable. The weaknesses of the certification process show that the processes introduced by certification systems to generate input and output legitimacy through scientific expertise, equal representation of stakeholders or procedural safeguards do not lead to an ideal solution to the issues surrounding bioenergy. At present, certification systems are used to support state and international law, for example under Art. 18 (4) RED for efficiency gains, or to reinforce national standards in countries with low environmental protection and low public governance. However, this relationship can also work in the other direction: state regulation can be used to reinforce certification systems. Thereby, formal and informal law interact in both directions. This also alters the character of the certification systems: voluntary certification systems that are based on the notion of self-regulation, creating market incentives for good environmental management now have to fit into hard regulatory regimes.85 Notably, it appears that the recognition mechanism dramatically increased the interest of economic 83

Interview with a representative of a certification body (21/11/2011).

84 85

Interview with a representative of a certification body (21/11/2011).

Matus, K. “Assessing challenges for implementation of biofuels sustainability criteria – Workshop report.” Washington: UNEP, Inter-American Development Bank, 2010, 4.

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operators in gaining certification.86 In this context, state law or public authority control can provide a framework to help manage the increased demand for certification that it has created, and at the same time can increase the stringency of certification systems where their self-regulatory potential cannot be fully realised. Command and control instruments can be recurred to where the incentive of economic benefits from certification is insufficient to drive self-regulation. Public regulation can create universally applicable standards, which can be reinforced with sanctions, overcoming market failures and limiting free riding.87 However, it is questionable whether the mechanism for Commission recognition introduced based on Art. 18 (4) RED fits this profile. Notably, no morestringent rules on independence and skills of auditors are introduced. One of the distinct advantages of public regulation, that it is easier to introduce sanctions, is not exploited. It remains possible that available sanctions, such as the loss of certification, may be applied more stringently when the state law backing means that system may risk the loss of recognition, although no evidence exists yet. The conditions on the conformity assessment for Commission recognition are low: only the auditing itself is addressed. The Commission makes no assessment of the governance structure of certification systems and certification bodies, which is important both for the drafting of standards as well as for compliance with them. Accordingly, the requirements for Commission recognition paint only a very incomplete picture. Even on auditing, the requirements fall behind those established under high-level standards. The recognition does not strengthen high-level standards, thereby missing an opportunity to increase the level of environmental and/or socio-economic protection.88 It is questionable whether low-level harmonised standards are preferable to no harmonised standards. Overall, the improvements in conformity with voluntary certification schemes through the recognition process are limited. They increase rather than alleviate the pressure on high-level systems in competition with baseline standards. It seems that the sustainability criteria were not drafted based on the level already achieved in transnational law. Instead, the referral to voluntary certification schemes could have rather pragmatic reasons: the recurrence to third party certification allows for a flexible mechanism applicable beyond national or even European borders.

86

Interview with the manager of environmental affairs at the secretariat of a certification system (1/11/2011); Interview with a member of the technical committee of a certification system (29/2/2012); Interview with a representative of an environmental NGO (30/1/2013).

87

On the advantages of binding and voluntary regulation, see for example Feige, A., Mey, F., and Fleckenstein, M. “Ein Standard für die Standards – Nachhaltigkeitsstandards für Agrarrohstoffe.” Berlin, Bonn: WWF, Meo Carbon, 2012, 54.

88

Ibid., 35.

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8.5.2 Conformity assessment v. impact of certification systems

Compliance with the certification systems standards does not necessarily demonstrate a real contribution to achieving the aim of the certification system, or even biodiversity protection or climate change mitigation in general. Notably, the audit only assesses the compliance with the principles and criteria. Where only management practices are required, the audit assesses if these practices are implemented, but not if they have an impact on achieving the objectives of the certification system. Accordingly, the question is to what extent certification systems and conformity requirements are just creating administrative procedures and burdens, rather than making a difference in practice. The success of certification systems in the bioenergy sector is difficult to measure, since many standards have only been operational for a few years. It is currently unclear whether the RSPO, a multi-stakeholder initiative with strong industrial focus, has had a positive impact on national standards.89 Due to largescale non-compliance, the RSPO has been criticised as “green-wash”, enabling deforestation in the guise of defined but ineffective criteria.90 In the forestry sector, a broad range of issues have been identified: the impact of forest certification on biodiversity is difficult to measure91 as independent, rigorous and comprehensive information – beyond case studies – is lacking;92 evidence suggests that certification is most successful where a state governance framework guarantees the enforcement of forestry law.93 Nonetheless, certification in the forestry sector has been found to contribute indirectly to sustainable management standards by reaching an agreement on good practice,

89

McCarthy, J. and Zen, Z., “Regulating the oil palm boom: assessing the effectiveness of environmental governance approaches to agro-industrial pollution in Indonesia,” Law & Pol’y 32, no. 1 (2010) 153-179: 169.

90

Maitar, B. “Biofuels and palm oil: why palm oil cannot fuel the biofuels industry.” ELTI biofuels conference 2009. Environmental Leadership and Training Initiative, Balboa, Panama, 2009. Despite these criticisms, it has nonetheless been recognised since the time of writing in an EU version, which differs from the generic version only on GHG emissions Commission, Implementing decision 2012/722/EU on recognition of the Roundtable on Sustainable Palm Oil RED scheme for demonstrating compliance with thte sustainability criteria under Directives 98/70/EC and 2009/28/EC, OJ [2012] L 326/53.

91

Kuijk, M., Putz, F. E., and Zagt, R. “Effects of forest certification on biodiversity.” Wageningen: Trobenpos International, 2009.

92

Kaechele, K. et al. “Forest certification: a voluntary instrument for environmental governance.” In Environmental governance: approaches, imperatives and methods, edited by Bandyopadhyay, J., Chopra, K., and Ghosh, N., 162-174. New Dehli: MacMillan, 2011.

93

Ebeling, J. and Yasué, M., “The effectiveness of market-based conservation in the tropics: forest certification in Ecuador and Bolivia,” J. Environ. Manage. 90, no. 2 (2009) 1145-1153; Guénéau, S. and Tozzi, P., “Towards the privatisation of global forest governance?,” International Forestry Review 10, no. 3 (2008) 550-562.

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which is then fed into national legislation.94 Where public capacities are not yet available, certification systems have sometimes been found to produce more credible and effective governance structures, but at the risk of legitimizing existing practices where standards are low or are not enforced.95 However, no studies currently exist that assess the impact of certification systems on improving environmental performance among certified operators. The WWF has just initiated a project on assessing the impact of certification, which is still in its early stages.96 Accordingly, judgment of the practical effect of these certification systems cannot yet be passed. At the very least, the recognition mechanism under RED and the national implementations have increased awareness and opened a dialogue on certification systems, which may contribute to their improvement.

94

McDermott, C. L., Noah, E., and Cashore, B., “Differences that ‘matter’? A framework for comparing environmental certification standards and government policies,” Journal of Environmental Policy & Planning 10, no. 1 (2007) 47-70.

95

Cashore, B. et al., “Private or self-regulation? A comparative study of forest certification choices in Canada, the United States and Germany,” Forest Policy Econ. 7, no. 1 (2005) 53-69.

96

Interview with a representative of an environmental NGO (30/1/2013).

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Compliance with Higher Ranking Law

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compliance with european law

The sustainability criteria established by Art. 17 to 19 RED and implemented by the Member States must comply with higher-ranking law, both at European and international level. In European law, two aspects of compliance must be addressed. Firstly, compliance with European law formally requires the existence of a legal basis. According to the principle of subsidiarity, the European Union may only act if a legal basis has been explicitly conferred by European primary legislation, in particular the TFEU, and the conditions of the legal basis must be fulfilled. Secondly, how the sustainability criteria fit into the requirements on environmental standards beyond the legal basis must also be considered. Here, the focus lies on whether the standard of protection awarded by the sustainability criteria is sufficient in order to comply with European requirements for a high standard of environmental protection. Thus, European law provisions provide a “floor” – a minimum permissible standard for European regulation. In the same way as European law, international law can be used to define a floor for the sustainability criteria: the requirements of the Ramsar Convention, the Convention on Biodiversity and the Kyoto Protocol are relevant. On the other hand, international trade law sets out boundaries for EU regulation at the top end, providing a “ceiling” for the criteria. In particular, the classical conflict between environmental protection and the freedom of trade will be addressed.

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compliance with european law

The Renewable Energy Directive, including its sustainability criteria, has to be put in the context of primary law, notably the TFEU. Formally, the sustainability criteria have to be based on one of the explicit competences conferred to the EU by the TFEU, following the principle of conferral.1 Substantially, the TFEU provides a framework for the sustainability criteria, establishing a minimum and a maximum level. The maximum level is determined by provisions aimed at ensuring the fundamental freedoms within the internal market. The establishment of this internal market is one of the prime objectives of the European Union (Art. 3 (3) subpara. 1 TEU, Art. 26 TFEU). One of the instruments in establishing the internal market is the state aid regime under Art. 107 to 109 TFEU. However, it is questionable whether the state aid regime is a suitable measure for the sustainability criteria. The substantial exclusions of biodiverse areas and carbon sinks and the requirements on a certain GHG emission balance certainly do not constitute a state aid according to Art. 107 (1) TFEU; they are merely linked to financial support mechanisms that could potentially qualify as state aid. Even if this were considered sufficient, the sustainability criteria explicitly only apply to renewable energy obligations and financial support for the consumption of renewable energy, which cannot be considered subsidies according to Art. 107 (1) TFEU either (see above, section 2.2.2). Where Member States draft their support schemes in a way that would be considered subsidies, and combine them with requirements on compliance with the sustainability criteria – for example in order to achieve their national renewable energy targets according to Art. 3 (1), (4) RED, this national measure would have to be scrutinised against Art. 107 (1) TFEU – but the sustainability criteria as contained in Art. 17 to 19 RED would not. Moreover, in drafting secondary legislation, the EU institutions are also bound to the fundamental freedoms – the free movement of goods (Art. 29, 34 to 36 TFEU), workers (Art. 45 to 48 TFEU), the freedom of installation (Art. 49 to 55 TFEU) and the free movement of services (Art. 56 to 63 TFEU) and capital (Art. 63 to 66 TFEU).2 The EU institutions are bound to the fundamental freedoms in the TFEU through the legislative competence for the harmonisation of the internal market (Art. 114 TFEU). Where a harmonisation measure is compliant with Art. 114 TFEU, it can be considered compliant with the obligation of the EU institutions to the fundamental freedoms, tying the substance of the secondary legislation back to the formal requirement for a legal basis. Accordingly, after establishing whether the sustainability criteria were based on the correct legal basis, the focus will be on the question of whether the TFEU sets a minimum level for the sustainability criteria, notably through the requirements of the legal basis, and if this level has been observed. Moreover, the options for Member States to go beyond such a European minimum level will be considered. 1

Art. 5 (2) TEU, ex. Art. 5 (2) TEC. See Craig, P. P., EU administrative law, 2nd ed. (Oxford: Oxford University Press, 2012), 368.

2

ECJ, joint cases 80/77 and 81/77 (Ramel) [1978] ECR ECJ 927; ECJ, 37/82 (Rewe) [1984] ECR 1229, para. 18; ECJ, C-284/95 (Safety Hi-Tech) [1998] ECR I-4301, para. 63.

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9.1 The legal basis

The European Union – both in its current form and its form at the time of the passing of the Renewable Energy Directive (the European Community) – can only act insofar as sovereignty has been transferred to them by the Member States (there is no so-called competence-competence). The EU is only competent to act where competences have been explicitly conferred by the Treaties3 and subject to subsidiarity4 – vertically defining the competences of EU and Member States. Where no competences have been conferred onto the EU, the Member States preserve their exclusive competence to regulate (Art. 4 (1) TEU).



9.1.1 The potential legal bases

When RED was passed under the Treaty of Nice, the sustainability criteria could fall within the ambit of the environmental competence (Art. 175 TEC) or the competence on the harmonisation of the internal market (Art. 95 TEC). While the Commission proposal suggested a double legal basis,5 the Renewable Energy Directive has been based on Art. 175 (1) TEC, except for the sustainability criteria (Art. 17 to 19 RED), which are based on Art. 95 TEC.6 Both provisions have been incorporated into the Treaty of Lisbon without changes of content at Art. 192 and Art. 114 TFEU respectively. For simplicity, only the numbering of the Treaty of Lisbon, not the Treaty of Nice, will be referred to in future. Notably, the sustainability criteria do not fall under the new (under Lisbon) title XXI “energy”, Art. 194 TFEU, which addresses the expansion of renewable energy (Art. 194 (1) (c) TFEU). Art. 194 (2) TFEU awards the EU the competence to legislate under the ordinary procedure on the objectives enumerated in Art. 194 (1) TFEU: the development of renewable energy obviously counts as promotion of renewable sources of energy (Art. 194 (1) (c) TFEU). However, the sustainability criteria as described do not further the expansion of biofuels and other bioliquids, but instead seek to limit their production. The same goes for ensuring energy security (Art. 194 (1) (b) TFEU). Accordingly, the decision on the legal basis would not be different if the Directive had been enacted under the Treaty of Lisbon. 3

Art. 5 (2) TEU, ex. Art. 5 (2) TEC.

4 5

Art. 5 (1) 2; (3) TEU, ex. Art. 5 (3) TEC.

Commission, Proposal for a Directive on the promotion of the use of energy from renewable sources, COM [2008] 19 final.

6

The change is already contained in the parliamentary opinion after the first reading, as agreed in the trilogue negotiations. European Parliament, Position adopted at first reading on 17 December 2008 with a view to the adoption of Directive 2009/.../EC on the promotion of the use of energy from renewable sources, EP-PE_TC1-COD [2008] 0016.

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9.1.1.1 The environmental competence

Art. 192 TFEU confers the competence to enact measures pursuing environmental objectives (Art. 191 TFEU). The term “environment” is not defined, but Art. 192 TFEU can serve as legal basis for measures furthering one of the enumerated environmental objectives (Art. 191 (1) en-dent 1 to 4 TFEU). The sustainability criteria, introducing qualitative limits for bioenergy, contribute to preserving, protecting and improving the quality of the environment. They can also be seen as a means to utilise natural resources, in particular biodiversity. Thus, the sustainability criteria generally fall under the ambit of Art. 192 TFEU. It has to be stressed that the reporting requirements on socioeconomic issues (Art. 17 (7) RED) could not have been based on Art. 192 TFEU. Nonetheless, the legal basis for the environmental criteria, and a potential separation of different elements of the sustainability criteria has to be considered. The majority of the provisions of RED, including the sustainability criteria, are concerned with the expansion of renewable energy for climate change mitigation: the criteria are designed to ensure the environmental integrity of the promotion of bioenergy, introducing requirements for biodiversity protection and the GHG emission balance, thus limiting one environmental measure in order to not damage other environmental criteria. Accordingly, the environmental competence appears to be a suitable legal basis. Art. 192 TFEU allows for two different procedures. Measures based on Art. 191 (1) TFEU are passed according to the ordinary procedure (Art. 261 TFEU, then co-decision procedure, Art. 251 TEC), unless the conditions of Art. 191 (2) TFEU are fulfilled, requiring a unanimous decision by the Council. In this case, the Directive and its sustainability criteria could affect the choice of energy sources of the Member States (Art. 192 (2) (c) TFEU). However, prior to the passing of RED, all Member States were already using renewable energy and were planning to increase their share of energy from renewable sources, in some cases with consideration of environmental side effects. Thus, the general structure of the national energy supply is not affected.7 Accordingly, the potential legal basis would be Art. 192 (1) TFEU rather than Art. 192 (2) TFEU. However, Art. 114 TFEU could also qualify as potential legal basis.



9.1.1.2 Harmonisation of the Internal Market

Art. 114 TFEU confers to the EU the competence to enact measures facilitating the internal market (Art. 26 TFEU),8 including the free movement of goods (Art. 34 TFEU), which would include biofuels and bioliquids. However, despite its broad frame, Art. 114 TFEU cannot be understood as a gen7

Commission, Proposal for a Directive on the promotion of the use of energy from renewable sources, COM [2008] 19 final, 9.

8

ECJ, C-376/98 (Germany v. European Parliament and Council) [2000] ECR I-8419, para. 83-84, 86-88. Notably, that directive was annulled as the conditions of Art. 144 TFEU were not fulfilled.

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eral harmonisation competence. The object of the measure has to be to expunge obstacles for the establishment and functioning of the internal market. Obstacles may be constituted by current or likely future heterogeneous national legislation.9 However, mere disparities between national rules or an abstract risk of obstacles to fundamental freedoms are not sufficient:10 a distortion of competition must be appreciable.11 Rules limiting free trade facilitate the internal market where national rules on the designation, composition and production movement differ and thus inhibit the free movement of goods.12 The environmental side effects of bioenergy have moved into the public eye, with Member States starting to legislate on the issue, such as the reporting requirement under the United Kingdom Renewable Fuel Transport Obligation (RTFO).13 Germany was already preparing ordinances at the time of the drafting of the RED.14 The different focal points lead to different requirements and thus present an obstacle to trade. Moreover, besides diverging measures, the growing public awareness of problems and the correlating behavioural changes can also be considered an obstacle.15 Recital 94 RED states that the sustainability criteria shall remove obstacles to the internal market through harmonisation of standards for biofuels and bioliquids for the purposes of the renewable energy target (Art. 3 (1) RED). This objective is also apparent in the restrictive provisions for more stringent national criteria (Art. 17 (8) RED). Accordingly, Art. 114 TFEU can also be considered a suitable basis for the sustainability criteria.



9.1.2 The choice of legal basis

Art. 114 TFEU and Art. 192 TFEU differ in many procedural aspects, notably the voting quorum in the Council, the participatory rights of parliament and the national escape clauses, making a differentiation crucial. 9

ECJ, C-350/92 (Spain v. Council) [1995] ECR I-1985, 35; ECJ, C-491/01 (British American Tobacco) [2002] ECR I-11453, para. 61; ECJ, C-434/02 (Arnold André) [2004] ECR I-11825, para. 31.

10 11

ECJ, C-376/98 (Germany v. European Parliament and Council) [2000] ECR I-8419, 84.

Ibid., para. 83, 84, 107.

12

ECJ, C-491/01 (British American Tobacco) [2002] ECR I-11453, para. 70. (While this is standing case law by the ECJ, it has to be noted that in a case where secondary legislation allowed members to prohibit generally or partially shipments of waste, the measure was held to limit rather than further trade and thus the internal market, so that the measure was to be based on Art 192 rather than Art. 114 TFEU. ECJ, C-187/93 (European Parliament v. Council) [1994] ECR I-2857, para. 22-28.

13

 R enewable Transport Fuel Obligations Order 2007, SI 2007 n. 2072 [2007]; Dehue, B. et al. “Sustainability reporting within the RTFO.” Utrecht: Ecofys, 2007.

14

Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit (BMU), Entwurf über eine Verordnung über Anforderungen an eine nachhaltige Herstellung von flüssiger Biomasse zur Stromerzeugung [2009].

15

ECJ, C-434/02 (Arnold André) [2004] ECR I-11825, para. 34, 40. see also ECJ, C-491/01 (British American Tobacco) [2002] ECR I-11453, para. 67.

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According to Art. 114 (1), Art. 192 (1), TFEU a qualified majority in the Council is sufficient, whereas Art. 192 (2) TFEU contains some exceptions where unanimity in the Council is required. Notably, for environmental measures, the Council is made up of the environmental ministers, but not under Art. 114 TFEU (see Art. 16 (2) TEU). Unlike for Art. 114 (1), 192 (1) TFEU, legislative acts under Art. 192 (2) TFEU are not passed in the ordinary legislative procedure according to Art. 294 TFEU, but only considering the opinion of the European Parliament. Unlike in Art. 114 TFEU, Art. 192 requires the participation of the Committee of Regions. Moreover, Art. 114 (4) to (7) TFEU contain different conditions for diverging national law to Art. 193 TFEU. With conditions for both legal bases fulfilled, the choice of legal basis depends on the relationship between the two.



9.1.2.1 The relationship between Art. 114 TFEU and Art. 192 TFEU

Art. 192 TFEU could be considered lex specialis to Art. 114 TFEU on environmental matters.16 The speciality is suggested by the formulation “without prejudice to Art. 114 TFEU” in Art. 192 (2) TFEU (not contained in Art. 192 (1) TFEU). Without speciality, Art. 114 TFEU could be used to circumvent the unanimity requirement under Art. 192 (2) TFEU. However, it does not seem logical that Art. 192 (2) TFEU shall be lex specialis, while Art. 192 (1) TFEU, also addressing environmental issues, shall not. Furthermore, the scope of application of Art. 192 TFEU could be vast, as any EU measure has some impact on the environment. Also, the high level of protection of the environment required under Art. 114 (3) TFEU would be obsolete if all environmental matters were to be regulated under Art. 192 TFEU. Finally, the exclusion of environmental matters from other legal bases contradicts the integration principle (Art. 11 TFEU), which requires that “environmental protection requirements must be integrated into the definition and implementation of [EU] policies and activities, in particular with a view to promoting sustainable development”. While Art. 192 TFEU is therefore not lex specialis to Art. 114 TFEU, it can also not be considered to be generally subsidiary. While harmonisation measures touching on the environment usually also affect the fundamental freedoms that Art. 114 TFEU seeks to harmonise, such a reading would marginalise Art. 192 TFEU. Instead, both legal bases cover overlapping competences.17

16

So the Commission in ECJ, C-300/89 (Commission v. Council; Titanium Dioxide) [1991] ECR I-2867, para. 7 foll.

17

Implied in Ibid., para. 16. where the ECJ does not distinguish the periphery of each competence; however, Art. 192 TFEU was eventually held the wrong legal basis.

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9.1.2.2 The main object

According to ECJ jurisprudence, the legal basis is to be determined according to the main object of the measure (objet principal).18 The legal basis is not to be defined subjectively, but based on objective factors19 including the aim and the content of the measure, which are amenable to judicial review.20 Accordingly, the ECJ is not bound by the opinion of an institution on the suitable legal basis. If one objective is identifiable as main or predominant, the act must be based on a single legal basis.21 In the case of the sustainability criteria, reasonable arguments can be brought forward for both legal bases. The ECJ allows considerable discretion to the legislative bodies, effectively diverging from the doctrine of the main object. In the context of health measures (Art. 152 TEC, now Art. 168 TFEU), the ECJ has held that where the conditions of Art. 114 TFEU are fulfilled, as in this case, a measure can be based on it even where it also pursues another object, even where this is a decisive factor.22 The availability of a legal basis concerning the secondary object does not exclude the application of Art. 114 TFEU.23 This is supported by the requirement under Art. 114 (3) TFEU to take into account concerns beyond the facilitation of the internal market – including environmental concerns.24 Thus, the sustainability criteria could lawfully be based on Art. 114 TFEU. 18

ECJ, C-377/98 (The Netherlands v. European Parliament and Council) [2001] ECR I-7079, para. 27-28. The ECJ also uses the term main or predominant purpose or component, suggesting a subjective component. However, the objective test has been upheld. ECJ, C-178/03 (Commission v. European Parliament and Council) [2006] ECR I-107, para. 42; ECJ, C-411/06 (Commission v. European Parliament and Council) [2009] ECR I-7585, para. 46.

19

ECJ, C-300/89 (Commission v. Council; Titanium Dioxide) [1991] ECR I-2867, para. 10; ECJ, C-178/03 (Commission v. European Parliament and Council) [2006] ECR I-107, para. 41.

20

ECJ, C-300/89 (Commission v. Council; Titanium Dioxide) [1991] ECR I-2867, para. 10; ECJ, C-271/94 (European Parliament v. Council) [1996] ECR I-1689, para. 14; ECJ, C-36/98 (Spain v. Council) [2001] ECR I-779, para. 58.

21

see ECJ, C-36/98 (Spain v. Council) [2001] ECR I-779, para. 59; ECJ, C-178/03 (Commission v. European Parliament and Council) [2006] ECR I-107, para. 42; ECJ, C-155/07 (European Parliament v. Council) [2008] ECR I-8103, para. 35.

22

ECJ, C-376/98 (Germany v. European Parliament and Council) [2000] ECR I-8419, para. 83, 88; ECJ, C-377/98 (The Netherlands v. European Parliament and Council) [2001] ECR I-7079, para. 27-28; ECJ, C-380/03 (Germany v. European Parliament and Council) [2006] ECR I-11573, para. 92.

23

ECJ, C-376/98 (Germany v. European Parliament and Council) [2000] ECR I-8419, para. 88; ECJ, C-377/98 (The Netherlands v. European Parliament and Council) [2001] ECR I-7079, para. 27-28; ECJ, C-491/01 (British American Tobacco) [2002] ECR I-11453, para. 93-94.

24

ECJ, C-491/01 (British American Tobacco) [2002] ECR I-11453, para. 62; ECJ, C-434/02 (Arnold André) [2004] ECR I-11825, para. 32; ECJ, Joined cases C-154/04 and C-155/04 (Alliance for Natural Health) [2005] ECR I-6451, para. 31.

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9.1.2.3 A double legal basis

However, given the strong environmental component of Art. 17 to 19 RED, a double legal basis might have been required, as suggested in the Commission proposal.25 Exceptionally, multiple legal bases can be chosen where objectives are pursued simultaneously, are of equal importance and are inseparably linked.26 However, a double legal basis is only permissible where the legislative procedures are not contradictory, in particular concerning the participation of the European Parliament.27 As detailed in the introduction to this section, this is not the case for Art. 114 and 192 TFEU. Measures based on Art. 114 TFEU and 175 (1) TFEU are enacted under the co-decision, now ordinary procedure, but measures based on Art. 192 (2) TFEU are not. Even if the option of different procedures is considered innocuous, the conditions under which Member States may enact diverging national measures differ considerably between Art. 114 (4) to (6) TFEU and Art. 193 TFEU. Thus, a double legal basis could not be chosen in this case. In conclusion, Art. 114 TFEU was a suitable legal basis and, on socioeconomic concerns, the only suitable legal basis.



9.1.3 Subsidiarity and proportionality

Art. 114 TFEU does not confer the EU an exclusive competence, but a shared competence.28 Competences shared between the EU and Member States are subject to the principles of subsidiarity and proportionality (Art. 5 (1) 2 TEU), detailed in the Protocol on the application of the principles 25

In its proposal, the Commission considered the facilitation of the internal market as the primary objective, as Member States would be prevented from adopting national measures that would obstruct the trade in biofuels, other bioliquids and their raw materials. According to the Commission proposal, the fact that the provisions in question also contribute to environmental protection is not an obstacle, as Art. 114 (3) TFEU provides for a high level of protection. Admittedly, this does not sound like a double legal basis, but like a split legal basis.

26

ECJ, C-155/91 (Commission v. Council) [1993] ECR I-939, para. 19, 21; ECJ, C-36/98 (Spain v. Council) [2001] ECR I-779, para. 59; ECJ, C-281/01 (Commission v. Council; Energy Star) [2002] ECR I-12049, para. 35.

27

ECJ, C-300/89 (Commission v. Council; Titanium Dioxide) [1991] ECR I-2867, para. 17-21; ECJ, Joined cases C-164/97 and C-165/97 (European Parliament v. Council) [1999] ECR I-1139, para. 14; ECJ, C-178/03 (Commission v. European Parliament and Council) [2006] ECR I-107, para. 57.

28

See Art. 4 (2) (a) TFEU. An exclusive competence of the EU contradicts the objective of harmonisation to avoid obstacles for the internal markets through the approximation of national legal orders. ECJ, C-491/01 (British American Tobacco) [2002] ECR I-11453, para. 179. Notably, Art. 114 TFEU cannot be placed under the exclusive competence for competition rules under Art. 3 (1) (b) TFEU. See also Kahl, W. “Art. 114 AEUV.” In Das Verfassungsrecht der Europäischen Union, edited by Calliess, C. and Ruffert, M., 4th ed. Munich: Beck, 2011, 12.

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of subsidiarity and proportionality annexed to the Treaty.29 According to the principle of subsidiarity, the EU shall take action “only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore by reason of the scale or effects of the proposed action, be better achieved by the Community” (comparative efficiency, Art. 5 (3) TEU).30 Recital 96 RED stresses that the European renewable energy targets cannot be achieved by the Member States individually. While the sustainability criteria are not explicitly addressed, a European measure is considered more suitable to address environmental side effects and avoid the diversion of trade streams between different Member States. In any case, the ECJ grants a wide margin of appreciation to the EU institutions.31 Control by national parliaments, as stipulated by Art. 5 (3) 3 TEU, was not yet required under Art. 5 (3) TEC. Moreover, EU measures “shall not exceed what is necessary to achieve the objectives of the Treaty” (proportionality test, Art. 5 (4) TEU).32 However, the standard of judicial review is limited. Once the Council deems it necessary to improve the existing level of protection, the achievement of that objective necessarily presupposes EU–wide action,33 as has been the case for the sustainability criteria (see above, section 1.1.3). Accordingly, subsidiarity and proportionality can be considered observed. Pragmatically, even if conditions for the legal basis were not fulfilled, the time allowed for the action for annulment (two months after publication, Art. 263 (6) TFEU) has now expired.



9.1.4 Conclusion

The sustainability criteria were lawfully based on the competence for the harmonisation of the internal market (Art. 114 TFEU). Thus, the sustainability criteria, regulating the trade in certain goods, are placed in the same forum as the goods traded, rather than in the environmental realm, where the national support schemes have been located. The discussion on the legal 29

Among others, the protocol requires the Commission to include an explanatory memorandum and a justification of the measure (para. 4, 5, 9). The same requirements apply for amendments by Council and European Parliament (para. 11).

30

Under the Treaty of Lisbon, the subsidiarity principle now only applies where the EU does not have an exclusive competence, which includes the common commercial policy (Art. 3 (1) e) TFEU).

31

ECJ, C-377/98 (The Netherlands v. European Parliament and Council) [2001] ECR I-7079, para. 32; ECJ, C-491/01 (British American Tobacco) [2002] ECR I-11453, para. 180 foll; ECJ, C-58/08 (Vodafone) [2010] ECR I-4999, para. 76 foll.

32

Craig, P. P. and de Búrca, G., EU Law – Text, Cases, and Materials, 4th ed. (Oxford: Oxford University Press, 2008), 103., see also the Protocol on subsidiarity.

33

ECJ, C-84/94 (United Kingdom v. Council) [1996] ECR I-5755, para. 46-47, 55; ECJ, Joined cases C-154/04 and C-155/04 (Alliance for Natural Health) [2005] ECR I-6451, para. 99-108; ECJ, C-103/01 (Commission v. Germany) [2003] ECR I-5369, para. 46-47.

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basis reflects the diverging interests at stake surrounding bioenergy: free trade and conflicting environmental concerns.



