Biofuel governance in Brazil and the EU

This thesis examines the global governance of sustainable biofuels, with a specific focus on Brazil and the European Union (EU) as major players in the production, trade and use of first-generation liquid biofuels. Biofuels are solid, liquid or gas fuels derived from biomass sources such as starch, sugars, fat, wood, or waste. So-called first generation liquid biofuels are those derived either from sugar or starch from food crops such as sugarcane or corn, which are converted to bioethanol; or from vegetable oils (soy, rapeseed, palm) or animal fats, which are converted to biodiesel. This thesis focuses on first-generation liquid biofuels because they are produced on a large scale for transport fuel and are under intense scrutiny with regard to sustainability and potential competition with food security.

The EU, one of the largest markets for biofuels, is leading in the attempt to promote global trade in “sustainable” biofuels. Brazil, as a leading producer and strong proponent of a global biofuels market and a key exporter to the EU, has to engage with the EU sustainability imperatives that now dominate global biofuel trade and governance debates. While Brazil is often believed to be able to dictate biofuel developments within its borders, its authority to continue to do so, given a rapidly evolving global biofuel trade and governance context, is becoming less evident and needs to be examined.

Biofuels have been on the national governance agenda of some countries since the 1970s, but emerged on the global governance agenda in the late 1990s, in response to the twin challenges of the search for energy security and addressing climate change. Biofuel policies are being implemented by countries across the globe with the ambition to (partly) replace fossil fuels for transport with renewable alternatives. A vast conglomerate of state and non-state initiatives are involved in the multilevel governance of biofuels over the past few years. Governing biofuels is thus a complex multifaceted (global) governance challenge, with multiple sectors, multiple actors, and multiples sites of governance now emerging and interacting, and divergent notions of sustainability deployed herein. In this context, it is important to understand how governance of biofuels has been approached, and how existing approaches to sustainability have fared, and whose notion of sustainability is shaping global biofuel trade and markets.

This thesis thus analyses evolving biofuel governance arrangements in Brazil and the EU and the interactions between them, including diverse notions of sustainability contained herein. A central concern is whether, and to what extent, the EU has succeeded in exporting its own notions of sustainability beyond its borders, in seeking to create a global market for sustainable biofuels.

Through detailed analysis in four empirical chapters (all published), the thesis answers two cross-cutting research questions:

• How have biofuels been governed in the EU and Brazil over time, and what (conflicting or converging) notions of sustainability are embodied in these evolving governance arrangements?
• How has the EU sought to export its notions of sustainability beyond its borders, with particular focus on Brazil, and (how) has it succeeded in doing so?

Chapter 2 traces the historical evolution of bioethanol and biodiesel policies and governance arrangements in Brazil, including the role of key actors. In doing so, it explains how biofuels in Brazil have been governed over time, including evolving understandings of sustainability therein. The chapter finds that ethanol-focused governance arrangements focused primarily on energy security rather than sustainability concerns. In contrast, biodiesel governance initially was also concerned with (social) sustainability, particularly questions of rural development and social inclusion of small farmers in biodiesel production. Over time, however, the analysis shows that both types of biofuels are being governed to further agricultural and energy goals, rather than social sustainability objectives. This is illustrated by the growing focus on increasing blending targets for biodiesel, rather than on realizing social inclusion and rural development goals. These policy objectives (and their implementation) are also driven primarily by domestic imperatives, rather than export considerations.

Chapter 3 builds on the historical tracing of biofuel governance arrangements in Brazil to analyse the social inclusion component of Brazilian biodiesel policies. The chapter focuses on the 2004 biodiesel policy and its two main objectives: to advance biodiesel as a transportation fuel and to foster social inclusion of family farmers through participation in the biodiesel chain. The chapter analyzes the extent to which cooperatives are involved in integrating family farmers into the biodiesel chain and what this means for the social sustainability of biodiesel, taking the northeast state of Bahia as a case study area. The findings show that through the biodiesel policy, cooperatives—until then a marginal phenomenon in northern Brazil—increased their membership, were empowered, and contributed to the economic development of a significant group of family farmers. However, these family farmers have not been substantially included in the biodiesel production chain itself. The chapter reveals the complexity of realizing social sustainability goals in biofuel governance. It shows that, although agricultural cooperatives can serve as intermediaries to facilitate family farmer inclusion in sustainable production, it is questionable whether a focus on producing specific quantities of global commodities, such as biofuels, is a suitable development trajectory for family farmers.

