Navigating in the Fog: Biofuels Production and Sustainable Development

1. 17th ICABR ConferenceINNOVATION AND POLICY FOR THE BIOECONOMY Navigating in the Fog: Biofuels Production and Sustainable Development Simona Lubieniechi and Stuart Smyth University of Saskatchewan

2. Outline • Rationale for research • Introduction • Background • Study design and methodology • Results and analysis • Conclusions

3. Rationale for research • Expert Delphi survey identified the leading economic and regulatory barriers for the Canadian biofuels industry (Lubieniechi and Smyth, 2011). • Top three barriers identified: • The absence of a co-ordinated and integrated federal-provincial policy framework; • Lack of technological development for 2nd generation biofuels; • An integrated biofuel industry vision within sustainable development policies.

4. Introduction: Sustainability • “…development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (UN – WCED). • When sustainability frameworks and initiatives are applied to biofuels, sustainability should comprise environmental, economics and social categories, effects and indicators (Hecht et al., 2009). • Sustainability is based on the interdependence between human societies and the natural environment (Fiksel et al., 2012).

5. Biofuel certification schemes started as solution to sustainability concerns. Increase in the number of certification schemes, employing different criteria, areas of definitions, approaches and methodologies (Scarlat and Dallemand, 2011): ‘+’ biofuel certification schemes can lead to standards improvement and beneficial competition; ‘-’ inconsistent schemes, loose performance parameters and different overall requirements for different types of biofuels. Introduction: Certification schemes

6. Background: Canadian biofuel industry • Biofuel producers in the US and EU are required to meet environmental sustainability standards • Unlike the EU and US, Canada relies on a voluntary certification program to promote sustainability in the biofuels industry (Elbehri et al., 2013) • In 2010, the Canadian federal government developed non-binding ‘Guiding Principles for Sustainable Biofuels in Canada’ that refer to legal, environmental and social concerns. • Goal: to identify and acknowledge ‘areas of best practices and Canadian strengths related to sustainable biofuels production’ (Natural Resources Canada, 2010; Mondou and Skogstad, 2012).

7. Background: Canadian biofuel industry • Canada participates in developing common sustainable practices in three global initiatives GBP, GSBP and ISO. • The US and EU sustainability criteria are expected to gradually affect all biofuel producers, biofuel markets and even all agricultural commodity markets (FAO, 2012). • Difficult for Canadian ethanol producers to export into the US or EU biofuels market and will need to adopt the global market requirements.

8. Background: EU • The EU sustainability criteria (2010) are set out in the Renewable Energy Directive and concentrate on GHG savings, high biodiversity value land, high carbon stock land and agro-environmental practices. • Initially required: 20% share of renewable energy in final energy consumption and a 10% share of energy from renewable sources in transport by 2020. • In 2012, the EC amended the legislation, capping the share of 1st generation biofuels at 5%. • Motivations: stimulate advanced biofuel development, consider ILUC factors when assessing biofuels GHG performance, etc. • Biofuels must emit a minimum of 35% less GHG than fossil fuels replaced, 50% by 2017.

9. Background: the US • US biofuel mandates require renewable fuels that satisfy environmental sustainability criteria such as GHG emissions savings relative to fossil fuels and ILUC restrictions. • Two main policies: Renewable Fuels Standards 1 and 2 • Introducing lifecycle GHG performance threshold standards, so renewable fuels emit fewer GHG than the fuel replaced • Sustainability requirements in the RFS2 refer to restrictions on the GHG emissions of renewable fuels, types of feedstock used, types of land that can be used to grow and harvest the feedstocks. • The RFS2 requires specific GHG emission reductions: 20% for 1st generation, 50% for advanced and 60% for cellulosic biofuels. • The methodology used for calculating GHG emissions should include all lifecycle GHG emissions of fuel, including ILUC emissions

10. Background: Brazil • Brazil is considered to be the worlds’ most efficient ethanol producer (Sorda et al., 2010; Solomon, 2010). • Advantages: its history of ethanol use, well established infrastructure and low cost feedstock. • Industry is viable largely without government subsidies (Nass et al., 2007, Solomon, 2010). • The Brazilian ethanol mandates: initially increased from 18% to 25%, but decreased in 2011 to 20% due to low sugar cane production and low ethanol supply. • Environmental and social aspects: • Mechanization of the harvest and phasing out of the sugarcane burning, higher efficiency in water use, investing in pipelines for ethanol transportation and using sugarcane residues for electricity production. • Criticisms due to the low quality manual preformed jobs, low wages and child labour, these issues have been addressed through government social programs.

11. Background: Delphi study design and methodology • The Delphi survey method is an adaptable research technique employed as an iterative and interactive process that collects opinions on specific issues or phenomena from an anonymous group of experts (Skulmoski, et al., 2007). • The method allows for the gathering information and structuring a group communication process with a large number of experts when there is limited information on specific issues (Rowe and Wright, 1999). • 2 rounds of the survey administered from May to Dec. 2012 using an online survey tool. • Each round of the survey was available for 4 weeks with weekly remainders. • First survey round comprised mainly open end questions seeking respondents’ opinion on sustainable development of the Canadian biofuels industry. • The second round aim was to rank the answers obtained in the first round according to their importance.

12. Results and analysisTable 1: Respondents demographics

13. Table 2: Importance of sustainability

14. Table 3: Priorities for sustainable development of biofuels in Canada

15. Table 4: Sustainability challenges that biofuels best address

16. Table 5: Policy measures that enhance sustainability

17. Table 6: Communicating with the public

18. Table 7: Indicators/metrics to measure sustainability

19. Policy implications/challenges • Respondents strongly indicated that economic sustainability and environmental sustainability are intricately connected • Competition in the trade of biofuels is increasing and sustainability is becoming a marketing tool for biofuels. • Biofuel industry needs to be profitable to allow for beneficial environmental impacts to develop and this is mutually dependent upon environmental benefits occurring to ensure profitability. • Sustainability criteria are an increasing part of the regulatory environment for biofuels.

20. Conclusions • The relationship between sustainable development and biofuel production is likely to increase in importance, as is witnessed by policies in the EU, US and Brazil. • Canada to develop a more definitive framework for sustainable development to be globally competitive. • This framework will need to be balanced between economic sustainability and environmental sustainability, as these concepts are mutually inclusive.

21. This research has been funded by Genome Canada and Genome Prairie Thank you!