9.2 A high level of environmental protection

In the previous section, the formal requirement for a legal basis under the TFEU was discussed. This section addresses the question of whether the requirements of this legal basis have been fulfilled. According to Art. 114 (3) TFEU, the Commission is held to a high level of environmental protection in its proposals, which European Parliament and Council seek to achieve this same objective. Thereby, Art. 114 (3) TFEU translates the primary concern of environmental protection (see Art. 3 (3) TEU, Art. 11 TFEU and the title “environment” in Art. 191 foll. TFEU) into an obligation. According to Art. 3 (3) TEU, the EU shall work for “a high level of protection and improvement of the quality of the environment”.34 This general objective of the EU affects legislative sectors beyond environmental law through the integration principle (Art. 11 TFEU). According to Art. 114 (3) TFEU, the EU institutions (but not the Member States)35 are held to a high level of environmental protection when enacting secondary law on the achievement of the internal market.



9.2.1 Definition

The formulation “high level of protection” helps allay the fears of some Member States that harmonisation would lead to an agreement on the lowest common denominator.36 However, neither the Treaties nor the ECJ have given a general definition of the term. Notably, Art. 114 TFEU does not contain a formulation allowing for regional differentiation, whereas under Art. 191 (2) TFEU, EU environmental policy shall “tak[e] into account the diversity of situations in the various regions” and the potential costs and benefits of action or lack of action on the economic and social development in the EU. E contrario, the internal market competence (unsurprisingly) does not allow discriminatory legislation. The ECJ has passed several judgments on individual aspects of the required level. In the same way as for legal principles such as the precautionary principle,37 the objective of the high level contains an enabling 34

Previously Art. 2 (3) TEU: “preserving, protecting and improving the quality of the environment” (indent 1), and “a rational use of natural resources” (indent 3).

35

ECJ, C-350/07 (Schulte v. Badenia) [2005] ECR I-9215, 61.

36

Craig, P. P. and de Búrca, G., EU Law – Text, Cases, and Materials, 4th ed. (Oxford: Oxford University Press, 2008), 518; Jacqué, J.-P., “L’acte unique européen,” Revue Trimestrielle de Droit Européen, no. 4 (1986) 575-612: 598.

37

For a definition and distinction, see Winter, G. “The legal nature of environmental principle in International, EC and German Law.” In Principles of European Environmental Law, edited by Macrory, R., 9-28. Groningen: European Law Publishing, 2004, 11 foll.

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(legitimizing) function and a directing (mandatory) function. The principle or objective enables the EU institutions to act.38 The directive function contains specifications for the exercise of the competence and may even contain a requirement to act.39 However, while the ECJ has been ready to use principles to legitimise environmental measures, it has been cautious in determining a set level. The legitimizing function is perceived to have greater influence in practice than the directing function. 40 Accordingly, the ECJ has claimed that it could not establish a legal obligation to a certain level deriving from a principle, but only conduct a judicial review of whether there has been a manifest error of appraisal. 41 The same tendency can be observed for the definition of the high level of protection. The phrase “high level of protection” already suggests that harmonisation cannot be undertaken at the lowest possible (i.e. no) environmental standard. On the other hand, a high level of protection is not synonymous with “the highest level of protection” within the EU42 or the highest possible level. 43 If the highest level were required, the possibility of national opt-ups in Art. 114 (4) to (7) TFEU would be obsolete. Unlike the former Art. 2 TEC, Art. 3 (3) TEU in its Lisbon wording does not even require an improvement of the existing environmental standards, so the high level cannot be benchmarked against national standards of protection. Even so, in the case of biofuels and bioliquids, the European requirements have largely exceeded the prior standards in most Member States. Within the margins established by the highest and lowest standards, the requirements established by the ECJ are limited. According to the ECJ, a sufficiently high level of protection has been achieved where the EU goes beyond the level of protection required under the relevant international obligations. 44 Considering the generalizing nature of multilateral environmental agreements (see below, Ch. 10), the sustainability criteria certainly fulfil those requirements. Beyond this, a necessary level of protection is difficult to determine. 45 It has been presumed that it is accumulated by considering environmental standards of Member States usually fostering high standards, plus some third parties, as well as studies on the scientific, technical, economic and environmental aspects 38

For example, the precautionary principle was invoked to enable measures during the BSE crisis. ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265, para. 99.

39

Winter, G. “Overview of the Community principles.” In The European Convention and the future of European environmental law, edited by Jans, J. H., 3-25. Groningen: European Law Publishing, 2003, 4, 7.

40 41

Meßerschmidt, K., Europäisches Umweltrecht (Munich: Beck, 2011), §3 para. 77.

ECJ, C-284/95 (Safety Hi-Tech) [1998] ECR I-4301, para. 37.

42 43

Ibid., para. 49; ECJ, C-233/94 (Germany v. European Parliament and Council) [1997] ECR I-2405, para. 48.

ECJ, C-284/95 (Safety Hi-Tech) [1998] ECR I-4301, para. 49; ECJ, C-341/95 (Bettati) [1998] ECR I-4355, para. 47.

44

ECJ, C-284/95 (Safety Hi-Tech) [1998] ECR I-4301, para. 48; ECJ, C-341/95 (Bettati) [1998] ECR I-4355, para. 46.

45

Krämer, L. “Art. 174 EGV.” In Kommentar zum EU- und EG-Vertrag, edited by von der Groeben, H. and Schwarze, J., 6th ed. Munich: Beck, 2003, para. 21.

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of the matter at hand. 46 Overall, the EU institutions benefit from a broad discretion in initiating and drafting secondary legislation. 47



9.2.2 Tools in determining the level of protection

Nonetheless, some requirements are stated in order to determine the high level of protection. Most prominently, Art. 114 (3) TFEU requires the Commission to recur to available scientific data. Moreover, environmental principles and other EU objectives have to be considered.



9.2.2.1 Recurrence to the available scientific and technical data

The high level of protection is to be determined by taking into account scientific data – measures cannot be based on mere speculation, but on the current state of scientific knowledge. 48 In application of the precautionary principle, absolute certainty is not required. 49 Where there is scientific uncertainty, scientific findings may differ and contradict depending on the study; it cannot be required that a legislative measure is based on all available research. In the context of the sustainability criteria, the environmental impact of land use changes through bioenergy expansion is undisputed. While the impact of biodiversity loss and land use changes may not be determined exactly, there is clear evidence to its effect (see above, section 1.2.2). Moreover, a potentially positive GHG balance, i.e. adverse for climate change mitigation, has been demonstrated for the production of biomass for energy in numerous research studies.50 The sustainability criteria also meet the requirements for ongoing, dynamic adaptation to new scientific developments, reflecting the requirement for improvement in Art. 3 (3) TEU. Art. 17 (7) RED establishes numerous reporting requirements on various environmental and social factors, providing a basis for adaption of the criteria to new findings. Moreover, the calculation methods on 46 47

Krämer, L., EU environmental law, 7th ed. (London: Sweet & Maxwell, 2011), 1. 13, 2.61.

ECJ, C-84/94 (United Kingdom v. Council) [1996] ECR I-5755, para. 57 foll; ECJ, C-233/94 (Germany v. European Parliament and Council) [1997] ECR I-2405, 55 foll; Tietje, C. “Art. 114 AEUV.” In Das Recht der Europäischen Union, edited by Grabitz, E., Hilf, M., and Nettesheim, M., 46th supplement delivery. Munich: Beck, 2011, para. 147.

48

ECJ, C-192/01 (Commission v. Denmark) [2003] ECR I-9693, 51; ECJ, C-41/02 (Commission v. The Netherlands) [2004] ECR I-11375, para. 53.

49

The precautionary principle is applicable beyond Art. 192 (2) TFEU. ECJ, C-157/96 (National Farmers’ Union) [1998] ECR I-2211, para. 623 foll; ECJ, C-236/01 (Monsanto) [2003] ECR I-8105, 128, 133. In determining the high level of protection, its application is mandatory. ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265, 184, 192.

50

Kim, H., Kim, S., and Dale, B. E., “Biofuels, land use change, and greenhouse gas emissions: some unexplored variables,” Environmental Science & Technology 43, no. 3 (2009) 961-967; Searchinger, T. et al., “Use of U.S. croplands for biofuels increases greenhouse gases through emissions from land-use change,” Science 319, no. 5867 (2008) 1238-1240; Fargione, J. et al., “Land clearing and the biofuel carbon debt,” Science 319, no. 5867 (2008) 1235-1238.

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the carbon balance in Art. 18 RED are open to review, giving room to technological advances (Art. 18 (7) RED).51 Thereby, the sustainability criteria in their current form are based on scientific and technical evidence. However, the recurrence to available scientific evidence in Art. 114 (3) TFEU does not seem to be a sufficient criterion in determining a high level of protection, as it can only provide a basis for the level of protection chosen. However, as a policy choice, the level of protection does not only refer to science, but also the risk considered acceptable in a society at a given moment.52 Accordingly, other factors have to be taken into account. These can for example be undertaken through the consideration of EU policies53 and principles.



9.2.2.2 The precautionary principle

Art. 191 (2) TFEU enumerates several principles to underpin EU environmental policy: the precautionary principle, the prevention principle, the rectification of environmental damage at source, and the polluter pays principle. Art. 114 (3) TFEU does not explicitly mention principles of environmental policy. Although Art. 191 (2) TFEU, according to its wording, only applies to environmental matters, it has been extended to different fields as a generally applicable principle. By application of the integration principle (Art. 11 TFEU),54 these principles are not only applicable to environmental law and policy, but also recognised as general principles of European law.55 In this context, the precautionary principle is of particular interest. The generally optional application of the precautionary principle56 may even have become mandatory to EU institutions in order to maintain the high standard of protection.57 Thereby, the precau51

The requirement to recur to scientific or technological data is not absolute. If it is not respected during the legal procedure, but an ex post examination comes to the result that the measure would have been enacted the same way, the measure is not illegal; Nettesheim, M. “Art. 174 EGV.” In Das Recht der Europäischen Union, edited by Grabitz, E. and Hilf, M., 40th supplement delivery. Munich: Beck, 2009, 68.

52

CFI, T-13/99 (Pfizer v. Council) [1999] ECR II-3305, 151; CFI, T-70/99 (Alpharma) [2002] ECR II-3495, 164.

53

CFI, T-13/99 (Pfizer v. Council) [1999] ECR II-3305, 151.

54

While integration is commonly referred to as a principle, it should rather be qualified as a rule, as it strictly requires the bridging between different areas of policy. Winter, G. “The legal nature of environmental principle in International, EC and German Law.” In Principles of European Environmental Law, edited by Macrory, R., 9-28. Groningen: European Law Publishing, 2004, 11, 15.

55

ECJ, C-2/90 (Commission v. Belgium) [1992] ECR I-4431. ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265; ECJ, C-157/96 (National Farmers’ Union) [1998] ECR I-2211, 63 foll; CFI, T-13/99 (Pfizer v. Council) [1999] ECR II-3305, 139 foll; ECJ, C-236/01 (Monsanto) [2003] ECR I-8105, 128, 133.

56 57

ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265, 99.

CFI, T-74/00 (Artegodan and others v. Commission) [2002] ECR II-4945, 184, 192 “requiring”; CFI, T-13/99 (Pfizer v. Council) [1999] ECR II-3305, 444, “can be required”.. See also Winter, G. “The legal

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tionary principle plays into the determination of the high level of environmental protection (see also section 3.3). Notably, the precautionary principle can only be referred to after the available scientific and technical data has been examined. The precautionary principle allows the EU to legislate where there is scientific uncertainty on the existence and the extent of a risk, without having to wait until the reality or the seriousness of those risks becomes fully apparent.58 Accordingly, the notion of the precautionary principle is tied into scientific uncertainty and risk assessment.59 Where the risk assessments result in scientific uncertainty, the precautionary principle comes into play. As shown in Ch. 1, the extent of climate change and its impact on biodiversity are not yet entirely understood. Similarly, the estimation of adverse effects of increasing production of bioenergy and the increased use of bioenergy is based on models taking into account diverse variables. Considering the severity of the potential outcomes, action can be taken according to the precautionary principle despite the residual uncertainty. As with other principles, the precautionary principle has an enabling (legitimizing) function and a directing (mandatory) function.60 Thereby, it goes beyond a mere balancing of criteria, and contains an optimisation requirement.61 However, it has to be borne in mind that while principles and rules are both legally binding, principles have to be balanced against each other.62 From this results a margin of discretion in the application of the precautionary principle.63 This might explain why the ECJ has abstained from setting a determinate nature of environmental principle in International, EC and German Law.” In Principles of European Environmental Law, edited by Macrory, R., 9-28. Groningen: European Law Publishing, 2004, 30. 58

ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265, 99. See also ECJ, C-6/99 (Greenpeace France and others) [2000] ECR I-1651; CFI, T-13/99 (Pfizer v. Council) [1999] ECR II-3305, 381, 143; CFI, T-70/99 (Alpharma) [2002] ECR II-3495, 156.

59

ECJ, C-3/00 (Denmark v. Commission) [2003] ECR I-2643, 51. On the level of evidence required, see CFI, T-74/00 (Artegodan and others v. Commission) [2002] ECR II-4945, 192; CFI, T-13/99 (Pfizer v. Council) [1999] ECR II-3305, 143 foll; Walker, V. R., “The myth of science as a “neutral arbiter” for triggering precautions,” B.C. Int’l & Comp. L. Rev. 26, no. 2 (2003) 197-228: 221 foll.

60

For example, the precautionary principle was invoked to enable measures during the BSE crisis. ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265, para. 99.

61

Calliess, C. “Inhalt, Struktur und Vorgaben des Vorsorgeprinzips im Kontext der Gestaltung des Umweltrechts.” In Jahrbuch des Umwelt- und Technikrechts 2006, edited by Hendler, R., et al., 89-145. Berlin: UTR, 2006, 99.

62

Alexy, R., Theorie der Grundrechte, 4th ed. (Frankfurt am Main: Suhrkamp, 2001), 71 foll. See also Winter, G. “The legal nature of environmental principle in International, EC and German Law.” In Principles of European Environmental Law, edited by Macrory, R., 9-28. Groningen: European Law Publishing, 2004, 15 foll.

63

CFI, T-74/00 (Artegodan and others v. Commission) [2002] ECR II-4945, 186. Notably, the Member States, which are not held to the high level of protection for example under Art. 95 (3) TEC, generally benefit from a wide discretion in case of scientific uncertainty. ECJ, C-3/00 (Denmark v. Commission) [2003] ECR I-2643, 43; CFI, T-74/00 (Artegodan and others v. Commission) [2002] ECR II-4945, 199.

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level, overall focussing on the legitimizing rather than the directing function.64 Accordingly, the ECJ has claimed that it could not establish a legal obligation to a certain level deriving from a principle, but only conduct a judicial review of whether there has been a manifest error of appraisal.65 Accordingly, the precautionary principle only provides limited guidance for the determination of the high level of protection. Thereby, it cannot be considered that the sustainability criteria in their current form do not allow for a high level of environmental protection.



9.2.2.3 The objective of sustainable development

According to Art. 3 (3) TEU, the EU shall work for sustainable development in Europe. According to Art. 11 TFEU, environmental protection requirements must be integrated into EU policies with a view to sustainable development. However, the notion of sustainable development in this context does not have the quality of a legally binding principle, but a mere objective or policy, as it lacks determinable content.66 Environmental objectives do not set concrete requirements and are clearly not enforceable.67 Consequently, no concrete guidance on the high level of environmental protection can be deducted from Art. 3 (3) TEU, Art. 11 TFEU.



9.2.2.4 Art. 37 Charter of Fundamental Rights of the European Union

Guidance on the high level of environmental protection could be drawn from the European Charter on Fundamental Rights, which was made binding with the Lisbon Treaty. According to Art. 6 (1) subpara. 1 TEU, it constitutes primary European law, thus ranking on equal footing with the TEU and the TFEU. It is not to be confused with the European Convention on Human Rights, which has been enacted by the Council of Europe, not under the auspices of the EU. According to Art. 51 (1) Charter of Fundamental Rights, the Charter binds the institutions of the EU and Member States when implementing EU law. Art. 37 Charter of Fundamental Rights stipulates that “a high level of protection and the improvement of the quality of the environment must be integrated into the policies of the Union and ensued in accordance with the principle of sustainable development.”68 64 65

Meßerschmidt, K., Europäisches Umweltrecht (Munich: Beck, 2011), §3 para. 77.

ECJ, C-284/95 (Safety Hi-Tech) [1998] ECR I-4301, para. 37.

66

Winter, G. “The legal nature of environmental principle in International, EC and German Law.” In Principles of European Environmental Law, edited by Macrory, R., 9-28. Groningen: European Law Publishing, 2004, 14.

67

Krämer, L., EU environmental law, 7th ed. (London: Sweet & Maxwell, 2011), 1-10.

68

Notably, the addressees are not limited compared to Art. 51 (1) Human Rights Charter as the Member States, when implementing EU law form part of the EU.

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Art. 37 Charter of Fundamental Rights is not construed as a subjective right, but as a principle under the Charter – to be distinguished from general principles of European Law.69 The principles bind the EU institutions and the Member States (Art. 51 (1) Charter of Fundamental Rights). It constitutes an objective requirement on the obligated parties not to cause negative effects to the concerned value and on the other hand require or allow the concerned party to legislate.70 Thus, it contains obligations for the legislator, but requires implementation and further definition. According to Art. 52 (7) Charter of Fundamental Rights, explanations have been published providing further guidance.71 However, in the case of Art. 37 Charter of Fundamental Rights, these are limited to the note that it is based on the former Art. 2, 6 and 174 TEC, now Art. 3 (3) TEU, Art. 11 and 191 TFEU, and also draws on constitutional law provisions of some Member States. In the academic literature, the term high level of protection is understood as for Art. 191 (2) and Art. 114 TFEU, referring to the principles enumerated in Art. 191 (2) TFEU, including the precautionary principle, but also the principle of sustainable development.72 This circular reasoning does not provide any more guidance on the determination of the high level of environmental protection. At the least, it is now explicit that the quality of the environment shall be improved – rather than just maintained – where activities have negatively affected it. Where the quality of the environment has been lost, it shall be re-established.73 However, no guidance is given on what timeframe and condition such a regeneration of environmental quality is based. In particular, when it comes to the mitigation of climate change, the baseline level which climate law is to achieve can hardly be established. Thus, it provides no guidance on the definition of the high level of protection under Art. 114 TFEU.

69

European Union, Explanations relating to the Charter of fundamental rights, OJ [2007] C 303/17, explanation on Art. 52 para. 5. Meßerschmidt, K., Europäisches Umweltrecht (Munich: Beck, 2011). On a formulation for subjective right, see a proposal from the constitutional debate in Jans, J. H. “Avosetta-Resolution of 11 and 12/10/2002.” In The European Convention and the future of european environmental law, edited by Jans, J. H., 115-119. Groningen: European Law Publishing, 2003, 119. Suggesting a procedural environmental fundamental right is Calliess, C. “Art. 37 EU-GRCharta.” In EUV/AEUV, edited by Calliess, C. and Ruffert, M., 4th. Munich: Beck, 2011, 9 foll.

70

Jarass, H. D., “Der neue Grundsatz des Umweltschutzes im primären EU-Recht,” Zeitschrift für Umweltrecht 22, no. 12 (2011) 563-565: 563.

71

European Union, Explanations relating to the Charter of fundamental rights, OJ [2007] C 303/17.

72

Calliess, C. “Art. 37 EU-GRCharta.” In EUV/AEUV, edited by Calliess, C. and Ruffert, M., 4th. Munich: Beck, 2011, 6; Jarass, H. D. “Art. 37 EU-GRCharta.” In Charta der Grundrechte der Europäischen Union, edited by Jarass, H. D. Munich: Beck, 2010, 6, 7 with further references.

73

Jarass, H. D. “Art. 37 EU-GRCharta.” In Charta der Grundrechte der Europäischen Union, edited by Jarass, H. D. Munich: Beck, 2010, 6.

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9.2.3 The effort required

Art. 3 (3) TEU, Art. 191 (2) 1 and Art. 114 (3) ad fine TFEU formulate the high level of protection as a benchmark. However, the degree of obligation is differentiated in the wording. According to Art. 191 TFEU, the EU “aims” for a high level of protection. As far as the competence on the harmonisation of the internal market is concerned according to Art. 114 (3) TFEU, the European Commission “will take as a base a high level of protection”, European Parliament and Council “will also seek to achieve this objective”, even though the obligations of the different institutions are not differentiated in practice.74 Moreover, unlike the aim of a high level of protection in Art. 191 (2) TFEU, the formulation of Art. 114 (2) TFEU does not cover an EU sectorial policy overall, but only holds individual acts of secondary legislation to a high level of environmental protection. Accordingly, the high level of protection is not violated only because it is not achieved by an individual measure.75 Neither Art. 114 (3) nor Art. 191 TFEU require the achievement of the high level of protection, but only movement toward it. The formulation takes into account that environmental protection is only one of the objectives enumerated in Art. 3 (3) TEU. Thus, the high level of protection must be balanced against different goals:76 the proportionality of the measure must be considered within the broad margin of appreciation of the EU institutions.77 Thus, the European institutions not only benefit from a large margin of manoeuvre in determining the high level of protection, but also in the measures taken towards this target.



9.2.4 Conclusion

A definition of the high level of protection is hardly possible beyond the requirement of using scientific and technical data as a baseline. The precautionary principle and Art. 37 European Charter of Fundamental Rights only provide generic guidance, referring back to each other. No minimum benchmark for the sustainability criteria can be deducted from this. Moreover, there is no clear obligation, let alone a sanction on the institutions, regarding how and when to achieve the high level. Accordingly, there is a broad discre74

See also Art. 3 (3) subpara. 1 TEU. Kahl, W. “Art. 114 AEUV.” In Das Verfassungsrecht der Europäischen Union, edited by Calliess, C. and Ruffert, M., 4th ed. Munich: Beck, 2011, para. 34.

75

ECJ, C-233/94 (Germany v. European Parliament and Council) [1997] ECR I-2405, para. 48.

76

ECJ, C-491/01 (British American Tobacco) [2002] ECR I-11453, para. 124 foll; ECJ, C-434/02 (Arnold André) [2004] ECR I-11825, 44 foll; ECJ, Joined cases C-154/04 and C-155/04 (Alliance for Natural Health) [2005] ECR I-6451, para. 109 foll.

77

ECJ, C-84/94 (United Kingdom v. Council) [1996] ECR I-5755, para. 58; ECJ, C-157/96 (National Farmers’ Union) [1998] ECR I-2211, para. 61; ECJ, Joined cases C-154/04 and C-155/04 (Alliance for Natural Health) [2005] ECR I-6451, 52; ECJ, Joined cases C-453/03, C-11/04, C-12/04 and C-194/04 (ABNA) [2005] ECR I-10423, para. 69.

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tion granted to the EU institutions on the “if” as well as the “how” of legislative action.78 Accordingly, the level of protection achieved by the sustainability criteria is sufficient in order to fulfil the requirements of Art. 114 (3) TFEU.



9.3 Opting up

Through their constitutions, or through simple law, some Member States may be held to a higher environmental standard than Art. 114 (3) TFEU prescribes to the EU institutions, or may simply wish to maintain a higher standard according to public or political demands. As long, and as far as the European Union has not enacted secondary measures in a specific areas, the legislative competence rests with the Member States, unlimited within the general framework of primary legislation, unless the TFEU foresees an exclusive competence of the EU.79 However, where secondary legislation has been enacted subject to the principle of subsidiarity (Art. 5 TEU), the competence of Member States is limited according to the rules of the legal basis of the secondary legislation. Where a harmonising measure, such as the RED sustainability criteria, has been taken according to Art. 114 TFEU, Member States can only enact diverging measures subject to the conditions set by Art. 114 (3) to (6) TFEU until the area in question is fully harmonised.80 Where secondary law has been enacted, the matter falls into the exclusive competence of the EU as far as the scope of the secondary legislation.81 In this context, Art. 14 (3) to (6) TFEU, which allow Member States to go beyond the requirements established in secondary legislation, are an expression of the shared competence between EU and the Member States on issues of the internal market (Art. 4 (2) (a) TFEU).82 The “escape clause” of Art. 114 (4) to (6) TFEU allows Member States to maintain or introduce more stringent legislation – “opting up”. “Opting down” to a lower standard is not permitted. Diverging national regulation is dependent on several conditions as well as European Commission approval.83 78

ECJ, C-66/04 (United Kingdom v. European Parliament and Council) [2005] ECR I-10553.

79

Krämer, L. and Winter, G. “Umweltrecht.” Chap. 26 In Europarecht, edited by Schulze, R. and Zuleeg, M., 2nd, 1135-1216. Baden Baden: Nomos, 2010, para. 1 foll.

80

Tietje, C. “Art. 114 AEUV.” In Das Recht der Europäischen Union, edited by Grabitz, E., Hilf, M., and Nettesheim, M., 46th supplement delivery. Munich: Beck, 2011, 69. For the comparable structure of Art. 191 TFEU Krämer, L. and Winter, G. “Umweltrecht.” Chap. 26 In Europarecht, edited by Schulze, R. and Zuleeg, M., 2nd, 1135-1216. Baden Baden: Nomos, 2010, 15.

81

Tietje, C. “Art. 114 AEUV.” In Das Recht der Europäischen Union, edited by Grabitz, E., Hilf, M., and Nettesheim, M., 46th supplement delivery. Munich: Beck, 2011, 68.

82

See Kahl, W. “Art. 114 AEUV.” In Das Verfassungsrecht der Europäischen Union, edited by Calliess, C. and Ruffert, M., 4th ed. Munich: Beck, 2011, 12.

83

ECJ, C-41/93 (France v. Commission) Opinion of Advocate General Tesauro [1994], para. 4.

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9.3.1 Applicability

The safeguard clause of Art. 114 (3) TFEU applies to all secondary legislation and consequently also to implementing measures and legislation delegated by the Commission.84 However, once an area has been fully harmonised, Member States can no longer enact diverging legislation according to Art. 114 (4) to (6) TFEU.85 In the case of the sustainability criteria, numerous issues are still under investigation, such as indirect land use changes or the details on the carbon balance of biofuels and bioliquids. Moreover, several reporting requirements have been introduced, for example on socio-economic issues (Art 17 (7) RED) and the issues of RED more generally (Art. 21, 22 RED), often combined with requirements for review and more detailed regulation. Accordingly, full harmonisation has not yet been reached. RED itself may have intended to exclude the application of Art. 114 (4) to (6) TFEU, which would then require a discussion of whether the escape clause can be excluded prior to full harmonisation. Art. 17 (8) RED prescribes that biomass fulfilling the sustainability criteria must not be excluded from the national support schemes. However, this does not imply that all biomass has to receive the maximum available support. Recital 95 RED explicitly states that costs incurred due to the compliance with more stringent criteria may be reimbursed. The wording suggests only that no additional incentive may be given. Thus, although the incentive may not be strong enough to entice producers to comply with higher standards, such standards are nonetheless permissible.



9.3.2 Conditions for more stringent national criteria

Art. 114 (4) and (5) TFEU set different conditions for more stringent national law, depending on the time of enactment compared to the adoption of the harmonizing measure. After a harmonizing measure has been adopted, an opt-up is only permissible under the cumulative conditions of Art. 114 (5) TFEU: A Member State may “introduce national provisions based on new scientific evidence relating to the protection of the environment [...] on grounds of a problem specific to that Member State arising after the adoption of the harmonisation measure”. While Member States may choose their own level of protection,86 the Member State’s measure has to be proportionate. Measures may not discriminate or present a disguised barrier to trade (see Art. 114 (6) TFEU).87 84 85

ECJ, C-66/04 (United Kingdom v. European Parliament and Council) [2005] ECR I-10553, para. 50.

ECJ, C-278/85 (Kommission v. Denmark) [1987] ECR 4069, para. 12. See also ECJ, 148/78 (Ratti) [1979] ECR 1629, para. 26 foll.

86

ECJ, C-375/90 (Commission v. Greece) [1993] ECR I-2055, para. 19; ECJ, C-3/00 (Denmark v. Commission) [2003] ECR I-2643, para. 63.

87

ECJ, C-3/00 (Denmark v. Commission) Opinion of Advocate General Tizzano [2003], para. 106-114.

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New scientific evidence can come in two different forms: either a new problem occurs, or new information becomes available regarding a known problem. In the case of biomass sustainability, the problem itself was known, even though the chains of causality in detail may have been (and remain) obscure. Member States are thus limited to presenting new facts on this known problem. In this case, a mere re-evaluation of pre-existing information is not sufficient.88 However, taking into account the precautionary principle, and analogue to the interpretation of scientific facts in Art. 114 (3) TFEU, a comprehensive demonstration of the necessity of the national measure cannot be required.89 While the environmental impact of bioenergy has not been assessed with complete certainty, numerous studies exist on the matter (see above, section 1.2.3). Thus, it will be difficult to present new scientific facts. However, evidence of the success of the regulatory instrument could be counted here. While a mere policy change is not sufficient in order to justify a measure under Art. 114 (5) TFEU,90 Member States can present empirical evidence of the failing of the sustainability criteria or the success of other regulatory schemes beyond the European Union such as the US RFS 2. If empirical evidence confirms a higher success rate of such a scheme, new scientific evidence is available. However, the problem also has to be specific to that Member State. Even though this does not mean that the problem only occurs in this Member State, the problem may not be an EU-wide one.91 Especially for the scenario of imports into the European Union, such a specific impact seems almost impossible to ascertain. Members could argue that the use or import of biomass has risen considerably more than in other Member States. However, there is little evidence for such a development. Socio-economic reasons have also been rebuffed by the ECJ.92 A strong awareness for environmental concerns in a certain Member State is unlikely to be sufficient.93 Thus, the establishment of a specific problem by a Member State seems to be all but impossible,94 and consequently the potential for a state to opt up seems very unlikely. 88

Fleurke, F. M., “What use for Article 95(5) EC?,” J. Environ. Law 20, no. 2 (2008) 267-278: 269.

89

Jans, J. H. and von der Heide, A.-K., Europäisches Umweltrecht (Groningen: European Law Publishing, 2003), 144; Kahl, W. “Art. 114 AEUV.” In Das Verfassungsrecht der Europäischen Union, edited by Calliess, C. and Ruffert, M., 4th ed. Munich: Beck, 2011, para. 55, 63.

90

Jans, J. H. and von der Heide, A.-K., Europäisches Umweltrecht (Groningen: European Law Publishing, 2003), 144.

91

Kahl, W. “Art. 114 AEUV.” In Das Verfassungsrecht der Europäischen Union, edited by Calliess, C. and Ruffert, M., 4th ed. Munich: Beck, 2011, 64.

92

ECJ, Joined cases C-439/05 P and C-454/05 P (Oberösterreich and Austria v. Commission) [2007] ECR I-7141, para. 65. on the protection of organic agriculture from GMOs.

93

Zander, J., “The “green guarantee” in the EC Treaty: two recent cases – Analysis,” J. Environ. Law 16, no. 1 (2004) 72-79: 76.

94

Kahl, W., “Neuere hochstrichterliche Rechtsprechung zum Umweltrecht – Teil 1,” JuristenZeitung 63, no. 2 (2008) 74-81: 76.

