Learning: Policy, Regulation & Certification
EU legislation for a circular economy
Climate change is one of the biggest crises threatening our lives. To address this threat, the EU aims to become climate neutral by the year 2050 and transition to a circular economy. The Circular Economy Action Plan (CEAP) was developed to support this. This plan contains 35 planned actions that aim to "make sustainable products, services and business models the norm and transform consumption patterns so that no waste is produced in the first place".
Bio-based materials and products play an important role in achieving a climate-neutral, circular economy when they are produced and used in a sustainable way. But how do we know that they are actually produced and used in a sustainable way? The EU has defined criteria to determine what is considered sustainable production and use. These are called sustainability criteria. For example, biomass cannot be produced on land with high biodiversity and production of energy from such biomass should avoid sufficient greenhouse gas emissions compared to energy produced from fossil sources such as oil, coal or gas.
In the EU, sustainability criteria have been defined for fuels, heating and cooling and power generation produced from biomass sources. In the future, the EU may consider defining sustainability criteria for other bio-based materials and products. Currently, the European Commission is working to define the first set of sustainability criteria that research projects must comply with if they receive funding from the EU for developing new bio-based materials and products.
Okay, so there are criteria to define what is sustainably produced. But when you buy a product, how do you know that it meets these sustainable criteria in each step of the entire value chain of the bio-based product? For that reason, certification has been developed. Certification schemes have translated sustainability criteria into technical standards that define specific production rules and practices. A sustainability certificate is an independent ‘seal’ which auditors issue after checking that technical standards are met during production and that sustainability claims for a final product can be traced back to the origin of the biomass used.
Sustainability certification is the most extended method in the EU to prove that biofuels put into the EU market are sustainable. Currently, the European Commission has officially recognised 15 voluntary and national certification schemes for the production of sustainable biofuels, bioliquids and biomass fuels.
Using certification and policy support to steer towards circularity
Bio-based options are becoming available for more and more products. The market has developed voluntary certification to prove that sustainability criteria have been met. Companies choose to be certified, so they can offer their clients a product that has proven additional values. Clients in this way can steer their consumption towards being more circular. However, bio-based products are often still more expensive than conventional products, for reasons of higher production costs, smaller production scales and the additional costs for certification. This limits the number of clients buying bio-based products and therewith the growth of bio-based products on the market. To support higher use of cleaner products, governments are formulating support policies. For example, using lower tax rates for bio-based products or providing subsidies to develop cleaner products.
From voluntary growth to obligation
Support policies definitely help the markets for bio-based products grow, but this growth may still be limited. On the consumption side, the limit could be the number of consumers willing to pay a higher price for a bio-based product. On the production side, even with the support policies, it will still take some time for the cleaner producers to reach the situation that they are able to compete with the conventional producers.
For some products, society may want developments to go faster. This is, for example, is the case for biofuels. In Europe, we have agreed to increase the share of energy from renewable sources, which includes the use of biofuels in transport. To help achieve this target, the European Commission has adopted regulation that requires petrol and diesel producers to blend a specific percentage of sustainable biofuel. This obligation means there is a guaranteed increasing market for producers of sustainable biofuels that sell their products to fuel suppliers that have such obligation. EU Member States have established these obligations at national level, and in many cases have established penalties that fuel producers have to pay if they do not meet such obligations.