In this paper, I have employed the concept of ‘roundtabling’ to explain the evolutionary dynamics of biofuel sustainability certifications in the context of current developments in other agro-food and forestry sectors. I examined how roundtabling unfolds in a competitive environment and with what consequences in terms of governance quality, share in the market for sustainability
certifications, and distributional outcomes in relation to the geographic origin of certified entities. The case study of biofuel is particularly instructive as
mandatory biofuel sustainability certification in the EU is the first of its kind in agro-food and forestry – it has created a captive market for sustainability. This allows analysts to focus on the key features of how competition unfolds in sustainability certification markets without the confounding factors of first-mover advantage and the restraints of a small market size for sustainability certification typical of many other products.
Sustainability roundtables and stewardship councils (SRs) have adopted an ever more complex web of institutional and governance features, development and managerial systems, time- and resource-consuming meetings, and the enactment of procedures to meet codes of good practice in standard setting and
management. These slow down processes, add costs, and in the long run may create stakeholder fatigue. In one way, roundtabling is opening (or adding) space for mainstream competitors to establish substantial presence in the
market for sustainability certifications. Commercially-oriented initiatives are generally less democratic, leaner, quicker, and more tuned in with industry interests. They also tend to more easily discriminate against small players and actors in developing countries; they feature industry-dominated and top-down governance structures; and they do not attempt to give equal voice to
stakeholders. But in another way, NGOs and social movements are using roundtabling to place normative pressure upon commercially-oriented initiatives via retailers and the threat of consumer boycotts. As a result, these initiatives are progressively adopting seemingly more inclusive procedures and institutional features. Still, they do so generally late in the standard development and certification process – sometimes even ex-post or as an afterthought – and do so in ways that heavily circumscribe effective participation by smaller or marginalized stakeholders. Thus, they rarely if ever go through a deep process of
‘roundtabling’.
Is this situation likely to change? The experience of FSC provides some hope. It features advanced ‘roundtabling’ elements that seem to have been used by NGOs to impart normative pressure on more commercially-driven competitors in forestry certification. As of 2009, FSC had certified 115 million ha of forest in 82 countries, while its main competitor PEFC had certified 225 million ha in 19 countries (mostly in the North). In other words, FSC has been able to maintain a substantial presence in the certification market – partly because it started earlier than its main competitor, and partly because of public procurement and
regulatory support in key timber consuming countries (Guldbrandsen 2012). In capture fisheries, however, MSC features much lighter roundtabling
characteristics even though it enjoyed the same head-start that FSC had over
competitors. After some initial resistance, MSC has also benefited from inter-governmental (FAO) recognition and inter-governmental support in helping fisheries achieve certification (Ibid.). But, most importantly, MSC has used commercially aggressive strategies to convince major retailers (especially Wal-Mart) to use its labels as part of their move towards sustainability. This way, it was able to establish a quasi-monopolistic situation in the sustainability market. But in view of lack of substantial competitors, MSC has taken only minor revisions in its governance structure, remains more top-down and less inclusive than FSC and discriminates in practice against Southern fisheries (Ponte 2008).
RSB in a way went back to the original spirit of FSC by going through a deep roundtabling process. But differently from FSC, it had to face a commercially aggressive and lean competitor from the beginning. Public regulation through the EU RED directive essentially created a captive market for biofuel
sustainability, but it did so for all recognized certifications, irrespectively of how strict their standards (beyond the minimum set of standards set in the directive) or how inclusive, equitable and transparent their governance structures. In the case of biofuel, regulation played a function of level-field formation in
sustainability, but with a narrow take and main focus on GHG emission reductions. It disregarded or downplayed other important social and
environmental issues. It raised the overall sustainability bar, but at a low level.
National-level direct or indirect government support went behind selected private certifications (in Germany first, then in France, the Netherlands and the UK). The fastest and most aggressive mover in this context (ISCC) was able to establish a substantial presence in the market and thus close off, at least for the
system (RSB). It is unlikely that RSB will be able to ride the normative wave that helped FSC to remain commercially relevant and that led to improvements in the features of its competitors. RSB did not enjoy the FSC’s head-start over
competitors, biofuels are mixed with regular fuel – making consumer boycotts difficult to carry out, and social movements and NGOs are generally against sustainability certification for biofuels, thus RSB is in a much weaker position in terms of mobilizing the normative push that it would need.
Appropriate regulation could indeed claw back some power from private
authority and shape SRs and their commercially-oriented competitors to deliver common welfare gains for all players in global value chains (Mayer and Gereffi 2010). This would have been even more likely to happen in biofuels where regulation itself has created a captive market for sustainability certification. And yet, EU RED failed to properly include social issues and indirect land use change considerations (see Levidow 2013 for more details). It also failed to require a minimum set of standards on the quality of procedures, participation,
transparency and accountability of EU-recognized certification initiatives.
Including these features would have led to far more democratic certification systems, more meaningful participation from feedstock producers in the South (especially smallholders) and a more geographically equitable distribution of benefits. EU regulation, however, limited itself to indicate what parameters of sustainability should be included in certification systems (and especially GHG emission reduction) and provided little or no guidance on governance best practices. As a result, the most commercially-oriented, top-down and global North-focused biofuel certification scheme has monopolized the sustainability market thus far.
Revisions to EU regulation are still a possibility. NGOs and social movements with a less ideological stance against sustainability certification of biofuels could still pressure MEPs and the European Commission to include governance best practices to sustainability standards. However, even if it succeeded, the MSC experience teaches us that it is far easier to radically adjust governance systems during their development phase than during their further revision. And even when this is possible, some of the unequal features that emerged from the original standard-making process cannot be properly addressed ex-post. All in all, EU regulation on biofuels was a lost opportunity and does not bode well for the future of sustainability in agriculture and forestry.
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