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However, this limitation only applies insofar as the sustainability criteria are to be applied to particular national support schemes that are quotas or provide incentives for the consumption of renewable energy. Where Member States are ready to forego the accountability of bioliquids and biofuels for the purpose of the fulfilment of national targets, more-stringent criteria could be applied to other support schemes. The same is true for biomass for energy that is not in a liquid aggregate and is thus not covered by the sustainability criteria.95 Accordingly, Member States can argue that the more stringent requirements they wish to introduce do not fall within the scope of Art. 17 (8) RED. This is without doubt the case for high conversion technologies, which Member States shall promote (Art. 13 (6) subpara. 2 RED).



9.3.3 Conclusion

Accordingly, Member States that attempt to opt up will struggle to prove that the conditions of Art. 114 (5) TFEU have been fulfilled, as Art. 17 (8) RED appears to be valid concretisation of Art. 114 (5) TFEU. More-stringent national legislation is unlikely to be introduced within the scope of application of the sustainability criteria. However, whether a measure a Member State wishes to introduce falls within the scope of Art. 17 (8) RED is left to interpretation.

95

Accordingly, for example Art. 27 (5) n. 1 EEG 2012 limits the use of enumerated renewable materials (nachwachsende Rohstoffe) to 60% per calendar year in an attempt to limit the negative impact of monocultures and mobilizing alternative energy crops.

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International Environmental Law

chapter 10

international environmental law

The international law touching on bioenergy – although not necessarily as a focus – is diverse. The relevant agreements address issues of climate change mitigation, biodiversity protection, trade liberalisation and economic development and the conflict conglomerate between the different issues to varying degrees. The different forms of international entities, from international organisations to international agreements, are mainly differentiated by their level of integration, with international organisations having the strongest institutions and corresponding strong mechanisms of ensuring compliance with their respective standards. However, definitions differ1 and the transitions between the different levels of integration are fluid. Accordingly, agreements touching on international environmental law are often referred to as multilateral environmental agreements (MEAs) without giving further indication of the level of integration.2 In this chapter, the compliance of the sustainability criteria with the relevant MEAs will be examined, also touching on the impact these have themselves on conservation or protection of nature. This includes agreements on international energy law, such as the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA). Numerous MEAs exist addressing the protection or conservation of biodiversity or individual aspects of the environment, with different geographical scopes and approaches, focussing on certain habitats or species such as the Ramsar Convention on wetlands of international importance, or following a global and universal approach3 such as the Convention on Biological Diversity (CBD). Notably, no binding agreement has yet been reached on the protection of biodiverse grasslands, nor one devoted solely to the protection of forests. Moreover, agreements focussing on reducing climate change – which may conflict with other environmental protection goals – will be addressed, notably the United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol (KP). Moreover, the International Tropical Timber Organisation (ITTO), balancing environmental and trade interests, will be addressed. Before turning to the question of whether international environmental law sets a floor for the sustainability criteria, it needs to be established who is the contracting party to the agreement – the EU or the Member States. Moreover, it has to be established that the agreements do not outlaw the application of environmental standards to imports outright.

1

Matz, N., Wege zur Koordinierung völkerrechtlicher Verträge: völkervertragsrechtliche und institutionelle Ansätze (Berlin: Springer, 2006), 25 foll.

2

See for example UNEP. “Multilateral Environmental Agreement Negotiator’s Handbook.” Nairobi: UNEP, 2007. Wold, C., “Multilateral environmental agreements and the GATT: conflicts and resolution,” Envtl. L. 26(1996) 841-921.

3

Sands, P. et al., Principles of International Environmental Law, 3rd ed. (Cambridge: Cambridge University Press, 2012), 370 foll.

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10.1 Contracting party: EU or Member States

MEAs only bind Contracting Parties (inter partes). 4 Whether the EU or its Member States are parties to an agreement depends firstly on the vertical distribution of competences between EU and Member States for the conclusion of international agreements, and secondly on what membership the agreement in question allows, i.e. whether subjects of international law other than states can become contracting parties. The EU, which has replaced and succeeded the European Community (EC) as of the Treaty of Lisbon (Art. 1 (3) TEU), is a subject of international law (Art. 47 TEU) and can therefore in principle conclude international agreements (see Art. 216 (6) TFEU). The vertical distribution of competences between the EU and the Member States has been systematised in the Treaty of Lisbon, distinguishing exclusive, shared and supporting competences (Art. 2, 3, 4, 6 TFEU).5 According to Art. 2 (1) TFEU the EU has an exclusive competence where it is explicitly conferred. Where the EU has been granted an exclusive competence, only the EU can legislate on this matter, unless the Member States are specifically empowered to do so, or where Member States only implement EU law. The environmental competence of Art. 191 TFEU does not confer competences onto the EU, instead, it declares that the EU and its Member States shall endeavour in the cooperation of third countries and international organisations within their respective competences (Art. 191 (4) TFEU). However, according to Art. 3 (2) TFEU, the EU has an exclusive competence for the conclusion of international agreements in areas where stipulated in European primary or secondary law or where this is necessary to exercise internal competences or where common rules would be affected. This provision codifies and partly amends the ECJ jurisprudence on implied external competences already applied under the Treaty of Nice,6 considering expressly granted external competences7 and implied competences where the scope of European provisions would be altered,8 i.e. the external competence is a corollary to the exercised internal competence.9 The 4

Permanent Court of International Justice, France v. Turkey (Lotus) [1927] Series A n. 10, 18; Gourgourinis, A., “General/particular international law and primary/secondary rules: terminology of a fragmented system,” European Journal of International Law 22, no. 4 (2011) 993-1026: 1004.

5

Schütze, R., “Lisbon and the federal order of competences: a prospective analysis,” European Law Review 33, no. 5 (2008) 709-722.

6

ECJ, 22/70 (Commission v. Council, AETR) [1971] ECR 263, cases 3, 4; ECJ, 6/76 (Kramer) [1976] ECR 1279; ECJ, Opinion 1/76 on the draft agreement establishing a laying-up fund for inland waterway vessels [1977] ECR ECJ 741.

7

ECJ, Opinion 1/94 on the Competence of the Community to conclude international agreements concerning services and the protection of intellectual property – Article 228 (6) of the EC Treaty [1994] ECR I-5267, para. 95.

8

ECJ, 22/70 (Commission v. Council, AETR) [1971] ECR 263.

9

ECJ, Opinion 2/00 [2001] ECR I-9713, para. 44. This applies even where competences are shared between the EU and the Member States ECJ, C-459/03 (Commission v. Ireland) [2006] ECR I-4635, para. 95.

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EU has exercised this competence quite extensively and thereby already enjoyed extensive (shared)10 external competences in these areas.11 The EU can therefore conclude international agreements according to the procedure laid down in Art. 216 (1), 218 TFEU which are also binding within its Member States as European law (Art. 216 (2) TFEU).12 Notably, as far as external trade is concerned, the EU has an exclusive competence according to Art. 207 TFEU, which also modifies the legislative procedure laid down in Art. 216 TFEU.13 For example, the EU is a Member to the Convention on Biodiversity (CBD),14 the International Tropical Timber Agreement (ITTA),15 the United Nations Framework Agreement on Climate Change (UNFCCC)16 and its Kyoto Protocol (KP),17 the Statute of the International Renewable Energy Agency.18 However, not all international agreements allow for non-state contracting parties. For example, the EU cannot become a member of the IEA, as this requires membership of the OECD.19 Similarly, the EU is not a Member to the Ramsar Convention, which restricts membership mainly to members of the 10

Klamert, M. and Maydell, N., “Lost in exclusivity: implied non-exclusive external competences in Community law,” European Foreign Affairs Review 14, no. 3 (2008) 495-513. See also Rhinard, M. and Kaeding, M., “The international bargaining power of the European Union in “mixed” copmetence negotiations: the case of the 2000 Cartagena Protocol on Biosafety,” J. Common Market Stud. 44, no. 5 (2006) 1023-1050.

11

See only Krämer, L., EU environmental law, 7th ed. (London: Sweet & Maxwell, 2011), 5-02 foll. See also de Baere, G., “”O, where is faith? O, where is loyalty?” some thoughts on the duty of loyal co-operation and the Union’s external environmental competencesin the light of the PFOS case,” Environmental Law Review 36, no. 1 (2011) 405-419.

12

ECJ, C-239/03 (Commission/France) [2004] ECR I-9325; ECJ, C-213/03 (Pecheurs de Berre) [2004] ECR I-7357.

13

Eeckhout, P., EU external relations law, 2nd ed. (Oxford: Oxford University Press, 2011), 3. See also Devuyst, Y., “The European Union’s competence in international trade after the Treaty of Lisbon,” Ga. J. Int’l & Comp. L. 39(2011) 639-661.

14

Council, Council Decision 93/626/EEC concerning the conclusion of the Convention on Biological Diversity, OJ [1993].

15

Council, Decision 96/493/EC concerning the signing and provisional application of the International Tropical Timber Agreement 1994 on behalf of the European Community, OJ [1996] L 208/1.

16

Council, Decision 94/69/EC concerning the conclusion of the United Nations Framework Convention on Climate Change, OJ [1994] L 33/11.

17

Council, Decision 2002/358/EC concerning the approval, on behalf of the European Community, of the Kyoto Protocl to the United Nations Framework Convention on Climate Change and the joint fulfilment of commitments thereunder, OJ [2002] L 130/1.

18

Council, Decision 2010/385/EU on the conclusion of the Statute of the International Renewable Energy Agency (IRENA) by the European Union, OJ [2010] L 178/17.

19

OECD, Supplementary Protocol No. 1 to the Convention on Economic Co-operation and Development [1960]. Based on Art. 12 (c) to a supplementary Protocol to the OECD Convention of 14/12/1960, the European Commission participates in the work of the OECD, without the EU being a contracting party. See also Art. 220 (1) TFEU.

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United Nations (Art. 9 (2) Ramsar Convention), with the result that the EU Member States and not the EU itself have contracted under the Ramsar Convention.20



10.2 The application of the sustainability criteria to imports

The sustainability criteria apply to biomass, biofuels and bioliquids grown and produced within the territory of the Member States and also where these goods are imported into the EU (i.e. grown or produced outside the jurisdiction of the EU and its Member States (Art. 17 (1) RED). Thus, it is necessary to assess whether the multilateral agreements permit or even require the sustainability criteria to be extended to imports. In favour of such an interpretation could perhaps be brought forward that the preamble of the CBD considers biodiversity a “common concern of humankind” (al. 3) which could be considered to trigger an obligation under global governance. The preamble of the UNFCCC declares climate change and its adverse effects likewise a “common concern of humankind”. A similar stance is suggested by the Ramsar Convention, as its scope extends to wetlands of international importance.21 Accordingly, Art. 3 (1) Ramsar Convention requires contracting parties to “promote the conservation of the wetlands included in the list”, i.e. which could be taken to mean all Ramsar sites to be promoted by all contracting parties. However, such an interpretation is not imperative. However, MEAs emphasise the territorial sovereignty of contracting parties. The CBD stresses the sovereignty of the resource states to exploit their own resources (Art. 4 CBD). The CBD applies within the jurisdictional scope of each Contracting Party, i.e. within the limit of its national territory (Art. 4 a) CBD). Art. 2 (3) Ramsar Convention explicitly states that the sovereign rights of the respective Contracting Party are not affected by membership to the agreement. Accordingly, the responsibility to protect and use wetlands wisely rests with the territorial power (Art. 2 (1) Ramsar Convention). Notably, a regulation of imports does not infringe the sovereign rights of contracting parties to protect and use the resources within their territory. The sustainability criteria only apply at the point of import, i.e. when the goods in question enter the territory of the EU Member States. The Ramsar Convention and the CBD foresee several opportunities for cooperation between contracting parties. The sustainability criteria can be seen as support for conservation measures required under Art. 8 m) CBD. Art. 18 CBD requires contracting parties to engage in technical and scientific co-operation. Within CBD, where processes and activities carried out under its jurisdiction 20

For a list of the Contracting Parties see http://www.ramsar.org/cda/en/ramsar-about-parties/main/ ramsar/1-36-123_4000_0 (13/1/2013).

21

Ferrajolo, O., “State Obligations and Non-Compliance in the Ramsar System,” Journal of International Wildlife Law & Policy 14, no. 3-4 (2011) 243-260: 245.

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also have effects beyond the territory (Art. 4 b) CBD), Art. 5 CBD provides for co-operation between the concerned parties “as far as possible and as appropriate”. Moreover, Art. 20 (2) CBD provides that Contracting Parties shall provide “new and additional resources” to cover the “agreed full incremental costs” in developing countries. According to Art. 5 Ramsar Convention, Contracting Parties shall consult about implementing obligations under the Convention, in particular, but not limited to transboundary ecosystems. They shall “endeavour to coordinate regulatory measures aimed at the conservation of wetlands.” The sustainability criteria only require limited cooperative elements such as the requirement on the Commission to negotiate international agreements on the matters covered in the sustainability criteria (Art. 18 (4) subpara. 1 RED). However, these co-operation possibilities do not prohibit unilateral measures such as the sustainability criteria, which apply to imports without being organised cooperatively. This is already suggested by the formulation “as far as possible”. Art. 14 (1) d) CBD gives a further indication, which in cases of imminent or grave danger to the territory of another state, only requires the other concerned state to be notified, whereas the state of origin takes action to address the danger unilaterally. While the agreements explicitly promote co-operative measures, they do not prohibit any other conduct. Notably, Art. 4b) CBD cannot be construed to allow only co-operative measures where processes and activities have extraterritorial effects, as the formulation “as far as possible and as appropriate” shows. It is also doubtful that the sustainability criteria could be described as activities or processes, terms not further defined under the CBD. In the following, the compliance of the sustainability criteria with minimum standards in international environmental law is assessed.



10.3 International energy law

Energy issues, including bioenergy, are addressed at an international level by the International Energy Agency (IEA) and the newly established International Agency on Renewable Energy (IRENA). The International Energy Agency (IEA) was established as an autonomous body in 1974 – in the wake of the oil crisis – by the Organisation for Economic Co-operation and Development (OECD).22 Based on its role in reducing the dependence on oil imports (see Art. 6 (a) (i) Decision establishing the IEA), the IEA has expanded its work into a variety of sectors touching on energy security in a more general sense, including economic development, and on raising awareness of the energy aspects of climate change (see below). However, the focus of the IEA remains on the much more extensively used fossil resources, and how to reduce their GHG emission intensity. Where renewable energy is

22

OECD, Decision of the Council establishing an International Energy Agency of the Organisation [1974].

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addressed, this is from the perspective of the expansion of energy from renewable sources.23 Moreover, the IEA’s main role is not to set hard standards, but to act as a coordination platform, making information available and providing policy advice. For example, the IEA runs cooperation platforms such as IEA Bioenergy24 and has published numerous reports on bioenergy,25 including good practice guidelines for bioenergy project development and biomass supply.26 Unlike the IEA, the International Renewable Energy Agency (IRENA) was set up in 2009 to “promote the [...] use of renewable energy with a view to sustainable development” (Preamble). This suggests that IRENA should further the expansion of renewable energy, but in a way that takes into account other conflicting concerns. The IRENA-Statute explicitly addresses the environmental side effects of renewable energy (Art. II b, V, IX IRENA-Statute), awarding competences to the IRENA mainly in knowledge management and coordination for contracting parties’ policies, rather than providing strong guidance for members’ national policies.27 Even though issues surrounding the expansion and limitation of bioenergy fall well within the scope of international energy law, no hard targets can be deduced for the limitation of the expansion of renewable energy which could provide a benchmark for the sustainability criteria. However, these agencies still play an important role as information platforms and sources of policy advice.



10.4 The Convention on Biological Diversity

The sustainability criteria, exempting certain ecosystems and protected areas from cultivation and extraction of biomass for energy, have to be held against the Convention on Biodiversity (CBD). The CBD takes a universal and global approach to environmental protection, 28 with 193 states contracting to 23

See for example IEA/OECD. “World Energy Outlook.” Paris, 2012; IEA. “Energy technology perspectives.” Paris: IEA, 2010. Criticising a bias towards fossil fuels is Rechsteiner, R. “Wind power in context – A clean revolution in the energy sector.” Basel: EnergyWatchGroup, 2008, 10.

24 25

http://www.ieabioenergy.com/ (24/4/2012).

For example IEA. “Biofuels for transport, an international perspective.” Paris, 2004.

26 27

IEA. “Good practice guidelines – Bioenergy project development and biomass supply.” Paris, 2007.

See for example IRENA. “Implementation strategy for a global solar and wind atlas.” Abu Dhabi, 2012. IRENA. “Renewable Energy Roadmap 2030.” Abu Dhabi, 2012. IRENA, “Third Session of the IRENA Assembly: Day 2,” Outreach on climate change and sustainable development (2012): 2. On IRENA’s activities to date including the cooperation with the IEA, see Wright, G., “The International Renewable Energy Agency: a global voice for the renewable energy era?,” Renewable Energy Law and Policy Review 2, no. 4 (2011) 251-268.

28

Wolfrum, R. “Völkerrechtlicher Rahmen für die Erhaltung der Biodiversität.” In 10 Jahre Übereinkommen über biologische Vielfalt: eine Zwischenbilanz, edited by Wolff, N. and Köck, W., 18-35. Baden Baden: Nomos, 2004, 18.

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the agreement and recognizing biodiversity as a common interest.29 Biological Diversity is defined as the diversity of ecosystems, species and genetic diversity within species (Art. 2 al. 1 CBD). The CBD aims for the conservation of biological diversity, its sustainable use and a fair distribution of the benefits from the use of genetic resources (Art. 1 CBD). Thus, the CBD does not require protection, but conservation – allowing sustainable use.30 Focussing on one element of its biodiversity definition, principles have been adopted on a so-called ecosystem approach, as a strategy for integrated management of the protected resources, conciliating conservation and sustainable use.31 Accordingly, the CBD does not consider the protection of biodiversity an absolute objective, but an objective that needs to be balanced against other interests. It has to be noted that the protection of the resource is a foundation for its sustainable use. The CBD is a framework agreement, containing general obligations of Contracting Parties for in situ protection and sustainable use of biodiversity (Art. 8 CBD) for example by the establishment of protection zones and the development of guidelines. According to their special circumstances, Contracting Parties shall draft national strategies on the conservation and sustainable use of biodiversity (Art. 6 CBD). Contracting Parties shall introduce procedures for environmental impact assessment and regulatory measures avoiding the negative impacts of politics on biodiversity (Art. 14 (1) CBD), and monitor relevant activities (Art. 7 CBD). Thus, the obligations under the CBD focus on procedures, without setting measurable targets. Thus, the CBD leaves considerable leeway to members, and is further weakened by formulations like “as far as possible and as appropriate”. Accordingly, the sustainability criteria do not violate the CBD even though they do not contain procedural rules, for example on impact assessment. The general provisions of the CBD have been specified and supplemented by several decisions by the Conference of the Parties (COP). Several decisions address issues of agriculture in general or cultivation of biomass for energy specifically. COP9 Decision IX/1 opted for an in-depth review of the programme of work on agricultural biodiversity, including policy measures to enhance positive impacts and mitigate negative impacts of agriculture on biodiversity.32 Decision IX/2 on agricultural biodiversity recognised the potential risk to biodi29 30

Besides, it also considers socio-economic factors: para. 13, 19, 20 Preamble, Art. 11, 15, 16, 18, 20 CBD.

Burhenne-Guilmin, F. and Casey-Lef kowitz, S., “The Convention on Biological Diversity: a hard won global achievement,” Yearbook of International Environmental Law 3, no. 1 (1992) 43-59: 49. See also IUCN. “World conservation strategy – Living resource conservation for sustainable development.” Gland, 1980.

31

CBD COP 9, Decision IX/7 Ecosystem approach, UNEP/CBD/COP/DEC/IX/7 [2008]. Dickson, B. and Edwards, S. “Comparing the ecosystem approach with sustainable use.” IUCN, 2004; Finlayson, C. M. et al., “The Ramsar Convention and Ecosystem-Based Approaches to the Wise Use and Sustainable Development of Wetlands,” Journal of International Wildlife Law & Policy 14, no. 3-4 (2011) 176-198: 191.

32

CBD COP 9, Decision IX/1: In-depth review of the programme of work on agricultural biodiversity, UNEP/ CBD/COP/DEC/IX/1 [2008].

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versity caused by bioenergy production, agreed that sound policy frameworks for sustainable production and use should be developed, positive and negative impacts of biofuels on biodiversity researched and development cooperation promoted in order to promote sustainable production and use of biofuels.33 However, no details are given on the implementation of such policies; objectives are softly formulated. Accordingly, parties are often “invited” rather than required to act. Provisions that are more precise could be included in a protocol on biomass. However, at the last conference of parties (COP 10) in October 2010 in Nagoya, biomass only appeared at the bottom of the agenda (6.4). Overall, the CBD has introduced broad standards, which allow lots of leeway for the Contracting Parties and often focus on the creation of certain procedures rather than reaching a certain benchmark. The obligations are further weakened by formulations qualifying these obligations. The obligations under the CBD and their implementation have not been able to halt the overall decline of biodiversity. The sustainability criteria, focussing on certain ecosystems and protected areas at least further the goals contained in the CBD and can therefore not be held to violate the CBD. At the least, the CBD gives some indication on the further elaboration of standards, for example through procedural safeguards.



10.5 The Convention on Wetlands of International Importance

Unlike the CBD, the Convention on Wetlands on International Importance 1971, known as the Ramsar Convention, focusses on a specific ecosystem. It takes an ecosystem-wide, integrated approach to environmental protection spanning all sectors of human activity,34 originally focussing on wetlands as waterfowl habitat. It now deals more broadly with the protection of wetland ecosystems, defined as “areas of marsh, fen, peatland or water, whether natural or artificial, permanent or temporary, with water that is static or flowing, fresh, brackish or salt, including areas of marine water the depth of which at low tide does not exceed six metres” (Art. 1 (1) Ramsar Convention). As such, the exclusion of wetlands by Art. 17 (4) (a) RED and peatland (Art. 17 (5) RED complies with the goals of this agreement. Notably, the definition of wetlands in RED as land that is covered with or saturated by water is in line with the Ramsar Convention, even though it does not elaborate on typical wetlands. However, the timeframe appears more limited in RED and might have to be interpreted in the light of the Ramsar Convention. Art. 17 (4) (a) RED only covers land that is covered permanently or for a significant part of the year – under the Ramsar 33

CBD COP 9, Decision IX/2: Agricultural biodiversity: biofuels and biodiversity, UNEP/CBD/COP/DEC/ IX/2 [2008].

34

Finlayson, C. M. et al., “The Ramsar Convention and Ecosystem-Based Approaches to the Wise Use and Sustainable Development of Wetlands,” Journal of International Wildlife Law & Policy 14, no. 3-4 (2011) 176-198: 187.

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Convention, a temporary coverage is sufficient, without further specification to the timeframe. The Ramsar Convention establishes broadly phrased obligations on its contracting parties based around the ecosystem of wetlands, leaving the Contracting Parties with a wide margin of appreciation in interpretation and implementation of the agreement. Moreover, as for the CBD, the general provisions in the Convention are accompanied by phrases like “as far as possible” (Art. 3, (1), (2); 4 (1) Ramsar Convention) and “to promote” (Art. 3 (1), 4 (1) Ramsar Convention). Contracting Parties shall designate wetlands of international importance (Ramsar sites) to be included into the so called Ramsar list, establish nature reserves for wetlands beyond these Ramsar sites, and promote their conservation (Art. 2, 4 Ramsar Convention). Further guidance is given by an integrated framework for wetland inventory, assessment and monitoring.35 However, the term wetland of international importance is not expressly defined, leaving room for interpretation. Some guidance is given by Art. 2.2 Ramsar Convention, defining in broad terms the criteria for selection and additional guidelines adopted by the COP.36 However, this vagueness may also be because the characteristics of wetlands are very diverse across the globe, paired with the aim of the Ramsar Convention to gain universal application.37 Moreover, besides one wetland to be designated before joining (Art. 2 (4) Ramsar Convention), there is no obligation for contracting parties to declare a certain number or proportion of Ramsar sites. However, contracting parties are required to apply the Convention’s Strategic Framework and guidelines for the further development of the list of wetlands of international importance.38 The protection of wetlands is not absolute: conservation is subject to “wise use” (Art. 3 (1) Ramsar Convention). Thus, the designation of wetlands of international importance can be seen as a first step to sustainable management. The Convention itself does not define the concept of wise use, nor enumerate activities that it considers as wise use. A later COP recommendation provides 35

For example Ramsar Convention COP 9, Resolution IX.1 Annex E: An integrated framework for wetland inventory assessment and monitoring (IF-WIAM) [2005].

36

Ramsar Convention COP 9, The criteria for identifying wetlands of international importance [2005]; Ramsar Convention COP 4, Annex to Recommendation 4.10: Guidelines for the implementation of the wise use concept [1990]; Ramsar Convention COP 8, Resolution VIII.20: General Guidance for Interpreting ‘Urgent National Interests’ under Article 2.5 of the Convention and Considering Compensation under Article 4.2 [2002]; Ramsar Convention COP 7, Resolution VII.19 Guidelines for International Cooperation under the Ramsar Convention [1999].

37

Finlayson, C. M. et al., “The Ramsar Convention and Ecosystem-Based Approaches to the Wise Use and Sustainable Development of Wetlands,” Journal of International Wildlife Law & Policy 14, no. 3-4 (2011) 176-198: 179.

38

Ramsar Convention COP 7, Strategic Framework and guidelines for the further development of the list of wetlands of international importance [1999].

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guidance on a range of aspects of wise use;39 wise use is generally understood as “maintenance of their ecological character, achieved through the implementation of ecosystem approaches, within the context of sustainable development”, formally linking wise use to the ecological characteristics of wetlands. 40 Ecological character is defined as “the combination of the ecosystem components, processes and benefits/services that characterise the wetland at a given point in time”. Further guidance is provided, 41 for example on the adoption of wetland policies and programmes, 42 inventories, 43 and monitoring. 44 Notably, the maintenance of the ecological character is undertaken in the context of sustainable use. This shows that some draining of land is not excluded in principle. Further guidelines on integrated management plans45 and for global action on peatlands46 demonstrate the Ramsar Convention’s intent to balance different concerns. The guidance on site management introduces mainly process requirements with the intent of ensuring wise use. The Ramsar Convention currently does not establish criteria for the assessment of the ecological status of the designated wetland, which would allow definitive assessment of the impact of the management measures taken. Broadening the management approach to reflect scientific and socio-economic issues more strongly is considered one of the key challenges for the future conservation of wetlands. 47 39

Ramsar Convention COP 9, Resolution IX.1 Annex A: A conceptual framework for the wise use of wetlands and the maintenance of their ecological character [2005]. partly superseding Ramsar Convention COP 5, Resolution 5.6: The wise use of wetlands [1993]. see also Ramsar Convention COP 4, Recommendation 4.10: Guidelines for the implementation of the wise use concept [1990].

40

Finlayson, C. M. et al., “The Ramsar Convention and Ecosystem-Based Approaches to the Wise Use and Sustainable Development of Wetlands,” Journal of International Wildlife Law & Policy 14, no. 3-4 (2011) 176-198: 185.

41

Ramsar Convention COP 9, Resolution IX.1 Annex A: A conceptual framework for the wise use of wetlands and the maintenance of their ecological character [2005]. partly superseding Ramsar Convention COP 5, Resolution 5.6: The wise use of wetlands [1993]. see also Ramsar Convention COP 4, Recommendation 4.10: Guidelines for the implementation of the wise use concept [1990].

42

See also Ramsar Convention COP 7, Resolution VII.6: Guidelines for developing and implementing national wetland policies [1999]; Ramsar Convention COP 7, Resolution VII.7: Guidelines for reviewing laws and institutions to promote the conservation and wise use of wetlands [1999].

43

Ramsar Convention COP 7, Resolution VII.20: Priorities for wetland inventory [1999].

44

Ramsar Convention COP 6, Resolution VI.1: Working definitions of ecological character, guidelines for describing and maintaining the ecological character of listed sites, and guidelines for operation of the Montreux Record [1996].

45

Ramsar Convention COP 8, Resolution VIII.14: New guidelines for management planning for Ramsar sites and other wetlands [2002].

46 47

Ramsar Convention COP 8, Resolution VIII.17: Guidelines for global action on peatlands [2002].

Directorate General of Forest Protection and Nature Conservation at the Ministry of Forestry of the Republic of Indonesia. “National report on the implementation of the Ramsar Convention on wetlands.” 2011, 10 foll.

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RED does not designate wetlands itself. However, this is not necessarily non-compliant with the Ramsar Convention, as it cannot be expected that every measure by a Contracting Party touching on wetlands does so. In fact, declaration of wetlands and peatland as no-go areas may reinforce the level of protection awarded to designated wetlands. Wetland ecosystems are declining faster than other ecosystems. 48 Governance deficits have been identified as a key issue in the implementation of the Ramsar Convention, with short-term economic benefits taking precedence. 49 In common with other international agreements, the Ramsar Convention mainly relies on capacity building and reporting for compliance control, rather than hard sanctions. Thus, the declaration as no-go area could provide additional safeguards for the protection of wetlands, designated under the Ramsar Convention or not. Moreover, the limitations under RED place clearer boundaries on an abuse of wise use in order to exploit wetlands and peatland at the expense of the conservation purpose.



10.6 Hybrid goals: the International Tropical Timber Organisation

The International Tropical Timber Organisation (ITTO) was established in 1986 under the auspices of the UN, and can be traced back to the 1976 International Tropical Timber Agreement (ITTA). Currently, the ITTO administers the ITTA 1994, awaiting the farther–reaching ITTA 2006 to enter into force.50 The ITTO’s members, which include both exporting (producing) and importing (consuming) countries (Art. 4 ITTA) as well as the European Union (Art. 5 ITTA), represent about 80% of the world’s tropical forests and 90% of the global tropical timber trade. The ITTO standards are relevant for the conflicts around bioenergy because traded timber can serve as energy source, but also because sustainable forest management may limit deforestation and cultivation for energy. However, the standards provided by the ITTO do not present a high benchmark for the sustainability criteria, which exclude primary forest and other wooded land (Art. 17 (3) (a); (4) (b), (c) RED). The ITTO is not only an agreement on sustainable forestry (Art. 1 (f), (i), (l) ITTA), but also a trading agreement (e.g. Art.  1 (b), (d), (e) ITTA). In fact, the focus of the ITTO appears to be on trade and economic interests, while its environmental standards are rather soft. Members are encouraged to introduce national legislation on sustainable forest manage48

Millenium Ecosystem Assessment (MA). “Ecosystems and Human Well-Being: Wetlands and Water.” Washington, 2005.

49

Ramsar Convention Secretary General. “Report on the implementation of the Convention at the global level at COP 11 (Bucharest).” Ramsar Convention, 2012.

50

So far, an insufficient number of members has ratified the agreement for it to enter into force. The ITTA 2006 expands the scope of application to poverty alleviation and community rights, forest law enforcement, non-timber products, environmental services, voluntary certification.

