How can the biofuels and bio-based chemicals industries spread social equality?

By Zoe Greindl

The second in a series of articles titled 'the voice of young people',  from the opinion formers of the future.  

In July 2020, leaders of the European Commission announced 30% of the €750 billion post COVID-19 recovery package would go to climate action. This includes the EU Green Deal, which has an overarching aim of zero net emissions of greenhouse gases by 2050, whilst ensuring a just and equal society where ‘no one is left behind’. The production of fuels and materials from biomass decreases reliance on fossil fuels, providing a more sustainable alternative to traditional petroleum-derived chemicals and diversifying sources of energy supply. In twenty years, biofuel production has increased ten-fold. How can this growing industry spread social equality and what social policies can companies adopt to achieve this?

Whilst the chemical and refining industries are typically capital intensive, biomass production is labour intensive, leading to a 16% higher overall upstream employment. This can in turn generate socioeconomic advantages due to an increase in farm output, which may both increase rural incomes and provide a rural development boost. By diversifying energy supplies, biofuels stabilise energy prices and could be an important source of energy security. However, increasing demand for biofuels has previously triggered land-grabbing, posing a threat to local livelihoods. To dictate whether positive or negative effects dominate, it is important to regulate the social impacts of the industry.

The EU Green Deal places a strong emphasis on job creation, inclusiveness and fair returns for all members of the supply chain. These are the principles that form the Just Transition Mechanism (JTM), to which €150 billion has been allocated. The fund seeks to protect people and citizens which will be most affected by the transition, for example by facilitating access to clean energy and offering re-skilling and employment opportunities. The fund also plans to protect companies active in carbon-intensive industries by supporting their transition to low-carbon technologies, providing easier access to loans and investing in climate-resilient technologies research.

However, these aims are not yet included in any regulation. The proposal for a regulation establishing the Just Transition Fund mentions jobs and training but will that be a compulsory part or just optional? Existing regulation does not set a good precedent either. The Renewable Energy Directive (RED), which has been around for while, sets the rules to assist Europe in its transition away from fossil fuels, with a binding renewable energy target of 32% for 2030. The RED contains concrete targets and policies related to the production of biofuels. It mentions social aspects but there are no binding requirements, meaning the potential social benefits associated with biofuels production are not always realised. To guarantee sustainable production on both environmental and social levels, companies can use voluntary certification schemes that regulate social issues such as child labour, discrimination and minimum wages. For example, the Roundtable on Sustainable Biofuels addresses food security by demanding producers to prove that their efforts to alleviate impacts to food security are successful. The Rountable on Sustainable Palm Oil and Bonsucro also address social aspects. However, these Schemes are taken up by only a minority of companies.

There is a serious inconsistency in Europe committing to create a ‘just transition’ but not enforcing this in regulations. In my opinion, it is crucial for the RED and other Directives to incorporate additional social policies with a special focus on food and energy security and labour conditions. This would benefit all parties in the supply chain by not only protecting livelihoods but also increasing efficiency and productivity. The JTM fund must be utilised to help companies comply with these new social regulations. Some of the potential unwanted consequences of biofuels and bio-based chemical production cannot be covered by criteria for the producers alone and require an integrated policy approach that goes beyond directives and certification schemes. The biofuels and bio-based chemicals industries are intrinsically linked to the energy, agriculture, environment and transport industries; policies must be coherent and interlinked to ensure social equality throughout.

Published: 2 October 20

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