Companies slow to join sustainable sugar drive

A fear of mandatory production standards for sugarcane appears to behind a reluctance by firms to join a sustainability initiative launched for the industry 18 months ago.

Only a handful of companies have signed on to the Better Sugarcane Initiative, which was launched by WWF and the International Finance Corporation 18 months ago as part of a drive to improve the sustainability of commodity crops.

Coca-Cola, Cadbury Schweppes, British Sugar, Tate and Lyle, Cargill and sugar trader ED and F Man are among the few companies to have joined.

In 2003, the IFC and WWF chose sugarcane as one of four global commodities, along with soybeans, palm oil and cotton, for which producers would be encouraged to adopt performance indicators on social and environmental impacts relating to production.

With 157 million tonnes of sugar produced during 2006/07 in more than 100 countries, sugar is still the world’s favourite sweetener. It is also a highly attractive source of biofuel.

The EU wants biofuels derived from plants such as sugarcane or maize - so-called ‘agro-fuels’ - to account for 10% of road fuels by 2020. And with the Department for Transport reporting a 78% greenhouse gas saving from using sugarcane-derived bioethanol instead of petrol (see pp 40-41 ) interest is likely to increase.

Preparing the ground for large imports, European Commission President José Manuel Barroso told a recent biofuels conference that the Commission "will not discriminate between domestic and imported biofuels", sentiments later endorsed by EU Trade and Energy Commissioners Peter Mandelson and Andris Piebalgs.

But sugarcane production is a thirsty process. With about 1,000 tonnes of water needed to grow 12.5 tonnes of commercial cane, freshwater consumption is a concern for environmental and social welfare campaigners.

Concerns about habitat destruction have increased following confirmation that the European Investment Bank will loan €37 million to EU companies to establish agro-fuel projects in Brazil.

The European Parliament’s Agriculture Committee has urged the bank to drop the loans because of "clear evidence" that the "rapid expansion of plant fuels produced from soybeans, sugarcane and other energy crops… has made large-scale farming practices even more unsustainable."

Work on the sugarcane initiative began in June 2005 at a London meeting of 34 producers, bankers, refiners, researchers, brokers and major sugar users, along with the IFC, WWF and other NGOs. The was formally launched in January 2006.

Like similar initiatives for palm oil and soya (ENDS Reports 376, p 22  and 380, p 22 ), it is trying to develop globally relevant criteria that define sustainable production.

At its launch, the organisation said it would develop a set of standards that companies and investors could use when sourcing and screening investments and which producers could adopt to improve sustainability.

But lack of support from companies has delayed progress, causing the organisation to rethink its approach. This is despite growing interest in the "water footprint" of products and services as firms and investors begin to recognise water risks arising from climate change (ENDS Report 387, pp 10-11 ).

It says talk of standards is discouraging producers and has replaced all reference to the term in its literature with the goal of "measured improvement". Some producer organisations claim standards would be discriminatory because many farmers would be unable to afford the needed improvements. There is also a belief that any voluntary standards agreed by the organisation would later be used as the basis for mandatory ones.

"People are allergic to certification of any kind and allergic to an environmental standard that might be a trade barrier," said the organisation’s programme manager David Willers.

Mr Willers denied that the move away from standards had weakened the programme, insisting the focus is on reaching agreement on how better practice is measured and demonstrated and making the scheme as inclusive as possible.

Financial institutions that lend money to sugar producers are also to be invited to join the initiative. Coordinators for technical working groups, looking at environmental, social and mill-based issues, will be put in place in the coming months.

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