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ment (Art. 1 (l) ITTA). However, the ITTA only requires members to “use their best endeavours” (Art. 32 (1) ITTA) in achieving the agreement’s objectives. The ITTO has drafted several non-binding guidelines, which were not voted upon by the contracting parties, such as for the sustainable management of natural tropical forests51 and on the conservation of biological diversity in tropical production forests.52 The ITTO has also published guidelines on sustainable forest management together with other organisations, in particular the ITTO/IUCN Guidelines for the conservation and sustainable use of biodiversity in tropical timber production forests,53 and the ITTO guidelines for the restoration, management and rehabilitation of degraded and secondary forests.54 While these guidelines may influence the practice of forest management, they do not have the same weight as if they were undertaken within the institutions of the ITTO. Overall, the environmental standards are not far reaching. The distribution of votes according to market shares (Art. 10 ITTA) favours countries with high consumption that are interested in cheap timber, and exporting countries where international trade is often seen as an opportunity for economic development (i.e. mainly developing and newly industrialised countries).55 Thus, a re-balancing towards environmental integrity and the meaningful control of non-compliance seem unlikely.



10.7 The climate change regime

The United Nations Framework Convention on Climate Change (UNFCCC), negotiated at the 1992 Rio Earth Summit, and its Kyoto Protocol (KP) are aimed at the stabilisation of GHG concentrations to a level that avoids a dangerous anthropogenic disturbance of the climate system (Art. 2 UNFCCC). As most human activities emit some greenhouse gases, the con51

The Guidelines include general policy (principle 1-1), standards for forest management (principle 11-33) and socio-economic (principle 34-35) and financial aspects (principle 36-37) of forest management. In particular, a policy shall preserve a permanent forest cover (principle 6 and 7), damages by unsuitable logging (principle 21-25) and the forest shall be protected from slash and burn clearance (principle 26-27).

52

These have been both praised for detailed provisions and chastised for overly general provisions Hönerbach, F., Verhandlungen einer Waldkonvention: Ihr Ansatz und ihr Scheitern (Berlin: Wissenschaftszentrum für Sozialforschung, 1996), 16.

53

ITTO and IUCN, Guidelines for the conservation and sustainable use of biodiversity in tropical timber production forests [2006].

54

ITTO, et al., Guidelines for the restauration, management and rehabilitation of degraded and secondary tropical forests [2010].

55

König, D. “New approaches to achieve sustainable management of tropical timber.” In Enforcing environmental standards: economic mechanisms as viable means?, edited by Wolfrum, R., 336-371. Berlin, Heidelberg, New York: Springer, 1996, 352.

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vention embraces most human activities.56 Thus, the climate change regime addresses both the expansion of bioenergy to replace fossil fuels, but also their limitations in order to obtain a negative carbon balance over the one of fossil fuels. The sustainability criteria of Art. 17 to 19 RED certainly comply with the broad goal of the UNFCCC. Like other MEAs, the UNFCCC does not contain hard targets for climate change mitigation. As a framework convention, it only contains general commitments.57 Art. 3 sets out several principles, stipulating that Contracting Parties shall be guided by the interests of current and future generations, take precautionary measures, and promote sustainable development (Art. 3 (1), (3), (4) UNFCCC). In common with other MEAs, the commitments under the UNFCCC are mainly process-oriented. The instruments are only broadly outlined (see Art. 4 UNFCCC). Some guidance is given on the limits of climate change mitigation policy, requiring Contracting Parties to minimise adverse effects for example on the environment (Art. 4 (1) (f) UNFCCC). Interestingly, the sustainability criteria stand next to instruments under other climate policy measures furthering the same goal, in particular the Clean Development Mechanism (CDM) which under certain circumstances addresses Land Use, Land Use Change and Forestry (LULUCF). In fact, the sustainability criteria could contribute to reinforce these instruments. The Kyoto Protocol (KP) to the UNFCCC allows Annex I states, industrialised countries that agreed to GHG emission reduction commitments (see Art. 4 (2) UNFCCC), to achieve these reductions by so called flexible mechanisms. One of them is the Clean Development Mechanism (CDM, Art. 12 KP). The Kyoto Protocol, including the flexible mechanisms such as CDM has been rendered operational at COP6 and 7 through the Bonn Agreement58 and several decisions known as the Marrakesh Accords.59 The application of these flexible mechanisms has been extended to the second KP commitment period beyond 2012.60 56

Sands, P., “The United Nations Framework Convention on Climate Change,” Review of European Community & International Environmental Law 1, no. 3 (1992) 270-277: 271.

57

Bothe, M., “The United Nations Framework Convention on Climate Change – an unprecedented multilevel regulatory challenge,” Heidelberg Journal of International Law 63(2003) 239-254: 240.

58

UNFCCC COP 6 (Bonn), Decision 5/CP.6: the Bonn Agreements on the implementation of the Buenos Aires Plan of Action, FCCC/CP/2001/5 [2001].

59

UNFCCC COP7/MOP1, The Marrakesh Accords, FCCC/CP/2001/13/Add. 1 [2001]. For example UNFCCC COP 7, Decision 16/CP.7: Guidelines for the implementation of Article 6 of the Kyoto Protocol, FCCC/ CP/2001/13/Add.2 [2001]; UNFCCC COP 7, Decision 11/CP.7: Land use, land use change and forestry, FCCC/CP/2001/13/Add.1 [2001]; UNFCCC COP 7, Decision 17/CP.7 Modalities and procedures for a clean development mechanism, as defined in Article 12 of the Kyoto Protocol, FCCC/CP/2001/13/Add.2 [2001]. See also den Elzen, M. G. J. and de Moor, A. P. G., “Analyzing the Kyoto Protocol under the Marrakesh Accords: economic efficiency and environmental effectiveness,” Ecol. Econ. 43, no. 2–3 (2002) 141-158.

60

Para. 6 (b), (c) KP; UNFCCC/KP COP/MOP 6, Decision 1/CMP.6: The Cancun Agreements: Outcome of the work of the ad hoc working group on further commitments for Annex I Parties under the Kyoto Protocol at its fifteenth session FCCC/KP/CMP/2010/12/Add.1 [2011]; UNFCCC/KP COP/MOP 6, Decision 2/

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Under CDM, Annex I states can engage in and finance climate change mitigation measures in resource countries, where projects may be implemented with greater economic efficiency,61 in order to attain their own emission reduction targets (Art. 12 (2) KP).62 Emission reduction projects earn certificates from CDM, so called certified emission reductions (CER), increasing the total assigned amount of emissions assigned to the Annex I state. CERs can be used by industrialised countries to meet their reduction targets (Art. 3 (10), (11) KP) and can be traded under the Kyoto Protocols emission trading system (Art. 17 KP).63 Accordingly, Annex I states are acting in their own interest when cooperating with developing countries.64 At the same time, developing and newly industrialised countries benefit because CDM promotes investment, enabling measures of sustainable development that might otherwise not be realised due to a lack of funds.65 Under certain circumstances, measures on Land Use, Land Use Change and Forestry (Art. 2, 3 (3), 4 (1), (2) KP)66 can be taken into account for CDM measCMP.6: The Cancun Agreements: Land use, land-use change and forestry FCCC/KP/CMP/2010/12/Add.1 Para 1 [2011]. However, the demand for Certified Emission Reductions (CER) is estimated to be low after the Copenhagen Accord by Geldhof, W. and Deruytter, T., “The Copenhagen Accord and the Clean Development Mechanism: an assessment of the legality of CDM projects and the likely demand for CERs after 2012,” International Business Law Journal 5(2010) 467-484. This will be all the more so as the EU is restricting the trade of CERs within the European Emission Trading System. Scott, J., “EU climate change unilateralism,” European Journal of International Law 23, no. 2 (2012) 469-494: 471. 61

The Clean Development Mechanism is based on the idea that it is irrelevant where greenhouse gas savings are effectuated, so that greenhouse gas emission savings may be made where it is economically most efficient (see also Art. 3 n. 3 subpara. 2 UNFCCC) Guidi, D. and Best, G. “The Clean Development Mechanism: implications for energy and sustainable agriculture and rural development projects.” Rome: FAO, 2003, 2.

62

Freestone, D. “The UN Framework Convention on Climate Change, the Kyoto Protocol, and the Kyoto Mechanisms.” In Legal aspects of implementing the Kyoto Protocol Mechanisms: making Kyoto work, edited by Freestone, D. and Streck, C., 3-23. Oxford: Oxford University Press, 2005, 11.

63

UNFCCC/KP (COP/MOP 1), Decision 11/CMP.1 Modalities, rules and guidelines for emissions trading under Article 17 of the Kyoto Protocol, FCCC/KP/CMP/2005/8/Add.2 [2005]. See Donehower, J., “Analysing carbon emissions trading: a potential cost efficient mechanism to reduce carbon emissions,” Envtl. L. 38, no. 3 (2008) 177-207; Carr, C. and Rosembuj, F., “Flexible mechanisms for climate change cmoplianct: emission offset purchases under the Clean Development Mechanism,” N.Y.U. Envtl. L.J. 16(2008) 44-62.

64

Prouty, A. E., “The Clean Development Mechanism and its implications for climate justice,” Colum. J. Envtl. L. 34(2009) 513-540: 514. See UNFCCC COP 7, Decision 17/CP.7 Modalities and procedures for a clean development mechanism, as defined in Article 12 of the Kyoto Protocol, FCCC/CP/2001/13/Add.2 [2001].

65

Halvorssen, A. M., “The Kyoto Protocol and developing countries – the Clean Development Mechanism,” Colo. J. Int’l Envtl. L. & Pol’y 16, no. 1 (2005) 353-375.

66

Further provisions have been introduced by the Marrakesh Accords, UNFCCC COP 7, Decision 11/CP.7: Land use, land use change and forestry, FCCC/CP/2001/13/Add.1 [2001].

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ures.67 Under LULUCF, the emissions removed by sinks, measured as verifiable changes in carbon stocks since 1990, are subtracted from the concerned Annex I states’ assigned emissions, effectively increasing the emission allowance (Art. 3 (3) KP).68 However, only some activities are covered: Art. 3 (3) KP addresses afforestation, reforestation and deforestation.69 Of those, only afforestation and reforestation are eligible for CDM in the first commitment period (2008 to 2012).70 Afforestation is the planting, seeding or promotion of natural seed sources on land that has not been forested for at least 50 years,71 whereas reforestation is the conversion of land to forest after having had another use before 1990.72 The term forest, which is a prerequisite for both notions, is defined very broadly according to the area covered, crown cover and tree height.73 The details such as 67

Ibid., 13; UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/ KP/CMP/2005/8/Add.3 [2005], Annex para. 13; UNFCCC COP 6 (Bonn), Decision 5/CP.6: the Bonn Agreements on the implementation of the Buenos Aires Plan of Action, FCCC/CP/2001/5 [2001], Annex VI. 3, 8, VII, 7. The decisions of LULUCF also apply within the CDM: UNFCCC COP 9, Decision 19/CP.9: Modalities and procedures for afforestation and reforestation project activities under the clean development mechanism in the first commitment period of the Kyoto Protocol, FCCC/CP/2003/6/Add.2 [2003], para. 1.

68

UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/KP/ CMP/2005/8/Add.3 [2005], Annex 2, para. 17.

69

See also UNFCCC COP 4, Decision 9/CP.4: Land use, land-use change and forestry, FCCC/CP/1998/16/ Add.1 [1998]; UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/KP/CMP/2005/8/Add.3 [2005], Annex para. 3. Nonetheless, Annex I states may choose to include other activities such as revegetation, forest management, cropland management, grazing land management, but only outside CDM. UNFCCC COP 7, Decision 11/CP.7: Land use, land use change and forestry, FCCC/CP/2001/13/Add.1 [2001], Annex para. 6; UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/KP/CMP/2005/8/Add.3 [2005], Annex para. 6.

70

UNFCCC COP 7, Decision 11/CP.7: Land use, land use change and forestry, FCCC/CP/2001/13/Add.1 [2001], 13; UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/ KP/CMP/2005/8/Add.3 [2005], Annex para. 13. On the definitions, see Mendez, M. A. and Popkin, B. “Globalisation, urbanisation and nutritional change in developing world.” In Globalisation of food systems in developing countries – impact on global food security and nutrition, edited by FAO, 55-80. Rome: FAO, 2004, 16 foll.

71

UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/KP/ CMP/2005/8/Add.3 [2005], Annex para. 1b).

72

Ibid., Annex para. 1c). The base year of 1990 both divests land forested previous to 1990 of its status as forests and prevents countries from counting business-as-usual activities, such as commercially deforesting land and leaving it to “naturally” regenerate, towards their Kyoto commitments. Aguirre, G. J., “Why cutting down trees is part of the problem, but planting trees isn’t always part of the solution – how concepualizing forests as sinks can work against Kyoto,” Or. Rev. Int’l L. 11, no. 1 (2009) 205-224: 209.

73

Forest is defined as “a minimum area of land of 0.05–1.0 hectare with tree crown cover (or equivalent stocking level) of more than 10–30 per cent with trees with the potential to reach a minimum height of 2–5 metres at maturity in situ. A forest may consist either of closed forest formations where trees of various storeys and undergrowth cover a high proportion of the ground or open forest. Young natural

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canopy cover show that the definition in the climate change regime has served as a model for the definition of continuously forested areas and wooded lands in Art. 17 (4) (b), (c) RED, which similarly focusses on quantitative rather than qualitative measures, for example on the number of trees rather than the quality, location, proximity and the core forest, which are particularly important for biodiversity.74 While RED certainly aligns with the definition of forest under the UNFCCC, an opportunity has been lost to incorporate the importance of biodiversity into the protection of forests as carbon sinks. Moreover, the sustainability criteria do not reverse the incentive given by afforestation and reforestation which currently favours cheaper (monocultural) plantation over forest management, preservation and conservation.75 Accordingly, the use of LULUCF, focussing on carbon sinks without reference to biodiversity, is somewhat controversial. Another criticism is that the conservation of carbon sinks is a relatively low cost measure, which reduces the incentive to reduce emissions within the Annex I state, potentially allowing net GHG emissions reduction requirements to be met without making lasting contributions to climate change mitigation.76 Moreover, the positive effects of CDM overall have been called into question. It could provide disincentives for development in resource states,77 or certificates may be awarded for projects that would have been achieved anyway, therefore lacking additionality.78 Moreover, no requirements are made for procedural safestands and all plantations which have yet to reach a crown density of 10–30 per cent or tree height of 2–5 metres are included under forest, as are areas normally forming part of the forest area which are temporarily unstocked as a result of human intervention such as harvesting or natural causes but which are expected to revert to forest”. UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/KP/CMP/2005/8/Add.3 [2005], Annex para. 1a.. According to UNFCCC/KP COP/ MOP 6, Decision 2/CMP.6: The Cancun Agreements: Land use, land-use change and forestry FCCC/KP/ CMP/2010/12/Add.1 Para 1 [2011]. the definitions still apply in the second commitment period. 74

Aguirre, G. J., “Why cutting down trees is part of the problem, but planting trees isn’t always part of the solution – how concepualizing forests as sinks can work against Kyoto,” Or. Rev. Int’l L. 11, no. 1 (2009) 205-224: 218.

75

Ibid. Graichen, P., “Can forestry gain from emissions trading? Rules governing sinks projects under the UNFCCC and the EU Emissions Trading System,” Review of European Community & International Environmental Law 14, no. 1 (2005) 11-18: 18. Rousseaux, S., “Carbon siks in the Kyoto Protocol’s Clean Development Mechanism: an obstacle to the implementation of the Convention on Biological Diversity,” Environmental Law Review 7, no. 1 (2005) 1-11.

76

Sagemüller, I., “Forest sinks under the United Nations Framework Convention on Climate Change and the Kyoto Protocol: opportunity or risk for biodiversity,” Colum. J. Envtl. L. 31, no. 2 (2006) 189-242: 196.

77

Voigt, C., “Is the Clean Development Mechanism sustainable? Some critical aspects,” Sustainable Development Law & Policy 15, no. 8 (2008) 15-21: 17.

78

UNFCCC/KP COP/MOP 1, Decision 9/CMP.1: Guidelines for the implementation of Article 6 of the Kyoto Protocol, FCCC/KP/CMP/2005/8/Add.2 [2005], para. 4a. Schneider, L. “Is the CDM fulfilling its environmental and sustainable development objectives? an evaluation of the CDM and options for improvement.” Berlin: Öko-Insitut, 2007, 27 foll; Zhang, J. and Wang, C., “Co-benefits and additionality of the clean development mechanism: An empirical analysis,” J. Environ. Econ. Manage. 62, no. 2

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guards such as an environmental impact assessment. Accordingly, some studies have found that the fast creation of CERs was undertaken at the expense of environmental or development concerns.79 Moreover, measures under the climate change regime have the effect of maximizing the generation of CDM certificates rather than on promoting sustainable development.80 This demonstrates that the ecological dimensions in climate policies are not fully respected.81 Again, this gap is not closed by the sustainability criteria. As with the climate change regime, the GHG emission reduction requirements are dissociated from biodiversity considerations. RED at least introduced additional criteria excluding certain ecosystems, although requirements on their viability or on environmental impact assessments are similarly lacking.



10.8 Conclusion

The international law touching on bioenergy is very diverse, with regulatory density ranging from policy advice and making information available, through providing guidelines, to binding requirements. MEAs for a large part set only general obligations in order to achieve their objectives, and the instruments available for ensuring compliance are very limited. Rather than hard targets, they focus on process requirements. This leaves considerable leeway to the Contracting Parties in implementation. Both in the MEAs themselves and in COP decisions, binding or not binding, requirements or recommendations for contracting parties are often phrased as process requirements. Accordingly, the framework set by international environmental law does not set demanding minimum standards to which the sustainability criteria could be held. Even where the sustainability criteria fall short of requirements in MEAs, such as on the designation of wetlands or environmental impact assessment, it cannot reasonably expected that every national or European measure fulfils all (2011) 140-154. Amatayakul, W. and Berndes, G., “Determining factor for the development of CDM biomass power projects,” Energy for Sustainable Development 16, no. 2 (2012) 197-203. On the efforts to limit such windfall, see UNFCCC COP 7, Decision 11/CP.7: Land use, land use change and forestry, FCCC/ CP/2001/13/Add.1 [2001], 59f; UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/KP/CMP/2005/8/Add.3 [2005], Annex para. 14. UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/KP/CMP/2005/8/Add.3 [2005], para. 1f, g). 79

Lövbrand, E., Rindefjäll, T., and Nordqvist, J., “Closing the Legitimacy Gap in Global Environmental Governance? Lessons from the Emerging CDM Market,” Global Environmental Politics 9, no. 2 (2009) 74-100; Olsen, K. H., “The Clean Development Mechanism’s contribution to sustainable development: a review of the literature,” Clim. Change 84(2007) 59-73.

80

Voigt, C., “Is the Clean Development Mechanism sustainable? Some critical aspects,” Sustainable Development Law & Policy 15, no. 8 (2008) 15-21: 18.

81

van Asselt, H., Gupta, J., and Biermann, F., “Advancing the climate agenda: exploiting material and institutional linkages to develop a menu of policy options,” Review of European Community & International Environmental Law 14, no. 3 (2005) 255-264: 259.

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targets of the MEAs in question. Nonetheless, an expansion of the sustainability criteria into these matters would have meant a more holistic approach to the side effects of bioenergy. On the other hand, the sustainability criteria could reinforce international environmental law, which mainly relies on non-confrontational reporting requirements rather than comprehensive compliance mechanisms with topdown sanctions or external monitoring,82 as well as the facilitation of compliance. Nonetheless, declaration of protection zones and areas designated by intergovernmental institutions as no-go areas according to Art. 17 (3) b) RED could strengthen the protection of these areas. The incentive of the sustainability criteria, tying support schemes to compliance (Art. 17 (1) RED), also promotes the protection of ecosystems (Art. 8 (d) CBD). By making the conservation status part of the sustainability criteria, an incentive to comply with the area designation is introduced, which could potentially contribute to compensating compliance deficits in national and international law. However, so far, no data exists on this issue. The sustainability criteria could provide a more robust mechanism, but considering the very limited scope of the sustainability criteria, which focus on excluding ecosystems and a certain GHG emission balance without consideration for the broader systemic issues of these ecosystems, the impact of the sustainability criteria to this regard can be expected to be limited. In particular, although the various agreements cannot require that all national or European measures comply with all goals of the agreement in question, numerous criteria raised in the MEAs could have been incorporated into the sustainability criteria.

82

Kiss, A. “Reporting obligations and assessment of reports.” In Ensuring compliance with multilateral environmental agreements, edited by Beyerlin, U., Stoll, P.-T., and Wolfrum, R., 229-246. The Hague: Martinus Nijhoff, 2006, 229; Bothe, M. “Ensuring compliance with multilateral agreements – Systems of inspection and external monitoring.” In Ensuring compliance with multilateral environmental agreements, edited by Beyerlin, U., Stoll, P.-T., and Wolfrum, R., 247-258. The Hague: Martinus Nijhoff, 2006, 251.

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Compliance with World Trade Law

chapter 11

compliance with world trade law

In the same way as international and European environmental law sets certain minimum standards for the sustainability criteria, international trade law can be seen as setting a ceiling for them. The World Trade Organisation (WTO) is an umbrella organisation for various trade agreements. The EU and all of its Member States are contracting parties to the WTO agreement, due to the system of the distribution of competences in the TFEU.1 The WTO aims to achieve higher welfare, sustainable development, preserving and protecting the environment through trade liberalisation (Preamble WTO-Agreement). However, trade-related environmental measures (TREMs) have been considered a gateway for unwanted protectionism.2 Accordingly, the sustainability criteria have to be tested against several multilateral trade agreements, notably the subsidies regime as well as the Agreement on Technical Barriers in Trade (TBT-Agreement) and the General Agreement on Tariffs and Trade (GATT 1994) governing the international trade in goods.



11.1 The subsidies regime

According to Art. 17 (1) RED, compliance with the sustainability criteria is a condition in order to benefit from certain support schemes. Thus, the sustainability criteria are inseparably linked to the enumerated support mechanisms, renewable energy obligations (quotas) and financial support for the consumption of biofuels and bioliquids. As such, the sustainability criteria have to be assessed under the WTO subsidy regime. Subsidies under the WTO are governed either by the Agreement on Agriculture (AoA) or by the Agreement on Subsidies and Countervailing Measures (SCM-Agreement). The SCM-Agreement applies to subsidies according to Art. 1, 2 SCM-Agreement, i.e. financial contributions by a public body, providing a benefit (i.e. an advantage compared to competitors), which is specific (i.e. directed at a certain company, industry or group of companies or industries). The Agreement on Agriculture (AoA) applies to domestic support linked to agricultural production (Art. 1 Annex I AoA). Accordingly, the AoA is lex specialis for certain subsidies (Art. 3.1 SCM-Agreement, Art. 21.1 AoA).3 The 1

Art. 2 TFEU, Art. 2 TFEU; ECJ, Opinion 1/94 on the Competence of the Community to conclude international agreements concerning services and the protection of intellectual property – Article 228 (6) of the EC Treaty [1994] ECR I-5267.; see also Art. XII:1 WTO-Agreement.

2

Bodansky, D. and Lawrence, J. C. “Trade and environment.” In The Oxford handbook of international trade law, edited by Bethlehem, D., et al., 505-538. Oxford, New York: Oxford University Press, 2009, 512 foll.

3

Appellate Body Report, US – Upland Cotton WT/DS267/AB/R [adopted on 21/3/2005], 532. McMahon, J. A., The WTO Agreement on Agriculture (Oxford: Oxford University Press, 2006), 18 foll. However, in Appellate Body Report, US – Upland Cotton WT/DS267/AB/R [adopted on 21/3/2005], 549. the Appellate Body also states that both agreements could be read together giving full and effective meaning to both.

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application of the relevant law depends on the tariff classification in the Harmonised Commodity Description and Coding System (HS, Annex AoA). 4 With no distinct tariff classification for biofuels and bioliquids, ethanol made from sugar contents of plants falls under the AoA (Art. 2 Annex I AoA), while biodiesel, extracted chemically from oil crops, is classified as an industrial product and would be governed only by the SCM-Agreement.



11.1.1 Agreement on Agriculture

Under the AoA, applying to bioethanol, subsidies are discussed under the notion of domestic support. Domestic support is defined in the context of the Aggregate Measurement of Support (AMS) as “the annual level of support, expressed in monetary terms, provided for an agricultural product in favour of the producers of the basic agricultural product or non-product-specific support provided in favour of agricultural producers in general” (Art. 1 (a) AoA). Domestic support is classified according to colours of a traffic light: trade neutral and therefore permissible domestic support are in the “green box” (Annex 2 AoA), trade distorting support is in the “amber box” (Art. 6 AoA), where contracting parties have to observe reduction commitments.5 Under the Green Box, no specific exception exists for biofuel support schemes, tax exemptions, quotas or financial support, but could be considered as an environmental programme, where a Contracting Party establishes that the production of biomass for energy is an environmental good, furthering the mitigation of climate change.6 However, the national support schemes will have to be clearly defined and payments not exceed extra costs (Annex 2 n. 12 (a), (b) AoA). Domestic support measures in the green box have to be provided through a publicly funded government program and shall not have the effect of providing price support to producers (Annex 2 (1) AoA). As no payments are made under quota schemes, no justification would be required for renewable energy obligations (Art. 17 (1) (c) RED). The same can be argued for other financial support schemes according to Art. 17 (1) (b) RED, only covering the financial support for the consumption. Other national support schemes can be drafted to comply with the Green Box requirements. 4

Switzer, S. and McMahon, J. A., “EU biofuels policy – raising the question of WTO compatibility,” International & Comparative Law Quarterly 60, no. 3 (2011) 713-736: 719. On a potential harmonisation of HS classifications see Weiß, W., “Biofuels and WTO law,” European Yearbook of International Economic Law 2(2011) 169-203: 172.

5

McMahon, J. A., The WTO Agreement on Agriculture (Oxford: Oxford University Press, 2006), 67 foll; Josling, T. and Blandford, D. “Biofuels subsidies and the green box.” Chap. 18 In Agricultural subsidies in the WTO Green Box, edited by Meléndes-Ortiz, R., Bellmann, C., and Hepburn, J., 530-568. Cambridge: Cambridge University Press, 2009, 531.

6

Critical Josling, T. and Blandford, D. “Biofuels subsidies and the green box.” Chap. 18 In Agricultural subsidies in the WTO Green Box, edited by Meléndes-Ortiz, R., Bellmann, C., and Hepburn, J., 530-568. Cambridge: Cambridge University Press, 2009, 561.

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11.1.2 Agreement on Subsidies and Countervailing Measures

In Art. 1, 2 SCM-Agreement, a subsidy is defined as a financial contribution by a public body, providing a benefit (i.e. an advantage compared to competitors), which is specific (i.e. directed at a certain company, industry or group of companies or industries). Broader than Art. 107 TFEU, the SCMAgreement’s definition of a subsidy explicitly includes a financial contribution by a public authority where a private entity has been entrusted and directed to confer a benefit.7 As for Art. 107 TFEU (see above, section 2.2.2.3), the legislation of quotas does not fall within the subsidies definition. Even for the legislation of financial support, it is doubtful whether the scope of application of the sustainability criteria according to Art. 17 (1) RED fulfils the definition of a subsidy. In particular, the financial contribution has to result in a benefit to the industry (“thereby”, Art. 1 b) SCM-Agreement), the benefit of the support of the consumption (Art. 17 (1) (b) RED) may be too remote and indirect – to consider this a subsidy would risk encompassing all public activities into the definition.8 Besides, the Member States, which are in charge of drafting the support mechanisms have a great flexibility in doing so and these mechanisms could be adapted where necessary to comply with the SCM-Agreement.



11.2 The General Agreement on Tariffs and Trade

The sustainability criteria must also be tested for compatibility with the General Agreement on Tariffs and Trade (GATT). GATT aims at trade liberalisation, promoting the reduction of tariffs and the elimination of tariffary and non-tariffary boundaries (NTBs). The sustainability criteria could be violating the obligations of contracting parties not to accord less favourable treatment to imported than to domestic like products (Art. III:4 GATT), or alternatively, the obligations of contracting parties regarding instituting prohibitions or restrictions on the importation of imports (Art. XI:1 GATT).



11.2.1 Internal measure or import regulation

Art. XI or III:4 GATT are mutually exclusive. The national treatment clause (Art. III GATT) seeks to eliminate discrimination, while Art. XI GATT is used to eliminate quantitative restrictions and other measures to 7

Appellate Body Report, US – DRAMS WT/DS296/AB/R [adopted on 20/7/2005], para. 110-116, 118. Moreover, the benefit conferred does also not have to stem from public funds under the SCM-Agreement. Appellate Body Report, Canada – Aircraft, WT/DS70/AB/R [adopted on 4/8/2000], para. 154 to 157, 160.

8

Criticising a broad inclusion of potential benefits into the subsidy definition is also Henschke, L., “Going it alone on climate change: a new challenge to WTO subsidies disciplines: are subsidies in support of emission reductions schemes permissible under the WTO,” World Trade Review 11, no. 1 (2012) 27-52: 42.

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this effect. The distinction is essential as Art. XI GATT not only requires equal treatment of like products, but also prohibits all (quantitative) restrictions to market access.9 In order to give both provisions independent scopes of application, Art. XI GATT should only apply if a restriction is effective because of, and not only on occasion of, the importation.10 The sustainability criteria apply to domestic and imported goods when these are in the jurisdiction of the EU, the application to imported goods only incidentally starts at the border of the Member States. Accordingly, the sustainability criteria are internal measures, also affecting imported goods, falling in the ambit of Art. III GATT. In particular, a violation of Art. III:4 GATT has to be considered. Art. III:4 GATT applies to measures which can potentially lead to unequal market conditions for domestic and imported goods,11 including not only prohibitions and import bans, but also to incentives provided where the benefit in question is granted under public control.12 Furthermore, where the national law of the Member States goes beyond the support schemes listed in Art. 17 (1) RED and extends the application of the sustainability criteria to tax exemptions, Art. III:2 GATT is also at stake.



11.2.2 “like product”

Under III:4 GATT no less-favourable treatment may be awarded to like imported products over domestic products. Not all differential treatment is excluded, but only discriminatory treatment of “like products”. The term “like product”, in this case between biofuels and bioliquids that are compliant or non-compliant with the sustainability criteria, has mainly been defined concerning Art. III:2 sentence 1 GATT.13 The likeness of the product is not determined based on the intent of the regulating state (aims and effect test),14 but based on whether a batch of products that are in competition or can 9

van den Bossche, P., The law and policy of the World Trade Organisation: text, cases and materials, 2nd ed. (Cambridge: Cambridge University Press, 2008), 447. Panel Report, Argentina – Bovine hides, WT/ DS155/R [adopted on 16/2/2001].para. 11.17.

