Some savvy ethanol producers saw the writing on the wall and began the process of certifying the sustainability of their product a couple of years ago, but others are only now coming to realize the importance of certification, if they want to remain a player in the booming ethanol export business.
In July 2011, the European Union belatedly approved the first seven voluntary sustainability schemes for biofuels as required by the Renewable Energy Directive. The directive, commonly referred to as RED, requires all 27 EU member states to increase the amount of renewable energy they use to 20 percent by 2020. Ten percent of the member states’ transportation fuel must be derived from sustainable biofuels by 2020. To qualify as sustainable, biofuels must be certified through one of the approved schemes to ensure that they are not derived from lands converted from rainforests or grasslands, that the entire production process is deemed sustainable and that the biofuels reduce greenhouse gas (GHG) emissions by 35 percent compared to petroleum. The directive came into effect in December 2010, but the European Commission did not approve the first set of schemes until seven months later. Sustainability schemes are approved by the EC, but they are operated by private companies and institutions. A total of 25 schemes were submitted for EC approval prior to the July announcement. The commission is continuing to assess the applications not yet approved, but as of late 2011, the seven originally recognized schemes continue to be the only methods of certifying sustainability on a 27-member state scale. Other national systems may be used, but are only valid in the member state where the system was created.
For American ethanol producers seeking to supply a piece of the European demand, certification of their fuel has become a must-have if they want to be a competitive player in the market. Some U.S. companies have gone through the process and Robert Demianew, U.S. director for certifications for Control Union Inc., says it’s not too late for those producers who are not yet certified. Demianew’s company has seen steady interest from producers over the past year and he expects that to continue. “We have ethanol plants coming onboard every month,” he says. “We actually now have biodiesel plants coming on. The opportunities are still there. The EU is a very big market, so the demand side is still very strong. Depending on the particular markets that you are in, or the particular products you’re dealing with, if you are going to be selling to Europe, very likely you’ll be running into demand for these types of certifications.”
So what does it take to become certified? First and foremost, ethanol producers should evaluate the marketplace and identify a buyer for their product. Once they have determined their role in the EU market, they can go about the business of selecting a scheme. The International Sustainability and Carbon Certification is the most well-known of the approved schemes and has been the scheme of choice to date in North America. Other approved schemes, such as the Roundtable on Sustainable Biofuels, have only recently begun to implement their standards. Each scheme has its own unique qualities. Many were developed directly for the EU and most are feedstock or region-specific, so the producer should carefully select the scheme that best meets its needs.
Matthew Rudolph, regional manager, Americas, at the RSB, says producers should approach certification as not just being something they need, but rather something they can do that will prove their sustainability. “The majority of producers are very efficient, but there are a few bad apples,” he says. “If biofuels are done the right way, one way they can demonstrate that they are on the same side as the environmentalists is by becoming certified.”
Rudolph says the certification process consists of four steps: the producer’s self-evaluation, which includes self-risk assessment and self-evaluation against the scheme, the scheme’s review of the producer’s information, approval and issuance of a code to the producer, and the producer’s selection of a certification body. After a certification body is contacted by the producer, it conducts an audit to determine the producer’s sustainability and issues a certificate.
As of late 2011, the Control Union had certified the sustainability of about 25 U.S. ethanol companies under the ISCC standard. The certification process is just that—a process—but Demianew says it doesn’t have to be a painful one. In fact, it is very likely the ethanol plant will be halfway to certification before the actual process even begins. “Most of the ethanol plants are probably 50 to 60 percent ready, but they need to make sure they have the GHGs calculated and that they have enough of a farm base ready to sign,” he says.
Because the EU did not create a default GHG value for corn ethanol, some facilities may need to hire a consultant to determine their GHG calculations. Every step of the production process must be considered when determining the plant’s GHG value, right down to the grams of carbon dioxide equivalent produced for every bushel of corn. Some plants employ personnel able to conduct these evaluations, but others will have to bring in consultants at an added expense.
Calculating GHG emissions takes time, but convincing farmers to sign self-declarations could prove to be the most difficult step for producers. To show a sustainable chain of production, ethanol plants must be able to prove that a percentage of their feedstock has been certified as sustainable. This step begins by convincing farmers to sign a self-declaration agreeing to commit to sustainable agriculture production. The self-declarations are not complicated, nor do they typically require any changes at the farm. They also do not cost the farmer anything or subject them to frequent checkups or potential fines. However, Demianew says ethanol plants have sometimes had a hard time explaining that to their feedstock providers, leaving the farmers skeptical and unaware of the importance of the document.
“The challenge to the industry is to get this outreach to the farmers and let them know what it is they’re participating in,” he says. “We have not seen that the farmers have to make any changes to their current practices. Farmers are generally good stewards of the land. The difference here is that they just have to demonstrate through documentation what they’re doing. If they can do that, they can participate. But farmers can be somewhat reluctant to sign anything, which means the elevator or ethanol plants need to encourage, inform and educate the farmers about what the documentation is.”
Some of the more creative efforts taken by ethanol plants to inform farmers about the sustainability process include town hall meetings, offering higher purchase prices for certified corn or incentives in the form of gift cards to farmers who participate. The number of farmers required to participate in the process will vary depending on the plant and selected scheme and, in some cases, the ethanol plants are farmer-owned and more likely to have success in signing up farmers to the program.
Worth the Cost?
Cost of certification could be the largest drawback for producers when considering taking on this task. Participation in the schemes is voluntary so it may be difficult to justify the expense, but Rudolph stresses the value of proven sustainability and says certification could also be attractive to financiers. And considering that the domestic market is at its blend wall, anything producers can do to expand their marketing abilities may be well worth the cost. Demianew says certification can be viewed by ethanol producers as an outlet to new markets and an assurance that they will be able to enter the European market if and when they decide to do so. They can go through this process and not sell one gallon into Europe,” he says. “They might sell it on the domestic market, but they want to be in the position so that when that opportunity opens up they can sell it.”
• International Sustainability and Carbon
Certification—a global initiative including a large
number of companies from the supply chain and
non-governmental organizations including the
World Wildlife Fund.
• Bonsucro EU— a roundtable initiative that serves
as a standard for sugarcane-based ethanol with a
focus on Brazilian sugarcane production.
• Roundtable for Responsible Soy EU RED—a
version of the Roundtable for Responsible Soy
scheme designed to meet the requirements
of the Renewable Energy Directive. It serves as
a standard for soy-based biodiesel with a focus on
Argentinean and Brazilian soy production.
• Roundtable on Sustainable Biofuels EU RED—a
roundtable initiative that covers all types of
biofuels and has a global scope.
• 2BSvs—otherwise known as the Biomass
Biofuels Sustainability voluntary scheme, the
scheme is a French initiative that covers all types
of biofuels and is global in scope.
• RBSA—developed by industry member Abengoa,
the scheme covers ethanol and has a global
scope. According to the EU Commission, it is
characterized by a mandatory requirement
to calculate actual GHG values as opposed to also
allowing default values.
• Greenergy Brazilian bioethanol verification
program—also an industry initiative, the standard
was developed by UK-based fuel distributor and
biodiesel producer Greenergy and is applied to
Brazilian sugarcane ethanol.
Author: Kris Bevill
Associate Editor, Ethanol Producer Magazine