Chapter 4 moves to consider the global context for Brazilian biofuel governance and policies. It explores how global demand for biofuels has been stimulated by European Union policies that promote biofuels as a potential sustainable source of transport fuel, and strategies used by the EU to export its evolving notions of sustainability beyond its own borders. The chapter analyzes how Brazil has navigated an evolving global governance context for sustainable biofuels, in particular how it has responded to EU biofuel sustainability imperatives. It focuses specifically on analyzing how these debates have played out in the context of World Trade Organization (WTO) disciplines governing trade in commodities such as biofuels. The chapter finds that while Brazil emphasizes the social and developmental objectives of its biofuel policies in a domestic context, it frames itself globally as a leading producer of (environmentally) sustainable biofuels. In so doing, it navigates intersecting spheres of governance authority, such as the EU and the WTO, in a manner that promotes its own biofuel policy agenda, partly by seeking to reframe “sustainability” debates internationally to reflect its developmental agenda.

Chapter 5 shifts to analysing in detail how biofuel governance arrangements have evolved in the EU over time, and how understandings of sustainable biofuels have evolved within these arrangements. The chapter analyses a decade of biofuel policy making in the EU, with a focus on the nature and functioning of the EU’s novel hybrid (public-private) biofuel governance arrangements, and how notions of sustainability have been negotiated and established herein. The EU’s hybrid governance approach has been implemented since 2009, involving a meta-standard established by the EU and specific sustainability requirements developed by private and hybrid actors to comply with the meta-standard. The expectation underpinning a hybrid governance approach was that private initiatives would add their own additional sustainability objectives to the mandatory EU meta-standard, and hence lead to greater sustainability in biofuels production, both internally within and external to the EU. The chapter finds that instead of yielding an increasingly stringent set of sustainability standards, this hybrid approach is characterized by contested notions of sustainability, with a trend towards less ambitious or lowest common denominator industry-led standards. At the same time, while the EU has continuously increased the share of biofuels and renewable energies and the biomass imports in its transport policies, it has recently become more cautious with regard to potential negative side-effects of stimulating biofuel production, in particular, indirect land use change (ILUC) and food price increases in developing countries. Its biofuel policy directions are therefore yet again being adjusted and are currently at a critical juncture.

In concluding, Chapter 6 combines the insights of the four empirical chapters in order to answer the main research questions. It sums up how biofuels have been governed in the EU and Brazil over time, and what notions of sustainability are embodied in these evolving governance arrangements. It also addresses how the EU has sought to export its notions of sustainability beyond its borders and whether it has succeeded in doing so.

The thesis finds that governance arrangements for the EU and Brazil are both primarily state-driven, and sustainability considerations included in these arrangements reflect state priorities, such as environmental concerns (in the case of the EU) and social inclusion and rural development (in the case of Brazil). In Brazil, biofuel governance has been characterized by a strong role for the state, without much governance authority transferred to non-state actors. The EU has relied more upon private actors to operationalize its meta-standards for sustainability. EU’s novel public-private hybrid governance approach has resulted in a mandatory meta-standard for sustainability, but this meta-standard is a minimum floor rather than a set of increasingly ambitious sustainability requirements.

In Brazil, while non-state intermediaries, such as agricultural cooperatives, have been given an important role in creation and governance of a biofuel market, partly to further social sustainability goals, these have been only partially realized. Furthermore, in both cases, the involvement of non-state actors has not resulted in more stringent sustainability standards being developed or realized in practice.

The thesis findings show, furthermore, that the EU has sought many different ways to export its notions of sustainability beyond its borders, including, amongst others, to Brazil. However, its hybrid policy approach has had only a limited influence on domestic practices within Brazil. In concluding, the thesis highlights how persisting controversies over sustainability have resulted in the EU moving towards ever more stringent regulation of first-generation biofuels, even as the opposite dynamic can be observed in Brazil. The analysis reveals, more broadly, that what constitutes “sustainable biofuels” and how sustainability can be furthered remains subject to continuous debate. Sustainability is contested and context-based, even as the authority to define and operationalize it continues to lie largely with states.