10

Panel Report, EC – Asbestos, WT/DS135/R [adopted on 5/4/2001], para. 8.90 foll. see also interpretative note ad Art. III GATT: “when a domestic measure applies both to domestic and imported products, it is Art. III [opposed to Art. XI GATT] that is applicable”. Tarasofsky, R. G., “Heating up international trade law: challenges and opportunities posed by efforts to combat climate change,” Carbon and Climate Law Review 1, no. 1 (2008) 7-17.

11

Panel Report, EC – Bananas III, WT/DS27/R [adopted on 25/9/1997], para. 7.175.

12 13

Panel Report, Canada – Periodicals, WT/DS31/R [adopted on 30/6/1997], para. 5.36.

Appellate Body Report, Japan – Alcoholic beverages II, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R [adopted on 1/11/1996], para. 19-21; Appellate Body Report, EC – Asbestos, WT/DS 135/AB/R [adopted on 5/4/2001], para. 96.

14

Appellate Body Report, Japan – Alcoholic beverages II, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R [adopted on 1/11/1996], para. 18 foll; Howse, R. and Türk, E. “The WTO impact on internal regulations: a case study of the Canada-EC Asbestos dispute.” In Trade and human health and safety, edited by Bermann, G. A. and Mavroidis, P., 77-117. Cambridge: Cambridge University Press, 2006.

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be substituted for each other.15 Likeness is determined based on variety of different factors including (1) the properties, nature and quality of the products, (2) the end-uses of the products; (3) consumers’ tastes and habits (4) the tariff classification of the products, together with other pertinent evidence.16 The sustainability criteria apply to biofuels and bioliquids, and not to other forms of (bio) energy. In order to determine the likeness of compliant biofuels and bioliquids, the reference market has to be chosen before a categorisation can be made based on these criteria. Under this test, the physical characteristics play a key role: Products are unlike if they have different physical characteristics.17 However, in the case of the sustainability criteria, the physical properties of “sustainable” and “nonsustainable” biofuels and bioliquids are effectively identical. Only the Process and Production Method (PPM) differs. It is questionable how these PPM should be taken into account for the purpose of GATT. PPM that affect the product itself by changing the physical properties of the products in question lead to products being unlike, in line with the first element of the test for the likeness of products.18 However, the case is more complicated for non-product related PPM (nprPPM)19 such as the sustainability criteria, where production standards such as the no-go areas and GHG emission balance are not reflected in the product. If different adverse effects on the environment would be taken into account, they could be considered unlike despite effectively identical physical characteristics. In this case, the different products could be treated differently without requirement for justification under GATT. NprPPM are controversial under WTO law: they do not further the functionality of the product, but are ‘designed to achieve a social purpose’,20 and thus have the potential to embody or enable protectionism and blur the line between jurisdictions.21 Moreover, an inclusion of nprPPM into the determination of likeness would come close to an aims and effects test, 15

Appellate Body Report, Korea – Alcoholic beverages, WT/DS75/AB/R, WT/DS84/AB/R [adopted on 17/2/1999], para. 118; Appellate Body Report, EC – Asbestos, WT/DS 135/AB/R [adopted on 5/4/2001], 123.

16 17

Appellate Body Report, EC – Asbestos, WT/DS 135/AB/R [adopted on 5/4/2001], para. 101-103, 117, 133.

Ibid., para. 118 foll.

18

Ibid.

19

WTO Secretariat. “Trade and environment at the WTO.” Geneva: WTO, 2004, 17. The terminology on the subject is incoherent. In order to make clear that the controversy does not concern PPMs that relate to different physical characteristics, the terminology of Bodansky is followed here: Bodansky, D. and Lawrence, J. C. “Trade and environment.” In The Oxford handbook of international trade law, edited by Bethlehem, D., et al., 505-538. Oxford, New York: Oxford University Press, 2009, 525.

20

Charnovitz, S., “Law of environmental PPMs in the WTO: debunking the myth of illegality,” Yale Journal of International Law 27, no. 1 (2002) 59-110: 65.

21

Marceau, G. Z. and Trachtman, J. P. “A map of the World Trade Organisation law of domestic regulation of goods: the Technical Barriers to Trade Agreement, the Sanitary and Phytosanitary Measures Agreement and the General Agreement on Tariffs and Trade.” In Trade and human health and safety, edited by Berman, G. A. and Mavroidis, P. C., 9-76. Cambridge: Cambridge University Press, 2006, 55 foll.

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considering that Art. III GATT would only apply to protectionist measures,22 a test that has been rejected by the Appellate Body.23 Notably, the unadopted first Tuna/Dolphin ruling does not exclude nprPPM, but only refers to them in order to differentiate between Art. III and XI GATT, not regarding the likeness under Art. III GATT.24 A further argument for the inclusion of nprPPM into the ambit of Art. III GATT (and the TBT-Agreement) is that while physical characteristics are a criterion in determining the likeness of products, other criteria apply as well – in particular consumer preferences – which may be detached from the physical properties.25 However, no consensus among consumers is currently discernible, in particular regarding the sustainability criteria as contained in the RED. However, a decision on nprPPM would be unnecessary if the sustainability criteria could be considered justified under Art. XX GATT (see below). Notably, Art. XX GATT appears to be better suited to address the issues surrounding bioenergy as it provides a balanced approach to address issues arising from the application of regulation to imports and to prevent import regulation from going against the non-intervention principle.26



11.2.3 No less favourable treatment

Art. III:4 GATT requires “no less favourable treatment” to be awarded to like products. The sustainability criteria do not de jure treat imported produce differently to domestic produce. The formulation of the sustainability criteria is neutral, the criteria are explicitly applicable irrespective of the country of origin (Art. 17 (9) RED). In fact, the criteria for domestic produce are more stringent, as domestic producers are also required to comply with the standards of good agricultural practice under the Common Agricultural Policy.

22

GATT Panel Report, US – Malt Beverages DS23/R – 39S/206 [adopted on 19/6/1992], paras 5.25, 5.71; GATT Panel Report, US – Taxes on automobiles DS31/R (not adopted) [circulated on 11/10/1994], para. 5.9 foll.

23

Appellate Body Report, EC – Asbestos, WT/DS 135/AB/R [adopted on 5/4/2001], para. 113; Appellate Body Report, Japan – Alcoholic beverages II, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R [adopted on 1/11/1996], p. 17; Appellate Body Report, EC – Bananas III, WT/DS27/AB/R [adopted on 25/9/1997], para. 215.

24 25

GATT Panel Report, US – Tuna/Dolphin I (unadopted) [circulated on 3/9/1991] DS/21/R, para. 5.09-5.19.

Marceau, G. Z. and Trachtman, J. P. “A map of the World Trade Organisation law of domestic regulation of goods: the Technical Barriers to Trade Agreement, the Sanitary and Phytosanitary Measures Agreement and the General Agreement on Tariffs and Trade.” In Trade and human health and safety, edited by Berman, G. A. and Mavroidis, P. C., 9-76. Cambridge: Cambridge University Press, 2006, 9, 54.

26

Crosby, D. C. “Tilting at conventional WTO wisdom.” Chap. 6 In International trade regulation and the mitigation of climate change, edited by Cottier, T., Nartova, O., and Bigdeli, S. Z., 124-130. Cambridge: Cambridge University Press, 2009, 126.

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However, a formally equal treatment may nonetheless result in less favourable treatment, amounting to de facto discrimination.27 The land-related criteria could burden goods from third countries, if the side effects of bioenergy cultivation are limited to specific countries. Developing and newly industrialised countries harbour the majority of the non-agricultural arable land, and are also rich in biodiversity and carbon sinks.28 Moreover, socioeconomic issues occur to a greater extent in developing and newly developed countries. The calculation of the GHG emission balance could disadvantage countries with large carbon sinks and exports with longer transport routes and thus higher GHG emissions. However, even if a differential treatment would be deduced from this, a difference in treatment between imported and domestic products must be shown to result in less favourable treatment.29 A detrimental effect of a regulation on imports does not necessarily entail less-favourable treatment if it is explained by factors and circumstances unrelated of the origin of the product.30 In this case, any potential less-favourable treatment stems from reasons other than the origin of the produce. The no-go areas are intended to contribute to biodiversity protection, which only incidentally affects biodiversity-rich countries. Notably, the sustainability criteria do not specifically target biodiversity-resource states: the environmental side effects of bioenergy have also developed into a major issue in the EU Member States. In particular, corn and rapeseed monocultures have become an issue in the EU, as has the conversion of grassland.31 The GHG emission balance requirements of RED are based on international standards, in particular the IPCC guidelines for GHG inventories. When considering the default values, imported produce does not automatically fare worse: the standard value of soybean biodiesel is lower than that for (domestic) rapeseed biodiesel. The different default values are only a result of the consistent application of the calculation method. The limited number of available default 27

Appellate Body Report, Dominican Republic – Cigarettes, WT/DS302/AB/R [adopted on 19/5/2005], para. 94.

28

Lendle, A. and Schaus, M. “Sustainability criteria in the EU Renewable Energy Directive: consistent with WTO rules?”. Geneva: International Centre for Trade and Sustainable Development, 2010, 9.

29 30

GATT Panel Report, US – s. 337 Tariff Act 1930 [adopted on 7/11/1989], para. 5.11.

Appellate Body Report, Dominican Republic – Cigarettes, WT/DS302/AB/R [adopted on 19/5/2005], para. 96; Switzer, S., “International trade law and the environment: designing a legal framework to curtail the import of unsustainability produced biofuels,” Journal of International Trade Law and Policy 6, no. 1 (2007) 30-44: 37.

31

Nitsch, H. et al., “Cross compliance and the protection of grassland – Illustrative analyses of land use transitions between permanent grassland and arable land in German regions,” Land Use Policy 29, no. 2 (2012) 440-448. See also Banse, M. et al., “Impact of EU biofuel policies on world agricultural production and land use,” Biomass Bioenerg. 35, no. 6 (2011) 2385-2390: 2388 foll. Critical on the direct impact of biofuels in Europe, and stressing indirect effects Hellmann, F. and Verburg, P. H., “Spatially explicit modelling of biofuel crops in Europe,” Biomass Bioenerg. 35, no. 6 (2011) 2411-2424.

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values is a result of the state of scientific knowledge. Standard values for land use changes are also lacking for conversions within the EU. Finally, a de facto discrimination can also not be seen in the design of the compliance control mechanism, which was in fact designed flexibly to avoid discrimination. Compliance control is not undertaken by public authorities but by private certification systems benchmarked against the sustainability criteria. These voluntary schemes are international standards, developed by bodies with different vocations and regional focus. It is the economic operator that chooses the certification system most convenient to him. Moreover, recognitions of different compliance mechanisms are not only undertaken by individual Member States, but also by the Commission, which are valid across the entire EU. Thus, the administrative effort is kept at a minimum. In summary, while compliant and non-compliant biofuels and bioliquids can be considered like products, it is unlikely that a panel would establish differential treatment. However, even if a violation of Art. III GATT is found, the sustainability criteria could still be justified directly on environmental grounds, as will be discussed next.



11.2.4 Justification under Art. XX GATT

The WTO objective of free trade is not absolute. Environmental goals are to be taken into account (and according to the preamble are even the primary goals of the WTO). The WTO does not establish environmental standards to which its contracting parties are held. It instead establishes a ceiling for environmental measures enacted by the contracting parties, by establishing conditions under which individual environmental measures are justified. Art. XX GATT justifies infringements of GATT under certain conditions, construing an exception to the trade liberalisation goals in Art. III GATT. The protection of biodiversity and the stability of the climate or the environment in general is not addressed explicitly in Art. XX GATT. However, Art. XX GATT allows for the consideration of non-commercial interests,32 including environmental concerns under Art. XX b) and g) GATT,33 provided that they are not discriminatory, or a disguised restriction to international trade.



11.2.4.1 A measure necessary for the protection of human, animal or plant life or health

The sustainability criteria could be considered necessary to protect human, animal or plant life or health – which would constitute a justification under Art. XX b) GATT. Due to their effects on life and health, Art. XX b) GATT also covers environmental policy measures.34 Although biodiversity 32 33

Appellate Body Report, Korea – Beef, WT/DS161/AB/R [adopted on 1/1/2001], para. 164.

Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], para. 167 foll.

34

van den Bossche, P., Schrijver, N., and Faber, G. “Unilateral meassures adressing non-trade concerns – A study on WTO consistency, relevance of other international agreements, economic effectiveness and

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overall has not been addressed by the Appellate Body, individual elements have been,35 even though the focus of Art. XX b) GATT has been on human health.36 However, biodiversity can be considered the embodiment of animal and plant life and health. Moreover, the stability of the climate, addressed by the sustainability criteria, can be considered a precondition for life and health on earth. In the context of Art. XX b) GATT, the Appellate Body has referred – albeit in an orbiter dictum – to measures on the mitigation of climate change as an example for measures where the benefit to life and health required for a justification under Art. XX b) GATT can only be assessed after a period of time.37 Accordingly, the sustainability criteria seeking to ensure the climate change mitigation effect of the use of biofuels and bioliquids can fall in the scope of Art. XX b) GATT. In order to be justified under Art. XX b) GATT, the sustainability criteria (not the policy goal)38 have to be necessary for the protection of life or health. The determination of necessity is an objective one, with the burden of proof on the defending government.39 The necessity test is threefold, considering the importance of the protected interest, the measure’s contribution to achieve the value and the level of restriction for international trade. 40 Both biodiversity protection and the mitigation of climate change pursued under the heading of sustainable bioenergy (Recital 65 RED), have a high impact on the living conditions on Earth, and are thus essential for the protection of life or health. As a function of the risk and the objective pursued, necessity requires that there is a genuine relationship of ends and means between the objective pursued and the measure employed. 41 It could be argued that the sustainability criteria do not have sufficient impact to be considered necessary. However, the necessity test has to be put into the context of the right of Contracting Parties to determine the level of protection they consider appropriate, based on quality or quantity of risk. 42 In particular, the sustainability criteria are only part of a impact on developing countries of measures concerning non-product-related processes and production methods.” The Hague: Ministry of Foreign Affairs of the Netherlands, 2007, 98. 35

See for example Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998]. See also Panel Report, Brazil – Tyres, WT/DW332/R [adopted on 17/12/2007], para. 7.53, 7.84.

36

See for example Panel Report, EC – Tariff Preferences WT/DS246/R [adopted 20/4/2004], para. 7.210; GATT Panel report, Thailand – Cigarettes [adopted on 7/11/1990], para. 73; Appellate Body Report, EC – Asbestos, WT/DS 135/AB/R [adopted on 5/4/2001], para. 168.

37

Appellate Body Report, Brazil – Tyres, WT/DS332/AB/R [adopted on 17/12/2007], para. 151.

38

Panel Report, US – Gasoline, WT/DS2/R [adopted on 20/5/1996], para. 6.22.

39

Appellate Body Report, US – Gambling WT/DS285/AB/R [adopted on 20/4/2005], para. 309.

40

Appellate Body Report, Brazil – Tyres, WT/DS332/AB/R [adopted on 17/12/2007], para. 139-145; Appellate Body Report, US – Gambling WT/DS285/AB/R [adopted on 20/4/2005], para. 306.

41

Appellate Body Report, US – Gambling WT/DS285/AB/R [adopted on 20/4/2005], para. 145.

42

Appellate Body Report, EC – Asbestos, WT/DS 135/AB/R [adopted on 5/4/2001], para. 168. See also Appellate Body Report, Korea – Beef, WT/DS161/AB/R [adopted on 1/1/2001], para. 165.

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wider goal of sustainable bioenergy (Recital 68 RED). The numerous reporting and review requirements show that the goal of “sustainability” is not achieved by the criteria in their current form. The fact that substantial improvements can be made to the scheme does not preclude the fact that the measure, however limited, pursues an environmental objective. Otherwise, the necessity requirement would have to be understood in a way to prescribe a level of protection, for example an expansion of the criteria to all biomass, 43 which cannot be read into a justification of measures under Art. XX GATT. As such, the term necessity covers not only measures that are inevitable or absolutely necessary, but also measures that simply contribute the objective at hand. 44 Accordingly, a genuine relationship between the criteria and the environmental goal is demonstrated. Finally, a measure is necessary if no less-restrictive measure to achieve the same result is reasonably available. 45 This requires a weighing and balancing process of measures and values pursued. 46 Notably, the Appellate Body has considered as necessary much more restrictive measures than the incentive created by the sustainability criteria, depending on the importance of the objective and the contribution of the measure. 47 Considering the incentive used as a lever for compliance with the criteria, the limited scope, the concentration on highly biodiverse ecosystems and the private compliance control mechanism, a less trade-infringing alternative seems unlikely. Thus, even if the sustainability criteria would be considered discriminatory under Art. III:4 GATT, this would be justified by Art. XX b) GATT subject to the requirements of the chapeau.



11.2.4.2 The conservation of exhaustible natural resources

A justification is available under Art. XX g) GATT if the sustainability criteria “relat[e] to the conservation of exhaustible natural resources, if such measures are made effective in conjunction with restrictions on domestic production or consumption.” The sustainability criteria are applied in conjunction with restrictions on domestic goods, applying to both domestic and imported produce, even containing additional agricultural standards for domestic produce, thus clearly satis43

Switzer, S. and McMahon, J. A., “EU biofuels policy – raising the question of WTO compatibility,” International & Comparative Law Quarterly 60, no. 3 (2011) 713-736: 732.

44 45

Appellate Body Report, Korea – Beef, WT/DS161/AB/R [adopted on 1/1/2001], para. 161.

Appellate Body Report, EC – Asbestos, WT/DS 135/AB/R [adopted on 5/4/2001], 155-175. The Appellate Body also noted that this process ‘[I]nvolves in every case a process of weighing and balancing a series of factors which prominently include the contribution made by the compliance measure to the enforcement of the law or regulation at issue, the importance of the common interests of values protected by that law or regulation, and the accompanying impact of the law or regulation on imports or exports; (para. 164).

46 47

Ibid., para. 172.

Appellate Body Report, Brazil – Tyres, WT/DS332/AB/R [adopted on 17/12/2007], para. 150 foll.

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fying the Appellate Body’s requirements of even-handed, but not necessarily identical treatment. 48 The sustainability criteria also relate to the protection of natural resources. In defining natural resources, the Appellate Body took an evolutionary interpretation, stating that the term must be read “in the light of contemporary concerns of the community of nations about the protection and conservation of the environment”. Resources may be living or non-living and do not need to be rare or threatened to be considered exhaustible. 49 The determination is also made by reference to relevant international agreements in order to ascertain the understanding of the notion of exhaustible resources of the community of states. Notably, international agreements are even used for the interpretation where not all parties to the conflict before the WTO dispute settlement mechanism have ratified the agreements in question.50 Biodiversity, which according to Art. 1 CBD encompasses genetic, taxonomic and ecosystem biodiversity, indisputably falls under the definition of exhaustible resources. The climate can be considered a natural resource, but it could be called into question if it is an exhaustible resource. Climate changes have considerable impact on living conditions and natural resources. However, changes in the climate do not mean that it ceases to exist (see above, section 1.2.1). However, emissions of greenhouse gases could also be considered a threat to clean air.51 Clean air has been recognised as an exhaustible natural resource,52 suggesting that the reduction of GHG emissions falls within the scope of Art. XX g) GATT. The regulation of situations outside a state’s jurisdiction has been called into question for Art. XX g) GATT. The Panel in the (unadopted) Tuna/Dolphin II case has concluded that Art. XX may have extraterritorial, although not extrajurisdictional effect.53 Art. XX g) GATT can therefore be used to justify import regulation. However, a sufficient nexus has to exist between the protected good and the importing state, i.e. the protected good has to at least partly reside in 48

Appellate Body Report, US – Gasoline WT/D52/AB/R [adopted on 20/5/1996], para. 20 foll. See also Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], paras. 138-142, 143-145.

49

Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], para. 127 foll; Appellate Body Report, US – Gasoline WT/D52/AB/R [adopted on 20/5/1996], 19.

50

Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], para. 130. Notably, Art. 31 (3) (c) Vienna Convention on the Law of Treaties (VCLT), only requires to take into account other international agreements applicable in the relations between the parties (i.e. ratified by all parties) when interpreting international agreements. See Quick, R., “’Border Tax Adjustment’ in the context of emission trading: climate protection or ‘naked’ protectionism?,” Global Trade and Customs Journal 3, no. 5 (2008) 163-175: 169.

51

Tarasofsky, R. G., “Heating up international trade law: challenges and opportunities posed by efforts to combat climate change,” Carbon and Climate Law Review 1, no. 1 (2008) 7-17: 9.

52 53

Panel Report, US – Gasoline, WT/DS2/R [adopted on 20/5/1996], para. 6.36.

GATT Panel Report, US – Tuna/Dolphin II (unadopted) [circulated on 16/6/1994] Panel Report DS/29/R.para. 5.15-5.17.

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the jurisdiction of the import state (animals, for example).54 A territorial nexus will generally not be established for carbon sinks and areas of high biodiversity. However, considering that unlike Art. XX f) GATT, the term “national” is not mentioned, the nexus cannot be limited to a territorial one.55 Moreover, the requirement does not reflect the reality of common goods such as those recognised under CITES or the World Heritage Convention,56 or the declaration of biodiversity as a common concern in the CBD. Accordingly, arguments can be brought forward for the protection of biodiversity at the time of import. Even if a territorial nexus would be required, it could be established through the global impact of climate change and climate change mitigation. In order to fall under the exemption of Art. XX g) GATT, the sustainability criteria have to relate to the conservation of these resources. While “necessity” (used within Art. XX b) GATT) evokes a contribution, “relating to” only requires a genuine relationship of ends and means between the objective pursued and the measure employed.57 Requirements in the case law rank from measures “reasonably related” to,58 through those having “a close and real relationship” with,59 to those “primarily aimed at” conservation.60 In any case, as the necessity test under Art. XX b) GATT is fulfilled, the lower requirements under Art. XX g) GATT are also met.



11.2.4.3 Chapeau

The chapeau sets out the tests for the manner in which the trade restricting measure qualifying for an exception under Art. XX g) to j) GATT is to be applied, aiming to avoid an abuse of the exceptions.61 Measures may not present an arbitrary or unjustifiable discrimination or a disguised restriction on international trade; terms which can be retained under the same conditions.62 Notably, the term discrimination under Art. XX GATT is to be 54

Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], para. 132-133. Panel Report, EC – Tariff Preferences WT/DS246/R [adopted 20/4/2004], para. 7.210. did not see the conditions of Art. XX(b) GATT as fulfilled if the protected good is not on the territory of the importing state. Critical on the requirement of the sufficient nexus Bender, T., Domestically prohibited goods (Berlin: Duncker & Humblot, 2006), 161 foll.

55

Charnovitz, S., “A critical guide to the WTOs report on trade and the environment,” Arizona Journal of International and Comparative Law 14, no. 2 (1997) 341-379: 354 foll.

56

Bodansky, D. and Lawrence, J. C. “Trade and environment.” In The Oxford handbook of international trade law, edited by Bethlehem, D., et al., 505-538. Oxford, New York: Oxford University Press, 2009, 525.

57

Appellate Body Report, Brazil – Tyres, WT/DS332/AB/R [adopted on 17/12/2007], para. 145.

58

Appellate Body Report, US – Gasoline WT/D52/AB/R [adopted on 20/5/1996], para. 138-141.

59

Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], para. 141.

60 61

Appellate Body Report, US – Gasoline WT/D52/AB/R [adopted on 20/5/1996].para. 19.

Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], para. 156-158.

62

Appellate Body Report, US – Gasoline WT/D52/AB/R [adopted on 20/5/1996], para. 25.

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interpreted differently to Art. I, III GATT, as otherwise no violation could be justified.63 Accordingly, not discrimination per se, but only arbitrary or unjustifiable discrimination is prohibited. A measure is considered an arbitrary or unjustifiable discrimination if it distinguishes between countries with the same conditions, and if the differentiation does not fit the objective of the measure.64 Discrimination is considered justifiable or unavoidable where a certain margin of manoeuvre is left to the exporting state, where the specific conditions in exporting states have been considered and where a serious effort at prior negotiation has been undertaken.65 While Contracting Parties are free to choose their own policies, they may not impose their regulatory scheme on other members, but have to leave sufficient flexibility to exporting countries in designing their own policies.66 The sustainability criteria only apply to a small, albeit growing portion of the international trade in biomass. The criteria provide only incentives, relying on voluntary schemes and in particular certification systems, as a flexible means of compliance control.67 While some substantive requirements are specific, such as the tree cover, others leave room for interpretation. Moreover, the criteria explicitly refer to protection zones under national law (of the exporting state). Thus, sufficient flexibility remains with the exporting state. The domestic scheme has to consider its appropriateness for the conditions in exporting countries.68 Thus, the differences between countries where different conditions prevail must be taken into account, although not to the extent of looking at individual members.69 The chapeau does not stand against measures that only require a certain comparable effectiveness but leave the instruments to the exporting state.70 Art. 17 to 19 RED allow great flexibility in complying with the criteria: indicators on the generic sustainability criteria can be developed specifically for local circumstances, benchmarked by a certification system. Finally, the contracting party relying on Art. XX GATT must seek prior cooperation with potential exporting states in establishing baselines and factor in the 63

Ibid., para. 23.

64

Appellate Body Report, Brazil – Tyres, WT/DS332/AB/R [adopted on 17/12/2007], para. 227; Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], para. 150.

65

Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], para. 121.

66

Ibid., para. 164, 165., see also Panel Report, EC – Tariff Preferences WT/DS246/R [adopted 20/4/2004], para. 7.225-235; Appellate Body Report, US – Shrimp/Turtle (Art. 21.5), WT-DS58/AB/RW [adopted on 21/11/2001], para. 145-148.

67

A situation which had been reproached to the US in Appellate Body Report, US – Shrimp/Turtle, WT/ DS58/AB/R [adopted on 6/11/1998], 172.

68

Ibid., para. 164, 165, 177.; Appellate Body Report, US – Shrimp/Turtle (Art. 21.5), WT-DS58/AB/RW [adopted on 21/11/2001], para. 145-148.

69

Appellate Body Report, US – Shrimp/Turtle (Art. 21.5), WT-DS58/AB/RW [adopted on 21/11/2001], para. 149.

70

Ibid., para. 144.

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specific costs for importers.71 Notably, the requirement for international negotiations can act as a motor to promote environmental standards. Potential exporting states have to be engaged “in serious across-the-board negotiations with the objective of concluding bilateral or multilateral agreements.”72 When drafting the Directive, an extensive consultation process was held for interested parties. Exporting countries were explicitly invited to present their views. Moreover, international agreements have already been concluded both on biodiversity and climate change mitigation, cementing the objectives of the sustainability criteria. Even though this was not achieved prior to the drafting of the Directive, Art. 18 (4) subpara. 1 RED explicitly encourages the EU to endeavour in the conclusion of bi- and multilateral agreements. Thus, if the sustainability criteria would be considered discriminatory according to the chapeau, this could be considered justifiable and unavoidable. In particular, a disguised restriction to trade could not be construed from the idea that Art. 17 to 19 RED introduce another regulatory regime (thus lowering legal certainty),73 as the criteria are construed as a meta-standard.



11.3 The Agreement on Technical Barriers to Trade

The Agreement on Technical Barriers to Trade (TBT-Agreement) applies to non-tariffary barriers to trade in the form of technical regulations, standards and conformity assessment procedures (Art. 1.1, 1.6, Annex I TBT-Agreement).



11.3.1 Application next to GATT

Even though the TBT-Agreement’s scope of application is more specific than GATT, applying only to technical measures rather than to regulation of goods in general, both agreements apply to the sustainability criteria. The WTO is considered a single undertaking in which measures have to comply with the entire regime.74 Applicability or even conformity with the TBT-Agreement does not exclude the applicability of GATT (Annex 1A WTO-Agreement) and vice versa.75 71

Appellate Body Report, US – Gasoline WT/D52/AB/R [adopted on 20/5/1996], para. 28, 29.

72 73

Appellate Body Report, US – Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998], para. 166, 171.

See Desplechin, E., “The Brazilian sugarcane ethanol industry’s approach to certification,” Sugarcane Industry 135, no. 4 (2010) 222-225.

74

Ackrill, R. and Kay, A. “WTO regulations and bioenergy sustainability certification – synergies and possible conflicts.” In Discussion papers in economics, edited by Coleman, S. Nottingham: Nottingham Trent University, 2010, 17; Appellate Body Report, EC – Bananas III, WT/DS27/AB/R [adopted on 25/9/1997], para. 204; Appellate Body Report, EC – Asbestos, WT/DS 135/AB/R [adopted on 5/4/2001], para. 80.

75

GATT is generally applicable next to the TBT-Agreement, which lacks a provision like Art. 2.4 SPSAgreement. Thus, a measure which is TBT conform is not presumed as GATT-conform.

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11.3.2 Technical regulation and conformity assessment

The sustainability criteria could be held to the standards of the TBT-Agreement if they represent a measure classified as a technical regulation, standard or a conformity assessment according to the TBT-Agreement. The requirements under the TBT-Agreement depend on the qualification of the sustainability criteria as a (compulsory) technical regulation (Art. 2, 3 TBTAgreement) or a (voluntary) standard (Art. 4 TBT-Agreement).



11.3.2.1 nprPPM as technical measures

As with Art. III GATT, it is controversial whether the TBTAgreement applies to nprPPM. When drafting the TBT-Agreement, the negotiators failed to reach agreement on the question.76 However, the definitions both of technical regulations and standards (Annex I n. 1, 2 TBT-Agreement) refer to “characteristics for products or related processes and production methods” of a determinable product or group of products.77 This suggests that PPM shall only be covered where they affect the physical characteristics of the product (product-related).78 However, such a narrow understanding is not imperative. The definitions of technical regulation and standards also include (but are not limited to) measures concerned with “terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method”. Moreover, it does not seem practical that nprPPM (which may be much less transparent and more trade restrictive than product related PPM) should be excluded from the reporting requirements under Art. 10 TBT-Agreement.79 However, the question has not yet been tested 76

WTO Committee on Technical Barriers to Trade (CTBT). “Negotiating history of the coverage of the Agreement on Technical Barriers to Trade with regard to labelling requirements, voluntary standards and processes and production methods unrelated to product characteristics.” Geneva: WTO, 1995, note by the Secretariat, G/TBT/W11.

77

For the three tier test in determining whether a measure is a technical regulation Appellate Body Report, EC-Sardines, WT/DS231/AB/R [adopted on 23/10/2002], para. 176.

78

Trebilcock, M. J. and Howse, R., The regulation of international trade, 3rd ed. (London: Routledge, 2004), 526; van den Bossche, P., Schrijver, N., and Faber, G. “Unilateral meassures adressing non-trade concerns – A study on WTO consistency, relevance of other international agreements, economic effectiveness and impact on developing countries of measures concerning non-product-related processes and production methods.” The Hague: Ministry of Foreign Affairs of the Netherlands, 2007, 143, 145.

