Belgian imports of ethanol from sugar cane: shared responsibilities among EU MS of human rights violations

Case Study 8: Belgain consumption of sugarcan ethanol from Brazil and Peru. Shared responsibilities of human rights violations.

How is the sugar cane ethanol value chain structured (actors and stakeholders, mechanisms, flows)?
What are the roles, gaps and possibilities that different sectoral policieis offer for tackling the identified issues in the ethanol-based biofuels supply chain?
What roles are other policies playing on biofuel/energy markets?

Belgium is relying on biofuels to achieve its CO2 emissions reductions. Previous studies have shown the negative effects associated with biodiesel production, but there’s insufficient information on negative effects around bioethanol production, which is expected to increase in the coming years. This case study shows that while the government promotes these fuels as low-carbon, they have serious, underreported environmental and social impacts, especially in countries like Brazil and Peru, from which much of the bioethanol is sourced. Despite efforts to reduce reliance on first-generation biofuels, Belgium still imports large amounts. Oxfam calls for a prohibition of biofuels produced from food or energy crops, and proposes stricter assessments of biofuel production impacts to ensure truly sustainable energy solutions.

The governance framework for biofuels in the European Union (EU) is to a large extent driven by the Renewable Energy Directive (RED) which was introduced in 2011 and subsequently updated through various iterations (RED II, III, and IV). This directive steers member states to increase the share of renewable energy, including biofuels, in their energy mix. The Renewable Energy Directive is part of the EU’s Clean Energy for All Europeans package which emphasizes the reduction of greenhouse gas emissions and the move away from fossil fuels. However, gaps in policy enforcement, such as transparency and sustainability criteria, remain challenges. Besides these, the trade in biofuels is impacted by the EU climate law and investment and trade policies such as the EU-Peru-Colombia FTA, Green Bonds and Next Generation EU. The EU-Mercosur association agreement and the Corporate Sustainability Due Diligence Directive may have a significant impact on the biofuels trade in the future.

The biofuels supply chain is heavily influenced by the current trade regimes (FTAs), climate and energy policies as well as investment and fiscal policies. The case study explores the impact of the following policy frameworks.

Brazil: Brazil’s Nationally Determined Contribution (NDC) towards achieving the United Nations Framework Convention on Climate Change (UNFCCC), National Policy on Climate Change (Law 12,187/2009), the Brazilian Forest Code (Law 12,651/2012) and the Law on the National System of Conservation Units (Law 9,985/2000)
Peru: Law 28,054/2007 for the Biofuels Market Promotion, which established the PROBIOCOM programme, Supreme Decree 021‐2007 EM regulates the commercialization of biofuels and sets biofuel blending minimums. Peru has no tax incentives or other direct support mechanisms for biofuel.
European Union and Belgium: EU and Belgian climate and energy policies such as the Renewable Energy Directive (I-IV), the EU climate law and the Belgian Climate and Energy Plan, Corporate Sustainable Due Diligence (CSDD) Directive, and investment and trade policies (EU-Mercosur Association Agreement, EU-Peru-Colombia FTA, Green Bonds, Next Generation EU).

While examining competitiveness is not the core focus of this study, it touches upon this subject in relation to competition between food markets and biofuel markets for the use of sugarcane. Brazil’s sugar and ethanol markets are closely interlinked, with sugarcane mills having the flexibility to adjust production based on market prices for sugar and ethanol. The competitiveness of ethanol is tied to domestic gasoline prices, as ethanol must be priced at 70% or lower compared to gasoline to drive demand. This dynamic, alongside geopolitical influences and weather conditions affecting sugar yields, creates significant volatility.

Beyond market competition, the study touches upon competition between policy solutions towards climate change. Were biofuels where once hailed as an environmental-friendly alternative to fossil fuels, land-based biofuels are under increased scrutiny for their negative environmental and social impact. In the policy-mix on combatting climate change, the use of biofuels should thus get a less prominent place in favour of more socially and environmentally-sound solutions, including consumption-reducing policies such as stimulating public transportation and prioritizing transport modes with lower overall emissions.

