Securing Access to the EU Market

By Robert Vierhout | August 15, 2011

In July, I wrote about the voluntary certification schemes for sustainable biofuels in the EU and the long time it has taken to get these schemes officially approved and published. July 19 was the historic date. European Commissioner for Energy Gunther Oettinger proudly presented the first seven voluntary schemes approved not only by the commission, but by member states and Parliament as well. The seven included schemes from the Roundtable of Sustainable Biofuels, the Round Table on Responsible Soy, Spain’s Abengoa and the UK’s Greenergy, among others.

The delay was due to a number of reasons, the most important being, without any doubt, that all stakeholders and regulators were entering uncharted waters. There was no experience, no quick cut-and-paste of similar implementation schemes. These schemes had to be built step by step. Secondly, the commission services had too many implementation measures to attend to while being understaffed, and thus brought in consultants to do the assessments. The downside, however, is that if your funds dry up, consultants stop working. That happened late last year. A third likely reason for the delay was that the commission wanted to be absolutely certain that whatever schemes were approved, they would be watertight.

Individual companies, stakeholder groups, consortium of companies and a consultancy developed schemes. It was a gruelling exercise that required lots of time, money and specialized skills. There are various reasons for tackling such an exercise, ranging from seeing a pure business opportunity, creating added value for the product, securing civil society support, and, for some, the most important reason, guaranteeing market access throughout the EU.

Germany marched ahead of the troops. The first scheme that started to operate was the German International Sustainability and Carbon Certification. It received strong government support, including financial, and once it was used, resulted in a premium for ISCC-certified products. The estimated number of scheme users is around 650. The other German scheme, REDCert, is even more popular and being used by 900 companies, although not yet EU approved.

The price to pay for obtaining EU approval may be high but the alternative of waiting for national member state schemes is even more costly. The majority of the EU countries still have no scheme in place. But above all, using a national scheme doesn’t mean one can use that certification beyond the borders of that country, unless the scheme is explicitly recognized by another country. Indeed, that is not what one would expect from a united Europe where mutual recognition and free movement are supposed to apply to all goods, services and capital. The EU is never easy. EU recognition of a voluntary scheme means no trade obstacle within the EU. That is a price worth paying, if your product needs to find markets outside the country of production. And this logic applies to most, if not all, non-Germany-based producers.

There is one final point—a flawless working of these schemes is critically important. Environmental and other nongovernmental organizations (NGOs) will do everything in their power to demonstrate that the schemes do not deliver what they say they should. Even if they will need to plough through several hundred pages of documents to find a failure, they will do it. And for sure, they will find weak spots allowing them to claim that some schemes, or parts of schemes, are equal to green washing. Time will tell, but it seems clear that NGOs will see certification schemes as another opportunity to criticize biofuel policy.

To my mind, the two weakest links in the chain are the independent auditor and the exclusion of additional environmental and social criteria, in some cases. Even though the latter is not required under the EC Renewable Energy Directive, it will be used by NGOs to say that some schemes are questionable. Independent auditing is obviously crucial. The first report that surfaces questioning the quality or independence of audits carried out will put a bomb under the schemes.

I am also concerned about the number of schemes with another 18 awaiting approval. I am not convinced that so many schemes will be needed, or will work well. The more voluntary schemes, along with another 20-plus national schemes potentially, the greater the risk for mistakes and vulnerability to NGO criticism.

For those that have their scheme approved, however, it is a great way to have market access to all the 27 member states of the EU, without question.

Author: Robert Vierhout
Secretary-general, ePURE
Vierhout@epure.org