79

Marceau, G. Z. and Trachtman, J. P., “The Technical Barriers to Trade Agreement, the Sanitary and Phytosanitary Measures Agreement, and the General Agreement on Tariffs and Trade ; a map of the World Trade Organisation law of domestic regulation of goods,” J. World Trade 36, no. 5 (2002): 861; Vranes, E., Trade and the environment – fundamental issues in international law, WTO law and legal theory (Oxford, New York: Oxford University Press, 2009), 316, 317, 340. Confirming the lack of notification requirement if the TBT-Agreement is not applicable: Appellate Body Report, US – Gasoline WT/D52/ AB/R [adopted on 20/5/1996], para. 23.

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in a panel or the Appellate Body.80 Nonetheless, the conformity of the sustainability criteria with the TBT-Agreement shall be assessed here.



11.3.2.2 Regulation or standard

The requirements for compliance with the TBT-Agreement strongly depend on the classification of the sustainability criteria as either a technical regulation or a standard. Technical regulations are compulsory measures that describe product characteristics of identifiable products or product groups (Annex I.2 a TBT Agreement).81 Standards, on the other hand, are not binding (Annex I.1 TBTAgreement). While compliance with the sustainability criteria is not compulsory, compliance is still required to benefit from national support mechanisms and to count towards the national targets. Standards can still be considered voluntary even if an operator does not have an effective choice, e.g. where nonadherence would exclude their product from the market.82 However, compliance with the sustainability criteria affects more than just market access: it also mediates eligibility for public support schemes. Therefore, compliance with the sustainability criteria should be regarded as mandatory, and they are consequently technical regulations that must meet the more stringent requirements of Art. 2 rather than Art. 4 TBT-Agreement.83



11.3.3 No less favourable treatment of like products

Many issues surrounding technical regulations are similar to those already discussed with regards GATT, in particular for the consideration of a justification under Art. XX GATT. In particular, technical regulations must not create unnecessary obstacles to international trade84 (most obviously, 80

Notably, neither party addressed this issue in Appellate Body report, US – Tuna II (Mexico) WT/DS381/ AB/R [adopted on 13/6/2012]. so that the Panel did not make any statement on the inclusion of PPMs. Trujillo, E., “The Tuna-Dolphin encore – WTO rules on environmental labelling,” American Society of International Law Insights 16, no. 7 (2012) 1-7.

81

Appellate Body Report, EC-Sardines, WT/DS231/AB/R [adopted on 23/10/2002], para. 176.

82

van den Bossche, P., Schrijver, N., and Faber, G. “Unilateral meassures adressing non-trade concerns – A study on WTO consistency, relevance of other international agreements, economic effectiveness and impact on developing countries of measures concerning non-product-related processes and production methods.” The Hague: Ministry of Foreign Affairs of the Netherlands, 2007, 142.

83

See also Panel report, US – Tuna II (Mexico) WT/DS381/R [adopted on 13/6/2012].para. 7.50 foll. In this case, a “dolphin friendly” labelling requirements pursuant to US legislation was considered a technical regulation. Notably, the sustainability criteria, while relying on certification systems for compliance control, do not have such a consumer labelling requirement. On voluntary standards and the TBTAgreement, see Glinski, C., “Private norms as international standards? – regime collissions in TunaDolphin II,” European Journal of Risk Regulation 3, no. 4 (2012) 545-560.

84

Art. 2.2, 2.5, 5.1.2 TBT-Agreement.

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imported products must not receive less favourable treatment than domestic ones).85 Art. 2.1, 2.2 TBT‑Agreement establish that imported produce shall not be treated less favourably than domestic like products, mirroring the requirements of Art. III GATT. Technical regulations are to be based on international standards (Art. 2.4 TBT-Agreement).86 Other standards shall be considered (Art. 2.7 TBTAgreement) and international standards and conformity assessment systems promoted (Art. 2.5 TBT-Agreement).87 Accordingly, existing or imminent standards have to be identified, and an assessment made of whether the technical regulation is based on such standards, and of the standards’ effectiveness in fulfilment of the legitimate objective.88 In the case of the RED sustainability criteria, reference has been made to voluntary certification systems and ISO standards.89 In this regard, the sustainability criteria and their recognition mechanism can be considered compliant with the TBT Agreement. As under GATT, Art. 2 TBT-Agreement requires imported goods to receive no less favourable treatment than domestic like products. The term “like product” has mostly been defined in case law on Art. I, III GATT.90 Like for Art. III:4 GATT, “sustainable” and “unsustainable” biofuels and bioliquids are to be considered like products irrespective of different non-product related process and production methods. The term “no less favourable treatment” in Art. 2.1 TBT-Agreement is interpreted based on the guidance provided on the same term under GATT, but in the specific context of the TBT-Agreement.91 Parallel to Art. III GATT, distinctions in treatment are permitted, but may not be applied to the detriment of imported products or products of specific origins.92 The Appellate Body has clarified that whether the measure modifies the conditions of competition in the reference market, de jure or de facto, to the detriment of imported products should be examined. It required a genuine relationship between the 85

Art. 2.2, 2.5, 5.1.1 TBT-Agreement.

86

Appellate Body Report, EC-Sardines, WT/DS231/AB/R [adopted on 23/10/2002]; Howse, R. “A new device for creating international legal normativity: the WTO Technial Barriers to Trade Agreement and ‘International Standards’.” Chap. 13 In Constitutionalism, multilevel trade governance and international economic law, edited by Joerges, C. and Petersmann, E.-U., 383-395. Oxford: Hart, 2011, 384 foll.

87

See also Panel report, US – Tuna II (Mexico) WT/DS381/R [adopted on 13/6/2012], para. 7.624 foll.

88

Ibid., para. 7.628.

89

On the distinction between the definition of standard under the TBT-Agreement and ISO, see Schepel, H. “The empire’s drains: sources of legal recognition of private standardisation under the TBT-Agreement.” In Constitutionalism, multilevel trade governance and international economic law, edited by Joerges, C. and Petersmann, E.-U. Oxford: Hart, 2011.

90 91

Panel report, US – Tuna II (Mexico) WT/DS381/R [adopted on 13/6/2012], paras. 7.219 foll., 7.224.

Ibid., paras. 7.270, 7.271.

92

Ibid., paras. 7.276, 7.277. Notably, Appellate Body report, US – Tuna II (Mexico) WT/DS381/AB/R [adopted on 13/6/2012], paras. 289 foll. reversed the finding that the labelling measures were even handed according to Art. 2.1 TBT-Agreement in this case.

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measure and its adverse effects on competition.93 Regarding no less favourable treatment, the same arguments can be brought forward against a de jure or de facto discrimination under GATT. Moreover, where a de facto discrimination could be construed (as the sustainability criteria could be easier to fulfil for domestic producers as they are closer to the regulator), the potential for superior knowledge of domestic producers is in practice limited by the notification requirements for technical regulation and conformity assessments under Art. 9 TBT–Agreement. Accordingly, the treatment could be considered no less favourable. Nonetheless, legitimate objectives for a potential infringement shall be discussed below.



11.3.4 Legitimate objectives under Art. 2.2 TBT-Agreement

As the TBT-Agreement does not have a general justification clause, one could conclude that the prohibition of a less-favourable treatment of like products should be construed more narrowly than under Art. III GATT.94 This could be brought forward as an argument for compliance with the TBT Agreement. Moreover, under Art. 2.2 TBT-Agreement, environmental concerns are construed as a legitimate objective of technical regulations or standards, rather than a justification of a limitation to trade. Much like Art. XX b) GATT and the chapeau, Art. 2.2 TBT-Agreement allows the introduction of technical regulations to pursue legitimate objectives, including the protection of human health or safety, animal or plant life or health, or the environment.95 Moreover, measures shall not be “more traderestrictive than necessary” to fulfil these objectives, taking into account the risks of non-fulfilment.96 Following the same line of argument as for Art. XX GATT,97 it can reasonably be expected that the sustainability criteria would be compliant with the TBT-Agreement.98 However, the interpretation of Art. XX GATT may have to be adapted in this case, as Art. 2.2 TBT-Agreement is not 93

Appellate Body report, US – Tuna II (Mexico) WT/DS381/AB/R [adopted on 13/6/2012], paras. 214-16, 221, 224, 225.

94

Marceau, G. Z. and Trachtman, J. P., “The Technical Barriers to Trade Agreement, the Sanitary and Phytosanitary Measures Agreement, and the General Agreement on Tariffs and Trade ; a map of the World Trade Organisation law of domestic regulation of goods,” J. World Trade 36, no. 5 (2002): 822.

95

Panel report, US – Tuna II (Mexico) WT/DS381/R [adopted on 13/6/2012], para. 7.437.

96

Ibid., para. 7.454 foll. Notably, Appellate Body report, US – Tuna II (Mexico) WT/DS381/AB/R [adopted on 13/6/2012], paras. 311 foll. reversed the finding that the complainant in this case had established that the measure in question was more trade restrictive than necessary, but did not substantially alter the criteria for the assessment. Gruszynski, L., “Trade, investment and risk: re-tuning tuna? Appellate Body Report in US – Tuna II,” European Journal of Risk Regulation 3, no. 3 (2012) 430-436.

97

Reference to Art. XX GATT is also made by Panel report, US – Tuna II (Mexico) WT/DS381/R [adopted on 13/6/2012], para. 7.457.

98

See also Ibid., para. 7.379 foll.

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construed as an exception, but as a positive obligation.99 Necessity is not taken to mean a necessity to achieve the objective as under Art. XX b) GATT, but rather the necessity of the trade restriction. The trade restriction must be required to achieve the objective,100 and furthermore, the risks that non-fulfilment would create are to be taken into account, i.e. the likelihood and gravity of potential risks if the legitimate objective is not fulfilled.101 Accordingly, necessity is not assessed in absolute terms, but in relation to the objective pursued. Again, it has to be stressed that compliance control for the sustainability criteria is assessed through private entities, based on independent auditing under voluntary certification systems. Moreover, the sustainability criteria rely on an incentive rather than making compliance compulsory. Thereby, the sustainability criteria rely on the self-regulatory power of economic operators. Compared to command and control instruments, the interference with trade relationships is low. On the other hand, the mitigation of climate change is an objective of the highest order as it touches on the preservation of living conditions on Earth. Accordingly, the sustainability criteria in their current form are likely to be considered compliant with Art. 2.2 TBT-Agreement.



11.4 Conclusion

Even though GATT and the TBT-Agreement aim for the facilitation of free trade, they do allow environmental concerns to be taken into account in trade relationships. It appears that the TBT-Agreement is more restrictive, placing more stringent requirements on measures that could present an obstacle to trade. Notably, while a preferential treatment of developing countries is permissible,102 WTO law would not allow more-restrictive rules to be applied to developing and newly industrialised countries in order to compensate for low environmental standards and enforcement deficits. Both GATT and the TBT-Agreement require a no less favourable treatment of imported products. If anything, more stringent sustainability criteria for imports could only be justified if they mirror requirements placed on domestic goods in the EU under 99

Ibid., para. 7.458.

100

Ibid., para. 7.460 foll. with reference to the SPS-Agreement. Notably, the interpretation of the Panel was criticised for suggesting that a measure had to fulfil the objective perfectly in order to be considered necessary, or other ineffective measures would be considered less trade restrictive. Arcuri, A., “Back to the future: US-Tuna II and the new environment-trade debate,” European Journal of Risk Regulation 3, no. 2 (2012) 177-189.

101

Panel report, US – Tuna II (Mexico) WT/DS381/R [adopted on 13/6/2012], para. 7.467.

102

See Art. XVIII, Part IV GATT; GATT Contracting Parties, Decision on differential and more favourable treatment, reciprocity and fuller participation of developing countries, L/4903 [1979]. This enabling clause introduced the General System of Preferences (GSP) allowing for preferential treatment of developing countries. See also WTO, Preferential treatment for least-developed countries – Decision on waiver, WT/L/304 [1999].

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other environmental law. Overall, even if the sustainability criteria were to be considered discriminatory, they appear justifiable and thus compliant with the requirements of WTO law. In fact, it appears that the sustainability criteria have been drafted with the requirements of international trade law in mind. This is particularly apparent in the referral to voluntary certification systems for compliance control, and in the incentive set for compliance rather than making compliance compulsory. The Appellate Body has already considered much more intrusive measures (such as import bans) to be lawful.103 Thus, the sustainability criteria stay well below the ceiling set by WTO law. WTO law would have allowed more-stringent requirements.

103

See also Howse, R. and Langille, J., “Permitting pluralism: the seal products dispute and why the WTO sould accept trade restrictions justified by noninstrumental moral values,” Yale Journal of International Law 37(2012) 367-432.

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Conclusions

chapter 12

The Impact of the Sustainability Criteria

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The sustainability criteria in Art. 17 to 19 RED seek to further the environmental integrity of the use of renewable energy. The change from fossil fuels to renewable energy is being undertaken with a view to climate change mitigation, but also energy security and economic development. Thus, the sustainability criteria are at the nexus of environmental protection and free trade and development. In the following, conclusions will be drawn on the effect of the sustainability criteria toward achieving their objective, in particular with a view to imports from third countries.



12.1 The need for integration

The Renewable Energy Directive introduced a target in the interest of climate change mitigation, for renewable energy to make up 20% of energy consumption within the European Union by 2020, with a specific transport target of 10%. These targets are translated into national support schemes providing incentives for the expansion of renewable energy. In achieving these targets, in particular in the transport sector, bioenergy plays an important role. This increased demand places bioenergy production at the nexus of climate change mitigation and biodiversity protection. At a global level, the production and use of bioenergy can contribute to the stability of the climate and thus to biodiversity. At a local level, however, the use of bioenergy, and in particular the cultivation of raw material and processing these raw materials to make usable energy sources, puts pressure on the local environment and particularly biodiversity. Thus, the increasing use of bioenergy results in a new, intra-environmental conflict. In the “classic” conflict between trade and environmental concerns, trade liberalisation measures and an economy focussed on growth are in conflict with biodiversity – despite the WTO preamble noting the aim to protect and preserve the environment. The national targets and economic incentives for the production of renewable energy artificially create a market, turning the expansion of renewable energy at least partly into an economic concern. Accordingly, the intra-environmental conflict is also intertwined with trade concerns. The trade aspect is also apparent in the choice of legal basis for the sustainability criteria of Art. 114 TFEU (i.e. the harmonisation of the internal market) and the requirement of compliance with world trade law. The expansion of bioenergy puts pressure on biodiversity: arable land is needed for cultivation, leading to both direct and indirect land use changes, and intensification of agriculture to increase yields and processing of biomass for energy bring about pollution. The increased demand is particularly problematic for biomass imported from third countries. Potential exporting countries are mostly developing and newly industrialised countries such as Brazil, Indonesia or Mozambique, where bioenergy, in particular for export, is seen as a motor for economic development, which in turn marginalises environmental stan-

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dards. These countries have a comparative economic advantage over production in Europe, suggesting that imports from them will prove economically preferable to local production within Europe. At the same time, it is mainly the developing and newly industrialised countries that still harbour large natural or near-natural ecosystems, for example tropical rain forests. Thus, the “demand pull” exerted by even the relatively modest targets for European consumption of renewable energy may have considerable side effects in these third countries. By recurring to imports, the EU thus externalises the environmental impact of bioenergy and thereby of its climate change mitigation policy. The side effects of the expansion of bioenergy demonstrate that even measures with clear environmental goals must be tested as to their environmental integrity, balancing environmental values. Climate change mitigation cannot be pursued at all costs, where measures could destroy the very things that they aim to protect. At the same time, it has to be borne in mind that if insufficient measures are taken to mitigate climate change, the living conditions on Earth will be substantially altered, potentially making discussion of the protection of biodiversity moot. Accordingly, a balance needs to be struck between climate change mitigation – in this case embodied in the targets – and the impact on the environment in general and biodiversity in particular. In doing so, it has to be borne in mind that the shift to renewable energy is crucial in achieving a decarbonisation of energy supply. The only current alternative, the continued use of fossil fuels, must also be placed in the equation: if the alternative to bioenergy production is for example the extraction of oil from tar sands, the balance may still be in favour of the use of biofuels even in the transport sector.1 A regulatory framework has to be established that preserves the positive carbon balance of bioenergy and minimises negative impacts on biodiversity at a local level. The regulatory framework predating RED was insufficient for this task. The situation in newly-industrialised countries shows that environmental standards relying on command and control instruments could not halt the destruction of biodiverse rain forest. They are opposed by regulatory incentives for the expansion of bioenergy, adding to the economic incentive of the profitable trade in bioenergy and its feedstocks. This is leading to bioenergy being produced for export, satisfying the objective of economic development in developing and newly industrialised countries, in line with the perceived benefit of mitigating climate change in the importing countries such as the EU Member States. However, it has been shown that this practice leads to neither sustainable development nor to the mitigation of climate change. In its current form, the national law within exporting states does not seem fit to withstand 1

Several options exist: targets could be lifted, lowered, or could be differentiated according to the environmental impact. The options have to be considered as to their capacity in achieving climate change mitigation, balanced against other environmental concerns. Notably, lower targets would unlikely be low enough to overcome the comparative advantage of importing biomass, thus not automatically alleviating the pressure on the environment in developing and newly industrialised countries.

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the economic pressures on environmental protection. A different approach is taken by voluntary certification systems, where adherence to environmental and socio-economic standards provide economic benefits, allowing access to markets and providing a qualitative advantage over competitive products. However, these voluntary certification systems depend on a market for sustainable products. With consumers facing the same dilemma between trade and environment – cheap products versus sustainably sourced product – such a market had not emerged on a large scale. The sustainability criteria in Art. 17 to 19 RED acknowledge the conflict between biodiversity protection, the mitigation of climate change, and trade for economic development. This approach is already embodied in the requirement on the EU institutions to aim for a high level of environmental protection when legislating on the harmonisation of the internal market. Compliance with the sustainability criteria is a condition for eligibility for certain renewable energy support schemes. Accordingly, the conflict has been addressed, and a balance drawn, at the time the sectoral measures were drafted – not when they are applied. The aim of expansion, promoted through support schemes, and the limitations on this expansion are integrated into one instrument. Accordingly, various economic and environmental concerns are addressed in the same instrument, addressing inter- and intra-environmental conflicts nearterm, and blurring the boundary between sectoral legislation. Rather than being bolted on seemingly as an afterthought, environmental standards are integrated into RED as an inherent limitation to the expansion of renewable energy.



12.2 The environmental integrity of imports

The sustainability criteria apply to biofuels and bioliquids irrespective of the origin of the feedstock used for their production. Certain areas with high biodiversity status or high carbon storage capacity are excluded from cultivation and harvesting. Moreover, a certain GHG emission balance has to be observed. The following will assess how these criteria affect imports into the EU and the level of environmental protection in the resource states.



12.2.1 The GHG balance

One aim of the sustainability criteria is the preservation of a positive GHG balance of biofuels and bioliquids compared to fossil fuels, which is a precondition for climate change mitigation. Certain areas with comparatively high carbon storage are declared no-go areas. Moreover, a progressive quota of emission savings compared to fossil fuels is introduced. Notably, the complexity of the GHG balance calculation is reduced for imports from third countries, which can rely on default values (Art. 19 (3) RED). Accordingly, the effort required for the GHG emission calculation of imports into the EU is lower

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than for domestic products – although the conservatively chosen default values may make a full calculation beneficial nonetheless. The quota does not encourage reductions beyond the required GHG balance, and is thus not necessarily an instrument to drive technological progress. Nonetheless, some incentives have been provided for advanced technologies, which can be double counted for the fulfilment of the national quota. However, this incentive alone is probably not sufficient to induce the development of advanced biofuels and must be complemented by research projects. The development of advanced biofuels would have been an anchor for cooperation on technologies with resource states or capacity building. However, RED does not place such requirements on Member States and instead focuses on the product itself. Moreover, much of the potential to drive a positive GHG balance has not been used. A major factor in reducing the GHG emissions from energy supply is the reduction of energy consumption itself. However, requirements on energy efficiency are not part of the sustainability criteria. In fact, energy efficiency in RED is limited to general obligations to Member States including the definition of technical specifications (Art. 13 (3) RED), the promotion of high conversion technologies (Art. 13 (6) RED), energy efficiency of new public buildings (Art. 13 (5) RED) and the availability of information (Art. 14 (5) RED). The design of the support schemes and energy efficiency requirements for these support schemes strongly depend on the Member States, subject to Art. 17 (8) RED and to EU requirements on efficiency in general. Again, no additional measures are demanded to increase the efficiency of biofuels and bioliquids at the point where the feedstock and often the final product is produced, i.e. in the resource states. It is highly questionable whether the incentive provided by the sustainability criteria is sufficient to steer technological choices in resource states.



12.2.2 Biodiversity in resource states

As well as certain ecosystems with above-average carbon storage, the sustainability criteria declare certain protection zones and ecosystems of high biodiversity value as no-go areas. The exclusion of these areas from cultivation and harvesting may improve the level of protection in countries with lower environmental standards. Moreover, where national protection zones have been designated but enforcement is poor, the referral by the sustainability criteria to these national protection zones may reinforce the protection status in question. To some degree, the no-go areas of Art. 17 RED are already contained in multilateral environmental agreements, in particular primary forests, wetlands and areas designated for protection purposes, although definitions differ. However, area descriptions are often general and the determination is left to the Contracting Party. In this regard, the sustainability criteria may provide a reinforcement, depending on the stringency of their own compliance control mechanisms. The exclusion of biodiverse grasslands is new, however – no specific international agreement exists. However, the exclusion of grasslands

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is not yet operationable, pending further definition by a Commission decision. Considering the importance of grasslands both for biodiversity and as carbon sinks, the lack of regulation (or sufficient research on indicators) on the matter is regrettable. The reinforcement of national and international standards only goes as far as the sustainability criteria do, and these focus on certain ecosystems with particularly high biodiversity or carbon storage capacity. While the limitation to specific ecosystems may be practical, it does not allow for comprehensive protection of natural resources. In particular, biodiversity is omnipresent: localised species and unique ecosystems may occur beyond a specified ecosystem. Even though the no-go areas may be particularly high in biodiversity, other ecosystems outside these ecosystems are not protected under the sustainability criteria. In addition, this external biodiversity may make important contributions to the biodiversity status of hotspots or the protection of the diversity of genetics, species and ecosystems overall. Moreover, even for the biodiversity hotspots, no requirements are made for the size of an ecosystem or the linking of different areas, aspects which are crucial in ensuring the viability of a habitat. The area determination relies on qualitative criteria, rather than quantitative aspects. However, these aspects are crucial in safeguarding the functioning of the ecosystem in question. Moreover, no management criteria for biodiverse areas are introduced. Where the status of an ecosystem as a no-go area is not absolute, but cultivation and harvesting is permitted so long as the ecosystem status is not affected, further criteria for these exemptions and the level of agricultural management would have been desirable. Otherwise, these exemptions open the door to possible abuse that would lead to degradation despite the status as no-go area. Another issue is the determination of the no-go areas in question. Unlike for the detailed methodology of calculating GHG balances, the sustainability criteria do not establish a methodology for the determination of these no-go areas, only setting a broad framework, loosely defining the area type. Remote sensing data may often not be available for the reference date of January 2008. Local plans, maps or interviews with locals may be compromised in areas with high corruption and limited governance structures, and as time passes, determining the status of land on the reference date will become increasingly difficult. This issue of determining no-go areas is left completely in the hands of the auditors under the certification system referred to for compliance control. Accordingly, a crucial precondition for reinforcing the level of environmental protection is not addressed by the sustainability criteria. Overall, the provisions relating directly to biodiversity leave a considerable margin of manoeuvre to the exporting state or voluntary scheme assessing compliance.

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12.2.3 Open issues

The impacts of agricultural production on soil, water and air are not framed by RED into substantial criteria for imported products. Management requirements in the agricultural sector are not established. Art. 17 (7) RED merely contains a reporting requirements, Art. 18 (4) RED stipulates that provisions on soil, water and air may be contained in bi- and multilateral agreements or voluntary certification schemes referred to for compliance control. The existing – albeit limited – standards for good agricultural practice under the Common Agricultural Policy do not apply to imported products. However, the management of agricultural land has a considerable impact not only on the arable land, but also on surrounding natural or near-natural ecosystems, through erosion, irrigation or the use of chemicals. Moreover, the preservation of agricultural land as arable also decreases the pressure on converting natural or near-natural ecosystems for agricultural production. In this regard, the requirements under voluntary schemes recognised for compliance control are considerably more advanced. The same is true for socio-economic issues. Socio-economic issues, which are internationally more controversial than environmental protection, have only been retained in RED as reporting requirements. In particular, macro-economic impacts such as the competition with food and feed are unresolved. The impact of increasing bioenergy production on food security, i.e. the availability and prices of food and feed, is only addressed in the sustainability criteria as reporting requirements. Similarly, workers’ rights and human rights more generally are not part of the substantial criteria. Voluntary certification systems have often taken a much more comprehensive approach, giving credit to the fact that (sustainable) development and environmental protection cannot be dissociated from each other, and that neither issues can be dissociated from the trade in the certified product. This is particularly apparent for land grabbing from indigenous communities, which may go hand in hand with the conversion of natural or near-natural ecosystems. In the sustainability criteria, these issues – relating not only to exports for biofuels and bioliquids but to agricultural exports into the EU more generally – are left open. Thereby, the sustainability criteria address only a small fragment of the conflicts surrounding bioenergy. However, these issues are critically important in developing and newly developed countries. Instead of the sustainability criteria driving improvements in voluntary certification systems, the voluntary systems have an opportunity to drive improvements in state regulation.



12.2.4 The issue of leakage

Biofuels and bioliquids can only be taken into account for national targets and some support schemes if they comply with the sustainability criteria. The criteria rely on an incentive to Member States and economic

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operators, rather than hard sanctions or import restrictions. This incentive is reinforced by the fact that liquid biomass considered compliant by a reliable compliance control mechanism may be sold at a premium price. The approach of relying on incentives might have been chosen as it is less likely to come into conflict with WTO rules. This is true for the reliance on incentives in general rather than mandatory standards, and for the support mechanisms covered, providing incentives that are unlikely to come into conflict with the subsidies regime and requirements on the trade in goods. The choice of the incentive on economic operators demonstrates some confidence in the self-regulatory powers of markets – even though the market is to some degree only created by Member States’ renewable energy support schemes. The scope of the sustainability criteria is limited both geographically and substantively, which raises the issue of the redirection of trade streams and production paths (leakage). The scope of the sustainability criteria is limited geographically, applying only to products traded with European Union member states. This raises the issue of the redirection of trade streams and production paths for products with dual uses (leakage). Thus, “non-compliant” biofuels and bioliquids can easily be traded outside the EU. Exporting states can chose different markets, and noncompliant liquid biomass cultivated in the EU can be exported. For example, trade streams flowing into the rising industrial powers in South East Asia such as China are already becoming a more and more important trading partner for exporting resource countries. This effect may be limited by the fact that other major markets such as the US have also enacted their own – albeit different – sustainability standards, but it should not be underestimated. The sustainability criteria apply only to biofuels and bioliquids, i.e. bioenergy in a liquid aggregate. The definition differs from other biofuel definitions, adding to the complexity of terminology already used in the field. Notably, the focus of the sustainability criteria is still biofuels: default values (not disaggregated default values) exist only for biofuels, and the Commission recognises voluntary schemes only for biofuels. Recital 67 RED contends that bioliquids have been introduced in order to avoid displacement effects. Even though liquid biomass is a particularly important energy source in the transport sector, displacement can only be combatted if regulations are entirely parallel. However, the scope of the sustainability criteria only covers a limited portion of the uses of biomass: biofuels and bioliquids represent only a fraction of the use of biomass for energy and an even smaller fraction of the use of biomass overall. The criteria do not apply to other renewable energy sources, or to other biomass aggregates, in particular gaseous biomass for heating and electricity and solid biomass. No attempts have been made so far to extend the sustainability criteria beyond the use of biomass for energy, for example to uses such as food and feed or building material. The Commission is considering expanding the scope of application to solid and gaseous bioenergy, but concrete measures have not yet been taken. Accord-

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ingly, where biomass has dual uses, as is often the case with energy and food, non-compliant biomass can still be imported. Compliant biomass would be used for biofuels or bioliquids, non-compliant biomass will be redirected towards other uses, without generating a positive impact on the level of environmental protection in the country of origin. Moreover, the focus on biofuels and bioliquids distorts the perception of the conflict between biodiversity protection and climate change mitigation or development interests. The focus on liquid biomass for energy creates the illusion that bioenergy is the single factor putting pressure on the environment. Other driving forces such as food and feed supply, population growth etc. are important factors in biomass, but are governed by their respective sectoral regimes. The focus on bioenergy negatively affects the image and reputation of renewable energy, for which there are no alternatives in combating climate change and ensuring energy security. Moreover, other conflicts surrounding agriculture are sidelined by the sustainability criteria in their current form, forgoing the potential for a more comprehensive solution. The issue of leakage arises not only for biomass with dual uses, but also for the land used for agricultural production more general. Indirect land use change – the leakage of agricultural production for food and feed into natural or near-natural ecosystems, making space for the production of biomass for energy – is a major factor in the sustainability of biofuels and bioliquids. Where biomass for energy intended for export to the EU is moved to existing arable land, but the previous uses of the arable land are displaced into the areas that RED attempts to protect, the level of environmental protection is not affected by the sustainability criteria. Without addressing indirect land use changes, the sustainability criteria are significantly limited in their effectiveness – to the point where it is reasonable to question whether they are even meaningful. Currently, the narrow scope of the sustainability criteria seriously hampers their effectiveness in achieving the environmental integrity of bioenergy for climate change mitigation. However, for a new legal regime, it seems reasonable to begin with the most contentious issue – biofuels for transport – where no other source of renewable energy is readily available. Leakage effects remain problematic, but the criteria have at least addressed the most obvious leakage effect, from biofuels to bioliquids. More positively, the sustainability criteria may cause a spill-over effect in the future, either by the expansion of the legal regime or by the uncertainty as to the final use of the feedstock. However, there is no evidence yet that such a spill-over effect has actually occurred in practice. As is, the narrow scope of the sustainability criteria suggests that their impact on biodiversity protection can only be very limited – the environmental side effects cannot be effectively controlled. In fact, the legislator of the German EEG doubted that the environmental side effects can be overcome at all, and opted to exclude liquid biomass from the scope of application of the feed-in tariff for electricity, thus entirely removing the incentive (s. 27 (5) n. 3 EEG 2012).2 2

However, the quota in the transport sector has been maintained.

