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By the end of 2007, the European Commission aims to devise environmental standards for biofuels -- standards that will be of particular interest to Brazil, and ultimately, to the agriculture sector globally. While so-called sustainability standards will likely come under close scrutiny as a potential non-tariff trade barrier, the commission has a narrow intent in mind for them which could prove acceptable to Brazil, the world's emerging biofuels leader.
If these standards catch on beyond the EU's borders, they could set a precedent for the future development of other codes of conduct for industrial agriculture. Such standards could also lead to a further rise in already-high agriculture commodity prices -- which is good news for Latin America's Southern Cone.
The EU will require 10 percent of automotive fuels sold within the union to comprise alternative fuels (not fossil-fuel-based) by 2020. The EU's interest in biofuels is part of a larger energy strategy recently devised to secure three objectives: efficiency, carbon emission reduction and -- most important to German Chancellor Angela Merkel, who devised the policy -- energy security.
Importing Brazil's sugar-cane-based ethanol currently is the most appealing way, in terms of price and supply, to meet the 10 percent requirement, but critics have warned that in its pursuit of cleaner-burning fuels, Europe ironically risks funding ecological destruction. The poster child for this concern is the Amazon rainforest, which has been reduced at alarming rates in the past decade, in part to allow for soya crop expansion. Therefore environmental certification is being proposed to accomplish two specific objectives: to make sure less carbon dioxide is released in the production of biofuels than will be conserved by burning them in place of gasoline, and to make sure that valuable wildlife is not destroyed to make room for plantations. The second goal aims to preserve biodiversity but also links back to the carbon concern; destruction of the Amazon forest, wetlands or other similar areas would constitute the destruction of natural carbon sinks -- usually by burning, which releases more carbon into the atmosphere.
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