This research report aims to shed light on the impacts on livelihoods, human rights, and the environment in producing countries driven by the increasing hunger for biofuels. It seeks to map the sugarcane ethanol value chain from Brazil and Peru into Belgium, and to identify its key stakeholders and their roles and responsibilities in respecting social sustainability. It does this via the following methodological tools: value chain mapping, stakeholder consultations (qualitative interviews and focus groups), document analysis, a controversy scan and finally, policy analysis.

This study draws from fieldwork done in Peru between June and July 2022, interviewing different stakeholders. This fieldwork was complemented by a controversy scan investigating Brazilian sugarcane ethanol producers. The study has analysed more than 60 companies while reconstructing the sugarcane- based bioethanol supply chain from Peru and Brazil to Belgium. It builds on the evidence from a previous Oxfam report on a Peruvian plantation set up with the support of Belgium which also found linkages to several European countries acting as transhipment hubs. Brazil was added to the research given it is the main provider of sugarcane ethanol to Belgium.

The following sources have been used during the data collection:

Review of current legislation (energy, climate, trade agreements, ) to see how it influences the demand, and which criteria for sustainability and human rights diligence are included (in consumer countries, and producer countries – e.g. how land rights are protected and conflicts resolved)
Interviews and focus groups with stakeholders involved in the value chain (from farmers to producing companies)
Data on food prices and food price changes.
Data on water consumption and ecosystem changes in the local area of production + data on climate change impacts in areas of production.

The lax environmental and human rights safeguards within EU policies promoting “clean” energies have done little to prevent the negative impacts of land‐based biofuels destined for the EU market. For member states like Belgium, where the growth of ethanol consumption is strongly driven by the legal obligation and incentives to incorporate biofuels into the fuel blend during the past 15 years, the legal framework has triggered human and environmental rights abuses in the sugarcane ethanol supply chain.

Climate targets. The EU and its Member States should stop counting land-based biofuels, including sugarcane, towards Renewable Energy Directive (RED) targets by 2025, and only include advanced biofuels after a comprehensive human rights impact assessment.
Human rights assessments and defenders. The EU and its Member States should adopt additional sustainability criteria (social and environmental) in the transposition of RED III, improve monitoring with independent audits, support human rights defenders and social movements, and include accountability mechanisms for biofuel production impacts, especially in third countries.
Trade and transparency. Harmonize the 16 trading codes for sugarcane ethanol, strengthen disclosure obligations for companies, implement standardized reporting on biofuel production and imports, ensure transparency in feedstock supply chains, ensure that free trade agreements do not harm rural communities, and only adopt the EU-Mercosur Association Agreement if it aligns with the EU Green Deal and considers the social and economic impacts on small farmers and workers.
Food and transport. Strong safeguards must be included in RED, CSDDD and other initiatives to mitigate human rights and environmental impacts from alternative energy sources, while policies should also encourage efficient public transportation over private vehicle use to lower carbon emissions. Additionally, governments should support agroecological local food production, empower small-scale farmers in low-income countries, and prioritize low-emission transport methods and enhance supply chain efficiency.

Case Study Report: Belgian Consumption of Sugarcane Ethanol from Brazil and Peru – Shared Responsibilities of Human Rights Violations

Blog Post: Biofuels: A false alternative with dire consequences

Case Study Leader

Oxfam Solidarité - Oxfam Solidariteit

Alba Saray Pérez-Terán

SDG's Addressed

Geographical Focus and Scale

Peru

Brazil

Belgium

Product and market focus

The production of sugar cane ethanol for biofuels produced in Peru and Brazil and consumed in the European Union.

Key stakeholders

Research design: farmers, local authorities, companies and legislators
Research level and data gathering: Farmers, Press, Activists, local authorities, companies (producing companies, transforming partners)
Sharing outputs: 1) local authorities, companies, local and international NGOs (e.g. CLARA network) through video conferences and printed materials; 2) consumer and the wider audience through media; 3) Engaging with legislators to improve relevant legislation based on the results of the case study.