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12.3 The interaction with transnational law

Compliance with the sustainability criteria is not assessed directly by the Commission or the Member States, but by recognised certification systems. Compliance with the sustainability criteria is assessed through a voluntary scheme that is recognised either by the Commission or by a Member State. Thus, RED does not establish a compliance control mechanism, but only a recognition mechanism. Conformity assessments are undertaken by certification bodies’ auditors under certification systems. The referral to voluntary schemes gives considerable weight to these certification systems, creating a market for certified products by combining compliance with national renewable energy targets and selected support mechanisms with compliance with the sustainability criteria. The referral continues the trend of the EU being a major driver in the spread of transnational networks.3



12.3.1 Certification and third countries

The meta-standard approach is well suited to further the application of environmental standards equivalent to the sustainability criteria beyond the territory of the EU Member States. Unlike a public authority, private entities can operate within other states’ territories without conflicting with the non-intervention principle. Public authorities do not commonly operate uninvited in other countries’ jurisdictions. Particularly in former colonies, a privately organised conformity assessment does not have the same stigma as inviting other countries’ public authorities onto their territory would. Furthermore, unlike national public authorities, voluntary schemes can operate across national borders with relative ease. In relying on voluntary schemes, the EU and Member States can recur to the accumulated expertise and knowledge of local conditions of these certification systems. Moreover, the meta-standard approach allows for principles and criteria to be adapted to different regional or local circumstances. In this context, the general provisions on the no-go areas appear appropriate, as they can encompass numerous specialised or country-specific principles and criteria in certification systems with various scopes. However, it can be questioned whether the referral to voluntary certification systems is a sufficient tool in assessing compliance with the sustainability criteria. There is great variation between the different certification systems. The stringency of the principles and criteria, the degree of management requirements or hard targets, as well as the provisions on the governance of certification systems, certification bodies and on the independence of the auditing process differs considerably. While the level of available data is low, first indications show that compliance of certified operators needs improvement. Moreover, 3

See Nölke, A. and Graz, J.-C. “Limits to the legitimacy of transnational private governance.” Warwick: CSGR/GARNET Conference “Pathways to legitimacy? The future of global and regional governance”, 2007, 10.

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where the focus is on management practices, as is the case with many schemes, no measure is available for what degree these practices contribute to achieving the objective of the certification scheme. Accordingly, the suitability of certification systems to assess compliance has been called into question – in particular in countries with low public governance standards, high corruption and low environmental standards. State regulation may also be required in another way: certification systems only operate at the level of individual operations and cannot address indirect and global impacts such as food security. Consequently, the meta-standard making reference to certification systems may be a necessary tool in assessing conformity with standards equivalent to the sustainability criteria, in particular in cross border compliance assessment, but does not appear sufficient to solve the issues surrounding biofuels and bioliquids, in particular in developing and newly industrialised countries.



12.3.2 Benefits of the recognition mechanism

The recognition mechanism could provide public control by acting as a benchmark to reinforce voluntary standards, setting a minimum standard that provides a basis for competing certification systems and certification bodies. Thus, the certification systems (whose influence increases considerably through the referral) can be reinforced by the state law that increased their influence in the first place. Thereby, the shortcomings of voluntary schemes due to their co-ordinated consensus-based regulation can be overcome. Certification systems usually have some concept of no-go areas, even though not necessarily directly equivalent to the requirements under RED. A new element is introduced into certification systems through the requirements on a GHG emission balance. However, otherwise, the principles and criteria in voluntary certification systems usually go further than those of the RED sustainability criteria do: they address management practices and biodiversity beyond hotspots, they make provisions on working conditions, land rights and human rights, which are key issues in many developing and newly industrialised countries. In this case, the sustainability criteria gain stringency through the referral, rather than RED reinforcing voluntary schemes. In fact, the recognition mechanism puts pressure on high-level certification systems by not making socio-economic standards and management practices part of the recognition process. Low-level certification systems are recognised and thus branded as equivalent, entering into competition with high level standards. Accordingly, RED risks causing a step back rather than a step forward. In these cases, the recognition can even hinder the introduction of more stringent standards. A similar conclusion can be drawn for the conformity assessment. The requirements for Commission recognition are low. The governance of certification systems is not addressed, certification bodies are not recognised, and the independence of auditors is only considered in a broad framework. Again, many certification systems go considerably further than the RED requirements.

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While public control could reinforce voluntary certification systems in their principles and criteria as well as their conformity assessments, the recognition mechanism in its current form does not appear to do so, apart from for the GHG emission balance. Accordingly, no legislative framework is set that could improve the self-legitimation of voluntary schemes through input and output legitimacy, mediated through procedures such as the equal representation of interests, the separation of science and policy consideration, or rules on conflicts of interests. Accordingly, the potential of public regulation to reinforce voluntary schemes has not materialised.



12.3.3 Fragmentation and harmonisation

There are a wide variety of certification systems potentially touching on bioenergy, ranging from feedstock–oriented, through use–oriented, to production–oriented schemes, all of which have their own principles and criteria and conformity assessment procedures. A benchmarking by state law might contribute to the harmonisation of the various certification systems, decreasing complexity and increasing transparency. However, the fragmentation of the certification systems has only increased after RED, with several certification systems being drafted explicitly to show compliance with the sustainability criteria. In fact, several pre-existing certification systems have drafted specific EU versions of their standards, intended only for imports into the EU. Notably, the generic global standards have not been abolished by any of the recognised schemes, confirming that leakage is indeed a problem. No-go areas as contained in RED and the GHG emission balance thereby apply only to products aimed for the European Market. Beyond imports into the EU, the benchmarking has not had the effect of raising standards. As described above, beyond no-go areas and the GHG emission balance, the benchmarking in the Commission recognition mechanism leads to, if anything, a harmonisation at a low level as far as principles and criteria and the governance of certification systems and certification bodies is concerned. Accordingly, although the RED sustainability criteria place the EU in a leading role for enacting measures limiting climate change mitigation in state law, the informal law established by certification systems is in fact held back by the state law requirements. Moreover, different recognition schemes are currently not harmonised. Each Member State adopts its own recognition procedure based on the broad requirements under RED. In addition, the Commission has established its own recognition system, so that 28 recognition systems exist in total. Notably, the fragmentation of the different recognition mechanisms also presents the risk of double accounting. However, the complexity of recognition mechanisms is partially alleviated by the fact that Commission recognition decisions (which are the most relevant for operators from third countries) apply across the entire EU. Nonetheless, further harmonisation to limit “forum shopping” for the easiest recognition procedure is desirable. Although the simplicity of requirements does

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not automatically entail a less stringent application, discrepancies in the recognition requirements are already emerging.



12.4 Sustainability criteria and trade

Overall, the criteria stay well within the margin opened by the precautionary principle, the aim for a high level of environmental protection mandated under Art. 114 TFEU and the discretion of Contracting Parties in enacting trade-related environmental measures under WTO law. Notably, it would have been possible to introduce more-stringent sustainability criteria onto imported produce, as long as they mirrored environmental requirements on domestic products in domestic law. In a way, the sustainability criteria are an example of the association between sustainable development and environmental protection. The sustainability criteria follow a different approach than WTO law, which focuses on preferences awarded to developing and least developed countries. However, as compliance with the sustainability criteria is linked to an incentive, the model is in fact not that far different, seeking to promote a certain form of traded goods. From the perspective of a trade dispute, the sustainability criteria can be seen to provide the function of granting market access to developing and newly industrialised countries, for the increased price that developed countries and their consumers are willing to pay for ensuring the environmental integrity of their climate change mitigation measures that create the demand for biomass in the first place. Moreover, the referral to voluntary certification systems creates a market for certified products, on which certification systems and certification bodies compete for economic operators. However, the sustainability criteria then do little to allow high-level certification systems and certification bodies to strive under this competition.



12.5 The way ahead

The sustainability criteria can be seen as providing a balance that allows Member States to achieve their renewable energy targets and to limit environmental side effects on the way. Considering the focus on the expansion of renewable energy – if fossil fuels are to be completely replaced, much higher targets will prove necessary – the balance is likely to lean towards the increased use of bioenergy, at least for those uses (such as transport) where there is no readily-available alternative. The sustainability criteria have a very narrow scope of application, which does not inhibit leakage. Binding criteria have only been established in areas that are relatively uncontroversial. No-go areas are only declared where there is no doubt about the biodiversity value, default values for the calculation of the

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GHG emission balance have only been provided rarely, where adequate data is available. Areas with high uncertainties, such as on indirect land use changes or emissions from agriculture, are only subject to reporting requirements. This reinforces that further research is necessary on scientific issues such as GHG balancing, but also on socio-economic issues such as the competition with food and feed. Accordingly, the criteria are accompanied by numerous periodic reporting and review requirements. Moreover, more research needs to be conducted into the impact of environmental provisions, not only of the sustainability criteria but also of the certification systems to which they refer for compliance control. Notably, the certification decision only describes the compliance with the requirements of the certification system. It does not assess whether the objectives of the certification system are met. The same is true for reports on compliance with multilateral environmental agreements. Accordingly, further research is necessary on the impact of legislation and certification systems in practice. Currently, the level of data is very low; research on the compliance with and the impact of certification systems is only just beginning. Only when the evidence is clearer can an informed choice be made on the most effective instruments for achieving environmental integrity. Thus, the current Art. 17 to 19 RED may represent a test balloon for more stringent criteria. Although they are currently of limited effectiveness, Art. 17 to 19 RED already contain many provisions on the further evolution of the sustainability criteria. Many of these, for example on indirect land use changes and emissions from agriculture, depend on the availability of scientific data. Accordingly, further scientific research is required that can then feed into the legislative process. In fact, based on new scientific findings, the Commission has already proposed amendments to RED, moving towards accounting for the efficiency of different fuels, higher GHG emission requirements and incorporating indirect land use changes. 4 With further scientific and technological progress, further amendments to the legal regime can be expected. In particular, leakage can only be addressed if sustainability criteria are also applied to other forms of biomass for energy, in particular solid and gaseous biomass, but also for biomass for food and feed. Currently, regulation on biomass in Europe is fragmented across different regimes with different requirements. For example, imports of wood are regulated by the more-demanding Illegal Timber Regulation (EC) n. 995/20105 accompanying the Forest Law Enforcement Governance and Trade (FLEGT) voluntary partnership agreements. Food and feed are governed by elaborate food safety and agricultural standards. The severity of standards is thus already governed by the question of whether the biomass shall be used for food or not. In order to fully address the side 4

Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012].

5

European Parliament and Council, Regulation (EU) n. 995/2010 laying down the obligations of operators who place timber and timber products on the market, OJ [2010] L 295/23.

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effects of not only bioenergy but also biomass, a comprehensive legal regime will have to be developed. The development of quality standards alone is not sufficient to address the conflicts surrounding bioenergy or the use of biomass more generally. The sustainability criteria have to be part of a broader strategy that addresses capacity building, financing and other instruments furthering the environmental integrity of agricultural production, which should be assessed and improved over time. Comprehensive regulation of biomass in the EU has however only regional value. The fragmentation of bioenergy or even biomass can only be fully addressed through global standards. Although the EU is a very large market, only a global standard can overcome the shift in trade streams according to environmental and social standards, the fragmentation of the bioenergy or even the biomass regime, harmonizing approaches and terminology. An attempt toward this has been made in the energy sector with the establishment of the Global Bioenergy Partnership (GBEP). In the same way, Art. 18 (4) RED enables the Commission to recognise bi- and multilateral agreements with a content corresponding to that of the sustainability criteria, potentially leading to a further harmonisation of international environmental law. In fact, voluntary certification systems may form the foundations for further international harmonisation. In the long term, the pressure on biodiversity from bioenergy and biofuels in particular is likely to decrease with the development of more efficient biofuels, the so-called second-generation biofuels. More scientific research is required to bring these fuels to market. Through these efficiency gains, the further development of e-mobility and the adaptation of the electricity grid and storage capacities for renewable energy demands, the importance of biomass as an energy source is likely to decrease. Amended sustainability criteria for biofuels and bioliquids can provide useful controls during the current transitional period, and will serve as a starting point in addressing the environmental side effects of these other renewable energy sources.

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Websites http://en.2bsvs.org/ http://en.2bsvs.org/2bsvs/the-2bsvs-consortium.html http://faostat.fao.org/site/567/default.aspx#ancor http://rsb.org/ http://rsbservices.org/ http://sanstandards.org/sitio/ http://whc.unesco.org/ http://www.abengoabioenergy.com/web/en/rbsa/ http://www.ats.aq/e/ats.htm http://www.birdlife.org/ http://www.bonsucro.com/ http://www.bonsucro.com/ http://www.cen.eu/ http://www.cen.eu/cen/pages/default.aspx http://www.co2star.eu/ http://www.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2012/0288%28CO D%29&l=en 306

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Interviews Interview with a member of the technical committee of a certification system (29/2/2012). Interview with a representative of a certification body (21/11/2011). Interview with a representative of a group of labelling organisations (15/3/2012). Interview with a representative of an association of biofuel producers (26/1/2013). Interview with a representative of an environmental NGO (30/1/2013). Interview with a senior academic in Indonesia (6/3/2012). Interview with a senior civil servant at a council planning authority in Lower Saxony, Germany (10/9/2011). Interview with the representative of a member of a voluntary certification system (15/2/2013). Interview with the manager of environmental affairs at the secretariat of a certification system (1/11/2011).

307

Table of Cases

towards sustainability of biomass importation

International law cases Appellate Body Report, Brazil - Tyres, WT/DS332/AB/R [adopted on 17/12/2007]. Appellate Body Report, Canada - Aircraft, WT/DS70/AB/R [adopted on 4/8/2000]. Appellate Body Report, Dominican Republic - Cigarettes, WT/DS302/AB/R [adopted on 19/5/2005]. Appellate Body Report, EC - Asbestos, WT/DS 135/AB/R [adopted on 5/4/2001]. Appellate Body Report, EC - Bananas III, WT/DS27/AB/R [adopted on 25/9/1997]. Appellate Body Report, EC-Sardines, WT/DS231/AB/R [adopted on 23/10/2002]. Appellate Body Report, Japan - Alcoholic beverages II, WT/DS8/AB/R, WT/DS10/AB/R, WT/ DS11/AB/R [adopted on 1/11/1996]. Appellate Body Report, Korea - Alcoholic beverages, WT/DS75/AB/R, WT/DS84/AB/R [adopted on 17/2/1999]. Appellate Body Report, Korea - Beef, WT/DS161/AB/R [adopted on 1/1/2001]. Appellate Body Report, US - DRAMS WT/DS296/AB/R [adopted on 20/7/2005]. Appellate Body Report, US - Gambling WT/DS285/AB/R [adopted on 20/4/2005]. Appellate Body Report, US - Gasoline WT/D52/AB/R [adopted on 20/5/1996]. Appellate Body Report, US - Shrimp/Turtle (Art. 21.5), WT-DS58/AB/RW [adopted on 21/11/2001]. Appellate Body Report, US - Shrimp/Turtle, WT/DS58/AB/R [adopted on 6/11/1998]. Appellate Body report, US - Tuna II (Mexico) WT/DS381/AB/R [adopted on 13/6/2012]. Appellate Body Report, US - Upland Cotton WT/DS267/AB/R [adopted on 21/3/2005]. GATT Panel report, Thailand - Cigarettes [adopted on 7/11/1990]. GATT Panel Report, US - Malt Beverages DS23/R - 39S/206 [adopted on 19/6/1992]. GATT Panel Report, US - s. 337 Tariff Act 1930 [adopted on 7/11/1989]. GATT Panel Report, US - Taxes on automobiles DS31/R (not adopted) [circulated on 11/10/1994]. GATT Panel Report, US - Tuna/Dolphin I (unadopted) [circulated on 3/9/1991] DS/21/R. GATT Panel Report, US - Tuna/Dolphin II (unadopted) [circulated on 16/6/1994] Panel Report DS/29/R. International Court of Justice, Bernadotte [1949] ICJ Rep 174. Panel Report, Argentina - Bovine hides, WT/DS155/R [adopted on 16/2/2001]. Panel Report, Brazil - Tyres, WT/DW332/R [adopted on 17/12/2007]. Panel Report, Canada - Periodicals, WT/DS31/R [adopted on 30/6/1997]. Panel Report, EC - Asbestos, WT/DS135/R [adopted on 5/4/2001]. Panel Report, EC - Bananas III, WT/DS27/R [adopted on 25/9/1997]. Panel Report, EC - Tariff Preferences WT/DS246/R [adopted 20/4/2004]. Panel Report, US - Gasoline, WT/DS2/R [adopted on 20/5/1996]. Panel report, US - Tuna II (Mexico) WT/DS381/R [adopted on 13/6/2012]. Permanent Court of International Justice, France v. Turkey (Lotus) [1927] Series A n. 10, 18.

European Union cases CFI, T-13/99 (Pfizer v. Council) [1999] ECR II-3305. CFI, T-70/99 (Alpharma) [2002] ECR II-3495. CFI, T-74/00 (Artegodan and others v. Commission) [2002] ECR II-4945. Commission, N317A/2006 (Wienstrom) [2006] OJ C 221/6.

310

table of cases

ECJ, 148/78 (Ratti) [1979] ECR 1629. ECJ, 171/83 (Commission v. France) [1983] ECR 2621. ECJ, 2/74 (Reyners) [1974] ECR 631. ECJ, 22/70 (Commission v. Council, AETR) [1971] ECR 263. ECJ, 248/84 (Germany v. Commission) [1987] ECR 4013. ECJ, 249/85 (Albako) [1987] ECR 2345. ECJ, 25/70 (Köster) [1970] ECR 1161. ECJ, 26/62 (Van Gend en Loos) [1963] ECR 13. ECJ, 37/82 (Rewe) [1984] ECR 1229. ECJ, 43/75 (Defrenne) [1976] ECR 455. ECJ, 57/65 (Lütticke) [1966] ECR 205. ECJ, 6/76 (Kramer) [1976] ECR 1279. ECJ, 76/76 (Steinike and Weinling v. Germany) [1977] ECR 595. ECJ, 9/70 (Grad) [1970] ECR 825. ECJ, C-103/01 (Commission v. Germany) [2003] ECR I-5369. ECJ, C-126/01 (GEMO) [2003] ECR I-7139. ECJ, C-127/07 (Société Arcelor Atlantique et Lorraine) [2008] ECR I-9895. ECJ, C-155/07 (European Parliament v. Council) [2008] ECR I-8103. ECJ, C-155/91 (Commission v. Council) [1993] ECR I-939. ECJ, C-157/96 (National Farmers’ Union) [1998] ECR I-2211. ECJ, C-178/03 (Commission v. European Parliament and Council) [2006] ECR I-107. ECJ, C-180/96 (United Kingdom v. Commission) [1998] ECR I-2265. ECJ, C-187/93 (European Parliament v. Council) [1994] ECR I-2857. ECJ, C-192/01 (Commission v. Denmark) [2003] ECR I-9693. ECJ, C-2/90 (Commission v. Belgium) [1992] ECR I-4431. ECJ, C-213/03 (Pecheurs de Berre) [2004] ECR I-7357. ECJ, C-233/94 (Germany v. European Parliament and Council) [1997] ECR I-2405. ECJ, C-236/01 (Monsanto) [2003] ECR I-8105. ECJ, C-239/03 (Commission/France) [2004] ECR I-9325. ECJ, C-240/90 (Germany v. Commission) [1992] ECR I-5383. ECJ, C-271/94 (European Parliament v. Council) [1996] ECR I-1689. ECJ, C-278/85 (Kommission v. Denmark) [1987] ECR 4069. ECJ, C-281/01 (Commission v. Council; Energy Star) [2002] ECR I-12049. ECJ, C-284/95 (Safety Hi-Tech) [1998] ECR I-4301. ECJ, C-295/97 (Piaggio) [1999] ECR I-3735. ECJ, C-3/00 (Denmark v. Commission) [2003] ECR I-2643. ECJ, C-3/00 (Denmark v. Commission) Opinion of Advocate General Tizzano [2003]. ECJ, C-300/89 (Commission v. Council; Titanium Dioxide) [1991] ECR I-2867. ECJ, C-305/89 (Alfa Romeo) [1991] ECR I-1603. ECJ, C-310/99 (Italy v. Commission) [2002] ECR I-2289. ECJ, C-341/95 (Bettati) [1998] ECR I-4355. ECJ, C-345/02 (Pearle) [2004] ECR I-7139. ECJ, C-35/96 (Commission v. Italy) [1998] ECR I-3851. ECJ, C-350/07 (Schulte v. Badenia) [2005] ECR I-9215.

311

towards sustainability of biomass importation

ECJ, C-350/92 (Spain v. Council) [1995] ECR I-1985. ECJ, C-36/98 (Spain v. Council) [2001] ECR I-779. ECJ, C-375/90 (Commission v. Greece) [1993] ECR I-2055. ECJ, C-376/98 (Germany v. European Parliament and Council) [2000] ECR I-8419. ECJ, C-377/98 (The Netherlands v. European Parliament and Council) [2001] ECR I-7079. ECJ, C-379/98 (PreussenElektra) [2001] ECR I-2099. ECJ, C-380/03 (Germany v. European Parliament and Council) [2006] ECR I-11573. ECJ, C-384/07 (Wienstrom) [2008] ECR I-10393. ECJ, C-409/00 (Spain v. Commission) [2003] ECR I-3671. ECJ, C-41/02 (Commission v. The Netherlands) [2004] ECR I-11375. ECJ, C-41/93 (France v. Commission) Opinion of Advocate General Tesauro [1994]. ECJ, C-411/06 (Commission v. European Parliament and Council) [2009] ECR I-7585. ECJ, C-434/02 (Arnold André) [2004] ECR I-11825. ECJ, C-459/03 (Commission v. Ireland) [2006] ECR I-4635. ECJ, C-475/99 (Glöckner) [2001] ECR I-8089. ECJ, C-482/99 (France v. Commission; Marine Stardust) [2002] ECR I-4397. ECJ, C-491/01 (British American Tobacco) [2002] ECR I-11453. ECJ, C-58/08 (Vodafone) [2010] ECR I-4999. ECJ, C-6/99 (Greenpeace France and others) [2000] ECR I-1651. ECJ, C-66/04 (United Kingdom v. European Parliament and Council) [2005] ECR I-10553. ECJ, C-84/94 (United Kingdom v. Council) [1996] ECR I-5755. ECJ, Joined cases C-154/04 and C-155/04 (Alliance for Natural Health) [2005] ECR I-6451. ECJ, Joined cases C-164/97 and C-165/97 (European Parliament v. Council) [1999] ECR I-1139. ECJ, Joined cases C-296/93 and 307/03 (France and Ireland v. Commission) [1996] ECR I-795. ECJ, Joined cases C-439/05 P and C-454/05 P (Oberösterreich and Austria v. Commission) [2007] ECR I-7141. ECJ, Joined cases C-453/03, C-11/04, C-12/04 and C-194/04 (ABNA) [2005] ECR I-10423. ECJ, Joined cases C-52/97 and C-54/97 (Viscido) [1998] ECR I-2629. ECJ, joint cases 80/77 and 81/77 (Ramel) [1978] ECR ECJ 927. ECJ, Opinion 1/03 (Competence of the Community to conclude the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2006] ECR I-1145. ECJ, Opinion 1/76 on the draft agreement establishing a laying-up fund for inland waterway vessels [1977] ECR ECJ 741. ECJ, Opinion 1/94 on the Competence of the Community to conclude international agreements concerning services and the protection of intellectual property - Article 228 (6) of the EC Treaty [1994] ECR I-5267. ECJ, Opinion 2/00 [2001] ECR I-9713. EGC, T-278/11 (ClientEarth et al. v. Commission) [2012] not yet reported.

312

Table of Legislation and Other Regulatory Instruments

towards sustainability of biomass importation

International law Agreement establishing the World Trade Organisation 1995. Agreement on Agriculture 1994. Agreement on Subsidies and Countervailing Measures 1994. Agreement on Technical Barriers to Trade 1994. CBD COP 5, Decision V/23: Consideration of options for conservation and sustainable use of biological diversity in dryland, Mediterranean, arid, semi-arid, grassland and savannah ecosystems, UNEP/CBD/COP/5/23 [2000]. CBD COP 9, Decision IX/1: In-depth review of the programme of work on agricultural biodiversity, UNEP/CBD/COP/DEC/IX/1 [2008]. CBD COP 9, Decision IX/2: Agricultural biodiversity: biofuels and biodiversity, UNEP/CBD/COP/ DEC/IX/2 [2008]. CBD COP 9, Decision IX/7 Ecosystem approach, UNEP/CBD/COP/DEC/IX/7 [2008]. Convention in International Trade in Endangered Species 1973. Convention on Biological Diversity 1992. GATT Contracting Parties, Decision on differential and more favourable treatment, reciprocity and fuller participation of developing countries, L/4903 [1979]. General Agreement on Tariffs and Trade 1994. International Tropical Timber Agreement 1994. IRENA. “Implementation strategy for a global solar and wind atlas.” Abu Dhabi, 2012. IRENA. “Renewable Energy Roadmap 2030.” Abu Dhabi, 2012. ITTO and IUCN, Guidelines for the conservation and sustainable use of biodiversity in tropical timber production forests [2006]. ITTO, CIFOR, FAO and WWF, Guidelines for the restauration, management and rehabilitation of degraded and secondary tropical forests [2010]. Kyoto Protocol to the United Nations Framework Convention on Climate Change 1992). OECD, Decision of the Council establishing an International Energy Agency of the Organisation [1974]. OECD, Supplementary Protocol No. 1 to the Convention on Economic Co-operation and Development [1960]. Ramsar Convention COP 4, Annex to Recommendation 4.10: Guidelines for the implementation of the wise use concept [1990]. Ramsar Convention COP 4, Recommendation 4.10: Guidelines for the implementation of the wise use concept [1990]. Ramsar Convention COP 5, Resolution 5.6: The wise use of wetlands [1993]. Ramsar Convention COP 6, Resolution VI.1: Working definitions of ecological character, guidelines for describing and maintaining the ecological character of listed sites, and guidelines for operation of the Montreux Record [1996]. Ramsar Convention COP 7, Resolution VII.19 Guidelines for International Cooperation under the Ramsar Convention [1999]. Ramsar Convention COP 7, Resolution VII.20: Priorities for wetland inventory [1999]. Ramsar Convention COP 7, Resolution VII.6: Guidelines for developing and implementing national wetland policies [1999].

314

table of legislation

Ramsar Convention COP 7, Resolution VII.7: Guidelines for reviewing laws and institutions to promote the conservation and wise use of wetlands [1999]. Ramsar Convention COP 7, Strategic Framework and guidelines for the further development of the list of wetlands of international importance [1999]. Ramsar Convention COP 8, Resolution VIII.14: New guidelines for management planning for Ramsar sites and other wetlands [2002]. Ramsar Convention COP 8, Resolution VIII.17: Guidelines for global action on peatlands [2002]. Ramsar Convention COP 8, Resolution VIII.20: General Guidance for Interpreting ‘Urgent National Interests’ under Article 2.5 of the Convention and Considering Compensation under Article 4.2 [2002]. Ramsar Convention COP 9, Resolution IX.1 Annex A: A conceptual framework for the wise use of wetlands and the maintenance of their ecological character [2005]. Ramsar Convention COP 9, Resolution IX.1 Annex E: An integrated framework for wetland inventory assessment and monitoring (IF-WIAM) [2005]. Ramsar Convention COP 9, The criteria for identifying wetlands of international importance [2005]. Ramsar Convention on Wetlands of International Importance 1971 Statute of the International Renewable Energy Agency 2009. UNESCO, Convention concerning the protection of the world cultural and natural heritage [1972]. UNESCO, Operational guidelines for the implementation of the World Heritage Convention [2012]. UNFCCC COP 4, Decision 9/CP.4: Land use, land-use change and forestry, FCCC/CP/1998/16/ Add.1 [1998]. UNFCCC COP 6 (Bonn), Decision 5/CP.6: the Bonn Agreements on the implementation of the Buenos Aires Plan of Action, FCCC/CP/2001/5 [2001]. UNFCCC COP 7, Decision 11/CP.7: Land use, land use change and forestry, FCCC/CP/2001/13/ Add.1 [2001]. UNFCCC COP 7, Decision 16/CP.7: Guidelines for the implementation of Article 6 of the Kyoto Protocol, FCCC/CP/2001/13/Add.2 [2001]. UNFCCC COP 7, Decision 17/CP.7 Modalities and procedures for a clean development mechanism, as defined in Article 12 of the Kyoto Protocol, FCCC/CP/2001/13/Add.2 [2001]. UNFCCC COP 9, Decision 19/CP.9: Modalities and procedures for afforestation and reforestation project activities under the clean development mechanism in the first commitment period of the Kyoto Protocol, FCCC/CP/2003/6/Add.2 [2003]. UNFCCC COP7/MOP1, The Marrakesh Accords, FCCC/CP/2001/13/Add. 1 [2001]. UNFCCC/KP (COP/MOP 1), Decision 11/CMP.1 Modalities, rules and guidelines for emissions trading under Article 17 of the Kyoto Protocol, FCCC/KP/CMP/2005/8/Add.2 [2005]. UNFCCC/KP COP/MOP 1, Decision 16/CMP.1 Land use, land-use change and forestry, FCCC/KP/ CMP/2005/8/Add.3 [2005]. UNFCCC/KP COP/MOP 1, Decision 9/CMP.1: Guidelines for the implementation of Article 6 of the Kyoto Protocol, FCCC/KP/CMP/2005/8/Add.2 [2005]. UNFCCC/KP COP/MOP 6, Decision 1/CMP.6: The Cancun Agreements: Outcome of the work of the ad hoc working group on further commitments for Annex I Parties under the Kyoto Protocol at its fifteenth session FCCC/KP/CMP/2010/12/Add.1 [2011].

315

towards sustainability of biomass importation

UNFCCC/KP COP/MOP 6, Decision 2/CMP.6: The Cancun Agreements: Land use, land-use change and forestry FCCC/KP/CMP/2010/12/Add.1 Para 1 [2011]. United Nations Framework Convention on Climate Change 1992. World Summit on Sustainable Development, Plan of implementation [2002]. WTO, Preferential treatment for least-developed countries - Decision on waiver, WT/L/304 [1999].

European Union law and preparatory documents Charter of Fundamental Rights of the European Union OJ [2009] C 83/389. Commission, Certification schemes for biofuels, Memo/11/522 [2011]. Commission, Communication - Biomass Action Plan, COM [2005 ] 628 final. Commission, Communication - Energy Roadmap 2050, COM [2011] 885 final. Commission, Communication - Renewable Energy Road Map, COM [2006] 848 fin. Commission, Communication on the implementation of Article 290 of the Treaty on the Functioning of the European Union, COM [2009] 673 final. Commission, Communication on the practical implementation of the EU biofuels and bioliquids sustainability scheme and on counting rules for biofuels, OJ [2010] C 160/02. Commission, Communication on the precautionary principle, COM [2000] 1 final. Commission, Communication on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme, OJ [2010] C 160/01. Commission, Decision 2000/115/EC relating to exceptions to the definitions and the regions and districts regarding the surveys on the structure of agricultural holdings, OJ [2000] L 38/1. Commission, Decision on guidelines for the calculation of land carbon stocks for the purpose of Annex V to Directive 2009/28/EC [2010] L 151/19. Commission, Draft consultation paper on the definition of highly biodiverse grasslands [2010]. Commission, Draft Directive .../.../EU laying down calculation methods and reporting requirements pursuant to Directive 98/70/EC relating to the quality of petrol and diesel fuels, COM [2011] yyy final. Commission, Implementing Decision 2010/210/EU on the recognition of the ‘Ensus voluntary scheme under RED for Ensus bioethanol production’ for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 98/70/EC, OJ [2012] L 110/42. Commission, Implementing Decision 2011/435/EU on the recognition of the ‘Roundtable of Sustainable Biofuels EU RED’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/73. Commission, Implementing Decision 2011/436/EU on the recognition of the ‘Abengoa RED Bioenergy Sustainability Assurance’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/75. Commission, Implementing Decision 2011/437/EU on the recognition of the ‘Biomass Biofuels Sustainability voluntary scheme’ for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/77. Commission, Implementing Decision 2011/438/EU on the recognition of the ‘International Sustainability and Carbon Certification’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/79. Commission, Implementing Decision 2011/439/EU on the recognition of the ‘Bonsucro EU’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/81. 316

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Commission, Implementing Decision 2011/440/EU on the recognition of the ‘Round Table on Responsible Soi EU RED’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/83. Commission, Implementing Decision 2011/441/EU on the recognition of the ‘Greenenergy Brazilian Bioethanol verification programme’ scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC, OJ [2011] L 190/85. Commission, Implementing Decision 2012/395/EU on recognition of the ‘Red Tractor Farm Assurance Combinable Crops & Sugar Beet Scheme’ for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC, OJ [2012] L 187/62. Commission, Implementing Decision 2012/427/EU on recognition of the ‘Scottish Quality Farm Assured Combinable Crops Limited’ scheme for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC [2012] L 198/17. Commission, Implementing Decision 2012/432/EU Ion recognition of the ‘REDcert’ scheme for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC, OJ [2012] L 199/24. Commission, Implementing Decision 2012/452/EU on recognition of the ‘NTA 8080’ scheme for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC, OJ [2012] L 205/17. Commission, Implementing decision 2012/722/EU on recognition of the Roundtable on Sustainable Palm Oil RED scheme for demonstrating compliance with thte sustainability criteria under Directives 98/70/EC and 2009/28/EC, OJ [2012] L 326/53. Commission, Proposal for a Directive amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and ameinding Directive 2009/28/EC on the promotion of energy from renewable sources, COM (2012) 595 final [2012]. Commission, Proposal for a Directive on the promotion of the use of energy from renewable sources, COM [2008] 19 final. Commission, Report on indirect land-use change related to biofuels and bioliquids, COM [2010] 811. Commission, Report on sustainability requirements for the use of solid and gaseous biomass sources in electricity, heating and cooling, COM [2010] 11 final. Commission, Report on the feasibility of drawing up lists of areas in third countries with low greenhouse gas emissions from cultivation, COM [2010] 427 final. Commission, Results of the public consultation on additional sustainability measures at EU level for solid and gaseous biomass used in electricity, heating and cooling [2011]. Commission, Staff working document on impact assessment - Document accompanying the package of implementation measures for the EU objectives on climate change and renewable energy for 2020, SEC (2009) 85 [2008]. Commission, The impact of a minimum 10% obligation for biofuel unse in the EU-27 in 2020 on agricultural markets, AGRI G-2/WM D [2007]. Committee on Fuel Quality, Committee meeting on Fuel Quality 23 February 2012, CMTD (2012) 0166 [2012]. Committee on the Sustainability of Biofuels and Bioliquids, Summary report of the meeting held in Brussels on 27 May 2011 [2011]. Council, Council Decision 93/626/EEC concerning the conclusion of the Convention on Biological Diversity, OJ [1993]. 317

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Council, Decision 1999/468/EC laying down the procedures for the exercise of implementing powers conferred on the Commission, OJ [1999] L 184/23. Council, Decision 2002/358/EC concerning the approval, on behalf of the European Community, of the Kyoto Protocl to the United Nations Framework Convention on Climate Change and the joint fulfilment of commitments thereunder, OJ [2002] L 130/1. Council, Decision 2006/512/ECamending Decision 1999/468/EC laying down the procedures for the exercise of implementing powers conferred on the Commission, OJ [2006] L 200/11. Council, Decision 2010/385/EU on the conclusion of the Statute of the International Renewable Energy Agency (IRENA) by the European Union, OJ [2010] L 178/17. Council, Decision 94/69/EC concerning the conclusion of the United Nations Framework Convention on Climate Change, OJ [1994] L 33/11. Council, Decision 96/493/EC concerning the signing and provisional application of the International Tropical Timber Agreement 1994 on behalf of the European Community, OJ [1996] L 208/1. Council, Declaration on the Environment, Resolution of 15/6/1990 [1990]. Council, Directive 85/337/EEC on the assessment of certain public an private projects on the environment, OJ [1985] L 175/40. Council, Joint Declaration concerning the implementation of Article 291 of the Treaty on the Functioning of the European Union, Council Document n. 17477/09 [2009] Annex II. Council, Regulation (EC) n. 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) n. 1290/2005, (EC) n. 247/2006, (EC) n. 378/2007 and repealing Regulation n. 1782/2003, OJ [2009] L 30/16. European Parliament - Committee on Industry Research and Energy (ITRE), Report on the proposal for a Directive of the European Parliament and of the Council ont he promotion of the use of energy from renewable sources, A6-0369 [2008]. European Parliament and Council, Directive 2001/42/EC on the assessment of the effects of certain plans and programmes on the environment, OJ [2001] L 197/30. European Parliament and Council, Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market, OJ [2001] L 283/33. European Parliament and Council, Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport, OJ [2003] L 123/42. European Parliament and Council, Directive 2008/98/EC on waste and repealing certain Directives, OJ [2008] L 210/3. European Parliament and Council, Directive 2009/28/EC on the promotion of the use of energy from renewable sources, OJ [2009] L 140/17. European Parliament and Council, Directive 2009/30/EC amending Directive 98/70/EC as regards to the specification of petrolium, diesel and gas oil and introducing a mechanism to monitor and reduce greenhouse gas emissions and amending Council Directive 1999/32/EC as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/ EEC, OJ [2009] L 140/88. European Parliament and Council, Directive 98/70/EC relating to the quality of petrol and diesel fuels, OJ [1998] L 350/58. European Parliament and Council, Regulation (EC) n. 1099/2008 on energy statistics, OJ [2008] L 304/1. 318

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European Parliament and Council, Regulation (EU) n. 182/2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers, OJ [2011] L-55/13. European Parliament and Council, Regulation (EU) n. 995/2010 laying down the obligations of operators who place timber and timber products on the market, OJ [2010] L 295/23. European Parliament Council and Commission, Joint Declaration on practical arrangements for the codecision procedure, OJ [2007] C 145/05. European Parliament, Position adopted at first reading on 17 December 2008 with a view to the adoption of Directive 2009/.../EC on the promotion of the use of energy from renewable sources, EP-PE_TC1-COD [2008] 0016. European Union, Explanations relating to the Charter of fundamental rights, OJ [2007] C 303/17. Treaty establishing the European Community, consolidated version OJ [2006] C 321 E/37. Treaty on European Union, consolidated version OJ [2006] C 321 E/5. Treaty on European Union, consolidated version OJ [2009] C 83/13. Treaty on the functioning of the European Union, consolidated version, OJ [2009] C 83/47.

Law of the EU Member States Denmark, Promotion of Renewable Energy Act (VE-lov) [2008]. Germany, Bundesministerium für Umwelt Naturschutz und Reaktorsicherheit (BMU), Entwurf über eine Verordnung über Anforderungen an eine nachhaltige Herstellung von flüssiger Biomasse zur Stromerzeugung [2009]. Germany, Erneuerbare-Energien-Gesetz (Renewable Energy Act, EEG), BGBl. I [2008] 2074 (last amended by Art. 2 (69) Law of 22/12/2011, BGBl. I 3044). Germany, Verordnung über Anforderungen an eine nachhaltige Herstellung von Biokraftstoffen (Biofuel Sustainability Ordinance, Biokraft-NachV), BGBl. I [2009] 3182. Germany, Verordnung über Anforderungen an eine nachhaltige Herstellung von flüssiger Biomasse zur Stromerzeugung (Biomass Electricity Sustainability Ordinance, BioSt-NachV), BGBl. I [2009] 2174. United Kingdom, Energy Act [2004]. United Kingdom, Renewable Transport Fuel Obligations Order 2007, SI 2007 n. 2072 [2007].

Indonesian law Instruksi Presiden 1/2006 tentang penyediaan dan pemanfaatan bahan bakar nabati (biofuel) sebagai bahan bakar lain (Instruction 1/2006 on the provision and use of biofuels as an alternative fuel, PI 1/2006). Peraturan Menteri Pertanian (Permentan) 19/2011 tentang Pedoman Perkebunan Kelapa Sawit Berkelanjutan Indonesia (Ministry of Agriculture Regulation on Guidelines for the Indonesian Sustainable Palm Oil Standard, PP 19/2011). Perturan Pemerintah 1/2007 tentang fasilitas pajak penghasilan untuk penanaman modal di bidang-bidang uhasa tertentu dan/atau di daerah-daerah tertentu. (Government Regulation 1/2007 on income tax reduction for investment in certain sectors, PP 1/2007). Perturan Pemerintah 6/2007 tentang tata hutan dan penyusunan rencana engelolaan hutan, serta pengelolaan hutan (Government Regulation on forest planning and forest management plans and the utilisation of forest and forest area, PP 6/2007).

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Perturan Presiden 5/2006 tentang kebijakan energi nasional. (Presidential Decree 5/2006 on the national energy policy, PP 5/2006). Undang-Undang 32/2009 tenang perlindungan dan pengelolaan lingkungan hidup (Environmental Protection and Management Act, UU 32/2009). Undang-Undang 41/1999 tentang kehutanan (Forestry Act, UU 41/1999). Undang-Undang dasar Republik Indonesia 1945 (Constitution of Indonesia, UUD ‘45).

Transnational law 2BSvs voluntary scheme, Governance and management, 2BSvs-PRO-01 [2011]. 2BSvs voluntary scheme, Requirements for the verification of biomass production (first gathering entity and biomass producers), 2BSvs-STD-01 [2011]. 2BSvs voluntary scheme, Scheme description, 2BSvs-DES-01 [2011]. 2BSvs voluntary scheme, Verification process, 2BSvs-PRO-02 [2011]. Bonsucro, Audit guidance for the production standard including bonsucro EU audit guidance for the production standard [2011]. Bonsucro, Bonsucro production standard including Bonsucro EU production standard [2011]. Bonsucro, Certification protocol including Bonsucro EU certification protocol [2011]. Bonsucro, Terms of reference of the standard revision process [2011]. CEN, prEN 16214-1 Sustainably produced biomass for energy applications - Principles, criteria, indicators and verifiers for biofeuels and bioliquids - Part 1: Terminology [2010]. CEN, prEN 16214-2 Sustainably procuded biomass for energy applications - Principles, criteria, indicators and verifiers for biofuels and bioliquids - Part 2: Conformity assessment including chain of custody and mass balance [2010]. CEN, prEN 16214-3 Sustainably produced biomass for energy applications - Principles, criteria, indicators and verifiers for biofuels and bioliquids - Part 3: Biodiversity and environmental aspects [2010]. CEN, prEN 16214-4 Sustainably produced biomass for energy applications - Principles, criteria, indicators and verifiers for biofuels and bioliquids - Part 4: Calculation methods of the greenhouse gas emission balance using a life cycle analysis [2011]. European Parliament - Committee on Agriculture and Rural Development (AGRI), Opinion for the Committee on Industry, Research and Energy on the Commission proposal for a Directive for the promotion of the use of energy from renewable sources, COD [2008] 0016. FSC, Accreditation standard for chain of custody evaluations, FSC-STD-20-011 [2007]. FSC, By-laws, Document 1.1 [1994, last revised 2009]. FSC, Chain of custody standard for project certification, FSC-STD-40-006 [2006]. FSC, Forest management evaluations, FSC-STD-20-007 [2009]. FSC, General requirements for FSC accredited certification bodies - application of ISO/IEC Guide 65:1996 (E), FSC-STD-20-001 [2009]. FSC, Group chain of custody certification: FSC guidelines for certification bodies, FSC-POL-40-002 [2004]. FSC, Policy on group certification, FSC-POL-20-001 [1998]. FSC, Principles and criteria for forest stewardship, FSC-STD-01-001 (version 4-0) EN [1996]. FSC, Standard for chain of custody certification, FSC-STD-40-004 [2011]. FSC, Standard for evaluation of FSC controlled wood in forest management enterprises, FSCSTD-20-012 [2007]. 320

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FSC, Standard for multi-site certification of chain of custody operations, FSC-STD-40-003 [2007]. GBEP, Terms of Reference [2009]. Greenergy Brazilian Bioethanol verification programme, System description, SYS DOC 001 v.3 [2010]. Greenergy, Auditor requirements, AUD DOC - 004 [2010]. Greenergy, Bioethanol sustainability criteria for Brazilian sugarcane, STD DOC - 002 v.5 [2011]. Greenergy, Chain of custody requirements, COC DOC - 003 [2011]. Greenergy, System description, SYS DOC - 01 [2010]. HCV Resource Network, Charter [2010]. ISCC, Anforderungen an die Rückverfolgbarkeit, ISCC 203 [2011]. ISCC, Berechnungsmethoden der Mengenbuchhaltung, ISCC 204 [2011]. ISCC, Fees and tariff structure [2013]. ISCC, Group certification, ISCC 256 [2011]. ISCC, Kooperation mit anderen Zertifizierungssystemen, ISCC 254 [2011]. ISCC, Mass balance calculation methodology, ISCC 204 [2011]. ISCC, Regulations to carry out audits, ISCC 252 [2011]. ISCC, Requirements for certification bodies, ISCC 251 [2011]. ISCC, Requirements for the logo use, ISCC 208 [2011]. ISCC, Requirements for traceability, ISCC 203 [2011]. ISCC, Risk management, ISCC 207 [2011]. ISCC, Statutes, ISCC Draft 11-03-01 V 1.14 [2011]. ISCC, Sustainability requirements for the production of biomass, ISCC 202 [2011]. ISCC, System basics for the certification of sustainable biomass and bioenergy, ISCC 201 [2011]. ISCC, Systemgrundlagen für die Zertifizierung von nachhaltiger Biomasse und Bioenergie, ISCC 202 [2011]. ISEAL Alliance, Code of good practice - Setting social and environmental standards v5.0 [2010]. ISO, ISO 14001 - Environmental management systems [2004]. ISO, ISO 14040 - Environmental management - Life cycle assessment - Principles and framework [2006]. ISO, ISO 14044 Environmental management – life cycle assessment – requirements and guidelines [2006]. ISO, ISO 17011 - Conformity assessment - General requirements for accreditation bodies accrediting conformity assessment bodies [2004]. ISO, ISO 17021 - Conformity assessment - requirements for bodies providing audits and certifications of management systems [2011]. ISO, ISO 19011 - Guidelines for auditing management systems [2002]. ISO, ISO 19011 - Guidelines for quality and/or environmental management systems auditing [2011]. ISO, ISO 9001 - Quality management systems - requirements [2008]. ISO, ISO Guide 2 - Standardisation and related activities - general vocabulary [2004]. ISO, ISO Guide 59 Code of good practice for standardisation. ISO, ISO Guide 60 Conformity Assessment – Code of Practice. ISO, ISO Guide 65 - General requirements for bodies operating product certification systems [1996]. ISO, ISO Guide 66 - General requirements for bodies operating assessment and certification/ registration of environmental management systems (EMS) [1999].

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ISO, Membership manual [2012]. ISO, Statutes [2012]. IUCN (WCPA), Guidelines for applying protected area management categories [1994]. IUCN, Categories and criteria [2001]. IUCN, Guidelines for using the IUCN red list categories and criteria [2013]. IUCN. “World conservation strategy - Living resource conservation for sustainable development.” Gland, 1980. RSB, “Identity of product perserved” chain of custody standard, RSB-STD-20-002 [2011]. RSB, “Mass balance of product” chain of custody standard, RSB-STD 20-005 [2011]. RSB, “Segregation of product” chain of custody standard, RSB-STD-20-003 [2011]. RSB, Articles of association [2012]. RSB, Conservation impact assessment guidelines, RSB-GUI-01-007-01 [2011]. RSB, Consolidated RSB EU RED “identity of product preserved” chain of custody standard, RSBSTD-11-002-20-002 [2011]. RSB, Consolidated RSB EU RED “segregation of product” chain of custody standard, RSBSTD-11-001-20-003 [2010]. RSB, Consolidated RSB EU RED General requirements for accreditation bodies, RSBSTD-11-001-75-001 [2011]. RSB, Consolidated RSB EU RED generic chain of custody standard, RSB-STD-11-001-20-001 [2010]. RSB, Consolidated RSB EU RED Principles & Criteria for Sustainable Biofuel Production, RSBSTD-11-001-01-001 [2011]. RSB, Consolidated RSB EU RED Requirements for the qualification of accreditation and certification body auditors performing evaluations to RSB standards under the RSB certification systems, RSB-STD-11-001-70-002 [2011]. RSB, Consolidated RSB EU RED Standard for participating operators, RSB-STD-11-001-30-001 [2010]. RSB, EU-RED Glossary of Terms, RSB-DOC-11-001-10-001 [2011]. RSB, General requirements for accreditiation bodies - the application of ISO/IEC 17011:2004 (E), RSB-STD-75-001 [2011]. RSB, General requirements for certification bodies, RSB-STD-70-001 [2011]. RSB, Generic chain of custody standard, RSB-STD-20-002 [2011]. RSB, Glossary of terms [2011]. RSB, Guidance on principles & criteria for sustainable biofuel production, RSB-GUI-01-000 [2010]. RSB, Indicators of Compliance for the RSB Principles & Criteria, RSB-IND-01-001 [2011]. RSB, Principles & criteria for sustainable biofuel production, RSB-STD-01-001 [2010]. RSB, Requirements for the evaluation of and reporting on participating operators, RSB-STD-70-003 [2011]. RSB, Requirements for the qualification of accreditation and certification body auditors performing evaluations to the RSB standards under the RSB certification systems, RSB-STD-70-002 [2011]. RSB, Standard for adaptation to crop specific conditions, RSB-STD-15-001 [2011]. RSB, Standard for participating operators, RSB-STD-30-001 [2011]. RSB, Terms of reference, RSB-DOC-01-001 [2011].

322

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RSB, Use of terms for the RSB principles & criteria (glossary), RSB-DOC-10-002 [2010]. RSPO, Certification systems [2007]. RSPO, National interpretation of RSPO principles and criteria for sustainable palm oil production Republic of Indonesia [2011]. RSPO, Outputs and recommendations [2011]. RSPO, Principles and Criteria for sustainable palm oil production - guidance for smallholders [2009]. RSPO, Principles and criteria for sustainable palm oil production [2007]. RSPO, Requirements for compliance with the EU renewable energy directive requirements [2012]. RSPO, Rules on communications & claims [2011]. RSPO, Statutes and by-laws [2005]. RSPO, Supply chain certification systems [2011]. RSPO, Terms of reference for the greenhouse gas working group 2 [2010]. RTRS, Accreditiation and certification standard for responsible soy production, RTRS_A&C_ STD_001_V3-2_ENG [2011]. SAN, Climate module - criteria for mitigation and adaptation to climate change [2011]. SAN, Sustainable agriculture standard, SAN-S-1-1 [2010]. SAN/Rainforest Alliance, Chain of custody policy [2012]. SAN/Rainforest Alliance, Chain of custody standard [2012]. SAN/Rainforest Alliance, Farm certification policy [2009]. SAN/Rainforest Alliance, Group certification policy [2011]. SAN/Rainforest Alliance, List of permitted mass balance products [2012].

323

Summary

towards sustainability of biomass importation

This book addresses the conflict between climate change, other environmental concerns such as biodiversity, and international trade, focussing on the relationship between climate change mitigation and biodiversity protection in the bioenergy sector, taking into account the specific situation for imports from developing countries. The focal point is the sustainability criteria enacted by Directive 2009/28/EC (the so-called Renewable Energy Directive - RED). The document is divided into 6 parts: • Part I (Chapter 1) describes the regulatory challenges of the use of bioenergy, considers the conflict between bioenergy and environmental and trade interests and also other environmental concerns, and introduces the sustainability criteria. • Part II (Chapters 2 to 4) assesses the substance of the Renewable Energy Directive’s sustainability criteria for biofuels and bioliquids and suggests possible reforms. It details how the substance of the criteria is intended to address the conflict between climate change mitigation and other environmental concerns, addressing the scope of application, the requirements on the climate balance as well as the exclusion of certain areas from cultivation. • Part III (Chapters 5 to 8) examines the compliance control mechanisms employed to ensure that the substantial criteria described in part II are observed. It describes the powers of compliance monitoring by the Commission. Moreover, it describes in detail the certification systems that are at the heart of compliance control, under the supervision of European and national bodies. • Part IV (Chapters 9 to 11) explores the compliance of the sustainability criteria with higher-ranking law, specifically European law and international trade law, which form the framework under which the sustainability criteria have been enacted, providing both minimum standards and ceilings for the drafting of the criteria. Moreover, it places the sustainability criteria in the context of international environmental and energy law and assesses compliance in this respect. • Part V (Chapter 12) summarises the results and provides an outlook on future bioenergy policy. The contents of the chapters are as follows: • Chapter 1 lays down the foundations, defining biomass and bioenergy. It describes the potential benefits of the use of bioenergy compared to fossil fuels and other renewable energy sources. In view of these benefits, the European Union has introduced certain targets for the use of renewable energy, which are incentivised by several support mechanisms, creating a “demand pull” for biomass production in general and for imports of biomass from third countries in particular. The increasing production leads to several conflicts – in particular over pressures on the land for the increased demand for agricultural land and its impacts on biodiversity. The chapter finally introduces the European sustainability criteria. 326

summary

• Chapter 2 addresses the scope of application of the sustainability criteria and puts them into the context of the renewable energy targets. The scope of the criteria is at first glance very limited in two ways. Firstly, the sustainability criteria only apply to a limited set of products and support mechanisms. The criteria do not apply to biomass or bioenergy in general, but only to liquid aggregates, biofuels (i.e. energy for transport) and bioliquids (i.e. biomass for power and heating and cooling). Secondly, compliance with the sustainability criteria is a requirement only for specific support mechanisms. These are renewable energy obligations and the financial support of the consumption of bioenergy, thus avoiding the application of the subsidy regime. Nonetheless, the scope of the criteria may be much more extensive in national law. The incentive for member states to legislate a general requirement to comply with the sustainability criteria is strong: only compliant bioenergy can be counted towards the national renewable energy targets introduced by the Directive. • Chapter 3 considers the greenhouse gas (GHG) emission reduction requirements, GHG balance calculation methods and synergies with biodiversity protection. The level of GHG emission savings required compared to fossil fuels is not very ambitious and is unlikely to significantly contribute to climate change mitigation, but will instead allow Member States to meet their national targets. The methodology for the calculation of individual GHG emission balances in a life cycle assessment is based on current scientific knowledge and requires adaptation to technical and scientific progress. RED contains only a few default values and aggregated default values to simplify the calculation of emission balances, as not enough scientific information is available to calculate all possible pathways of the diverse crops, trade routes, production and consumption processes. Moreover, several issues have not been addressed: No default values exist for direct land use changes. Indirect land use changes have not yet been incorporated into the equation, nor emissions from agriculture. Accordingly, the impact of bioenergy on climate change is not addressed comprehensively by the sustainability criteria – even though research is on-going on these issues. Only after additional scientific information becomes available can the default values be updated – which is in line with WTO requirements. • Chapter 4 looks at areas excluded from cultivation (no-go areas), for areas high in biodiversity and useful as carbon stocks, intended to disincentivise direct land use changes. The focus on these ecosystems provides a manageable approach for protecting areas that are considered particularly high in biodiversity. However, with the exception of protection zones, the area descriptions are general and, in particular for the case of grassland, remain open to interpretation. Accordingly, not all eligible areas will be considered “no-go areas” in practice. Moreover, the ecosystem approach cannot improve the protection status of biodiversity and carbon stock beyond the specified ecosystems. Furthermore, no limitations have been introduced on the total arable land. Thus, an opportunity to tackle indirect land use change 327

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is lost. Instead, indirect land use change is only seen from a GHG emission perspective. Finally, important issues remain unresolved. The already limited standards of good agricultural practice under the Common Agricultural Policy do not have to be observed for imported goods. Moreover, the socio-economic issues related to land use – conflicts with food supply, property rights and land grabbing – remain unresolved. Reporting requirements on socio-economic issues do not have a significant impact. • Chapter 5 describes the European Commission’s recognition for compliance control. The Commission – and likewise the Member States - does not operate its own compliance control mechanism, but instead relies on the recognition of voluntary schemes, in particular certification systems, which in turn are charged with compliance control. The sustainability criteria operate as a meta-standard, benchmarking standards of certification systems to the criteria. Considering that voluntary schemes, unlike state law, do not rely on democratic legitimacy, other sources of (self-)legitimacy have to be found. The voluntary schemes can either be recognised directly, or based on international agreements with third countries (of which none have yet been concluded). Delegation and the use of the sustainability criteria as a meta-standard are deemed to allow market penetration and efficiency. Nonetheless, it also comes with a loss of control over compliance. The decisionmaking process for recognitions by the Commission is not adequate to ensure compliance control beyond the standards already effected by the respective certification systems. • Chapter 6 investigates the voluntary standards and certification systems upon which compliance control under RED relies. The initiatives, by the inclusion of various actors and with their varying scopes and geographical application, demonstrate a certain level of input and output legitimacy, partly established by procedural requirements. However, no benchmark exists to define what level of legitimacy is necessary. • Chapter 7 describes the substantial standards of certification systems, which cover a variety of environmental impacts and socio-economic issues. Notably, the certification of individual operations cannot address macroeconomic or indirect effects such as food security and indirect land use changes, areas in which state regulation is necessary. The certification systems go further than the sustainability criteria in many aspects, making detailed provisions on environmental impact assessment and management, land and use rights, human rights and working conditions. However, the level of regulation differs considerably between the schemes. Benchmarking against the sustainability criteria could provide a motor for harmonisation. However, except for the GHG emission balance, harmonisation would mean harmonisation at a lower level than is currently practiced in certification under voluntary schemes. Thus, pressure is placed on high-level standards, leading to, if anything, a harmonisation at a baseline level. Notably, the recognition process has in some cases led to a proliferation of standards, thus increasing fragmentation, complexity and opaqueness. 328

summary

• Chapter 8 considers the assessment of conformity with voluntary standards through third party auditing. Certification systems establish procedures for certification bodies and their auditors, which set a framework for assessing conformity with the principles and criteria and chain of custody standards. However, some schemes strongly rely on compliance with ISO standards on accreditation, certification and auditing, which are too broad to provide a uniform level of conformity assessment. The further requirements of the certification systems differ considerably. Accordingly, certification systems are not uniform, and do not achieve a uniform level of application among operators certified under any certification system. It appears that stronger public control could compensate for the limits of self-regulation. However, the recognition process by Commission does not provide a high-level framework. However, as many standards have been newly developed, it may be too early to cast judgement, as limited information is currently available on the impact of certification on achieving environmental and socio-economic objectives. • Chapter 9 analyses compliance with European Law. Formally, the choice of legal basis is addressed. Even though the sustainability criteria provide environmental protection barriers to another environmental policy - climate change mitigation – they did not have to be based on the environmental competence, now Art. 192 TFEU. Instead, they could lawfully be based on the trade harmonisation competence, now Art. 114 TFEU, as the consolidation of environmental standards in the area enables biofuels and bioliquids as well as their raw materials to be freely traded into and across the European Union. Materially, the sustainability criteria meet the requirements of a high environmental standard required by Art. 114 TFEU, although the threshold is not a high one. Besides the referral to scientific and technological expertise in Art. 114 (3) TFEU, only limited guidance is provided for example by the precautionary principle and Art. 37 European Charter on Fundamental Rights. Where Member States seek to introduce more stringent measures, they will struggle to fulfil the requirements set in Art. 114 (5) TFEU. • Chapter 10 analyses the compliance with international environmental law. The general requirements in international energy and environmental law, notably the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA), Convention on Biological Diversity (CBD), the Ramsar Convention, and the climate change regime (the United Nations Framework Convention on Climate Change, UNFCCC, and its Kyoto Protocol) only set a very general baseline for the sustainability criteria. Obligations for contracting parties are formulated in a general way, leaving leeway to contracting parties in how intensively they pursue the goals of the agreement in question. This baseline is easily met by the sustainability criteria. • Chapter 11 explores the boundaries of measures within the World Trade Organisation (WTO). Under WTO law, outside the WTO-Agreement’s preamble, environmental concerns are construed as exceptions to free trade. 329

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Accordingly, the WTO does not set its own environmental standards but provides a framework under which contracting parties’ standards are justified. Compliance with the Agreement on Subsidies and Countervailing Measures (SCM-Agreement) could be challenged, but does not depend on the sustainability criteria, but rather on the eligibility for the support schemes for which compliance is a condition. Contracting parties have a wide margin to legislate in a way to avoid the application of the SCM-Agreement. Moreover, especially where subsidies do not fall under the SCM-Agreement but the Agreement on Agriculture, support schemes can be considered lawful. The sustainability criteria themselves have to be measured against the Agreement on Technical Barriers to Trade (TBT-Agreement) and the General Agreement on Tariffs and Trade (GATT). Both agreements prohibit less favourable treatment, but allow differential treatment of imported to domestic like products. It could be disputed whether biofuels and bioliquids compliant with the sustainability criteria – non product related process and production methods (nprPPMs) - are like products to non-compliant produce if a diverging consumer preference can be established. Even if a likeness is considered, the sustainability criteria apply indiscriminately to domestic and imported goods, even imposing more-stringent criteria on domestic goods. Finally, even if a discrimination would be held, there are good reasons to consider it justified as necessary for the protection of life or health or the conservation of exhaustible natural resources. In particular, a strong argument for compliance with WTO rules is that the sustainability criteria rely on a diversity of certification schemes for compliance control, refer to international standards and undertake to update their standards with scientific and technical progress. • Chapter 12 summarises the findings and provides a final outlook on the future of bioenergy. The sustainability criteria, both in their scope and in their substantial requirements, are too limited to avoid leakage, which casts doubts on the contribution to environmental protection in practice. It would have been desirable for a comprehensive legal regime to be introduced, covering all biomass, as the issues surrounding it go much further than just energy from liquid biomass, and also further than just the energy sector, covering diverse socio-economic issues. The reliance on voluntary certification appears necessary to make statements on compliance with the sustainability criteria, in practice through requirements equivalent to them. However, public control is still necessary for these transnational entities to reach their potential, a control which is not provided by the RED recognition mechanism. Nonetheless, the sustainability criteria are a first step towards a more holistic system of environmental policy that also takes into account negative side effects of the policy on the object it seeks to protect. Moreover, several motions have been made to expand the scope of the criteria as well as increase their stringency.

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