Focus on

Swedish SEKAB is the first company in the world to supply verified sustainable ethanol. This is ethanol from Brazilian sugarcane used in the fuels E85 for cars and ED95 for buses and trucks. SEKAB turned to SGS to help ensure that the production of the ethanol meets the specific requirements. The key outcome has been an increase in consumer trust.

Sweden is far ahead of most EU countries in the use of bioethanol, and SEKAB, one of Europe’s leading distributors of bioethanol, has been one of the driving forces behind this development."

Today the market is booming and there are more than 1,000 E85 pumps throughout the country, expected to increase to more than 2,400 by the end of 2009. The number of fuel-flexible cars (adapted to run on E85) currently exceeds 70,000. Another 600 ethanol-operated buses in service are powered by ED95. Close to 90% of all ethanol in E85 and ED95 is produced in Brazil.

Swedish consumers buy E85 and ED95 mainly because they are environmentally appropriate, and they want to decrease their dependency on fossil fuel. But there has been a lot of debate in Sweden, as in many other countries, about how sustainable ethanol really is. In the Swedish press there were a lot of articles about forced labour in Brazil, and deforestation of the rainforest. The debate grew louder throughout 2007, and even though some of the arguments used were exaggerated, or even false, it’s a fact that ethanol can be produced in a better or worse way – just as electricity can be produced from coal or wind power.

“We think it is entirely justifiable that customers, consumers, the car industry, media and other stakeholders are demanding guarantees that the ethanol we supply is environmentally, climatically, socially and ethically quality-assured and that it generates lower fossil carbon-dioxide emissions than those of petrol and diesel”, says Anders Fredriksson, President of SEKAB BioFuels & Chemicals.

Taking the Lead

But no certification or international standard existed for how ethanol should be produced in a sustainable way.

SEKAB therefore spent 18 months developing a framework – Verified Sustainable Ethanol – with criteria that cover the entire life cycle of ethanol from the sugarcane fields all the way through to its use in cars.

The criteria are in line with legal requirements and demands stated in ongoing processes by governments, EU, NGOs and scientists. The work was done together with a number of progressive Brazilian producers who share SEKAB’s view that this is vital for the future development of the international ethanol market.

“This initiative for verified sustainable sugarcane ethanol is the first of its kind in the world and a major step toward realising an international standard for how ethanol shall be produced in an ecological and socially sustainable way. The criteria will gradually be developed over the coming years – we have taken the first step now – and the criteria will also be synchronised with coming EU regulations when these are in place”, says Anders Fredriksson.

Criteria for Verified Sustainable Ethanol

The initiative consists of seven criteria. For each criterion, procedures on how to measure and follow up are in place. Each producer is audited on-site twice a year to make sure they meet the requirements.

Criteria:

1. The net reduction of greenhouse gas (GHG) emissions shall be at least 85% in fossil carbon dioxide compared with petrol when considering farming, production and transport to Sweden. Each production unit needs to provide information for the calculation of the total saving of carbon dioxide. The calculation is based on the RTFO principles.
   
   
2. At least 30% mechanisation of harvest today and a plan to increase to 100% in 2014. More mechanised harvest means better environment around the farms because they do not have to burn the fields before the harvests. Workers enjoy a better environment, and CO2 is reduced. The disadvantage of too rapid a mechanisation is the risk of massive unemployment.
   
   
3. Zero tolerance for felling of rainforest and deforestation of other forest has to be done in accordance with Brazilian laws.
   
   
4. Zero tolerance for child labour.
   
   
5. Rights and safety measures for all employees:
   
   
   • Zero tolerance to forced labour (”slave labour”)
   • Workers must have the right to form unions and join them
   • All employees must be formally registered
   • Employees must be paid above mini–mum wages
   • Health & safety policies must be in place and followed
     
     
6. Environmental consideration and actions in accordance with the agro-environmental protocol in Brazil:
   
   
   • Protection of forests close to water areas
   • Protection of water resources
   • Implementation plan for soil conservation
   • Plan for reduction of environmental impacts from production
   • Good practices for pesticides handling and disposal
     
     
7. Chain of custody with traceability of ethanol from plant in Brazil to Sweden – from field to tank.

Setting Up the Auditing Programme

In March 2008, SEKAB turned to SGS to help set up and manage the audit programme to verify that the production meets the requirements and the chain of custody. SGS’s experience proved very valuable and made it possible to fine-tune the criteria and how to follow up. In November 2008, SGS completed the final round of audits for 2008. The auditors identified:

• Zero major non-compliances
• 4 minor non-compliances where actions need to be taken within 3 months
• 14 observations. Observations are classified as suggestions for improvements.

The suppliers will be audited again during 2009 to conclude that they have taken corrective actions.

A WIN-WIN Situation for All Parties

What are the immediate benefits of the audit to SEKAB? Firstly, SEKAB can now show its clients, NGOs and other interested parties a totally transparent process. The company can guarantee that they are supplying “good” ethanol. The debate in media about ethanol almost stopped and the remaining debate is now more fact-based.

SEKAB is also demonstrating its proactive stance in the market. No certification scheme is available yet for the production of the biofuel and SEKAB are clearly not waiting for things just to happen.

SEKAB is also very active on the Roundtable of Sustainable Biofuels as well as in the process in the European Union, so, when the requirements really do happen, SEKAB’s supply chain will be prepared.

The suppliers are learning about the requirements for sustainability as well as getting the chance to understand their clients’ demands. The criteria in the checklist provide examples of good practice for all kinds of agriculture business and many of them are prescribed in Brazilian legislation. This puts the suppliers at the front of this movement, able to learn with their client and SGS how to prepare for the future demands of global markets.

SGS is learning from the experience too, as Vanda Nunes, lead auditor on the ground in Brazil explains:

“Although in Brazil we have been involved a lot with this segment (in several areas of SGS in fact, because this sector has existed in Brazil for more then 50 years), in the past we were involved more with quality issues than sustainability.

Getting in touch with some new questions from the sector is giving us a lot of experience. The auditors have been asked to work on several issues regarding the sugarcane in Brazil as advisors for the Roundtable for Sustainable Biofuel, Roundtable for Sustainable Soy, the Local Certification Schemes with INMETRO (the local accreditation body).

As a result, everyone in the market has recognised in SGS Brazil the expertise to drive the sector to meet the demands they will face.”

The audits will be performed twice a year in each mill, with the next round already scheduled for January–March 2009, outside the harvesting season.

“It is important for all parties that we understand how the suppliers work in both seasonal and non-harvesting periods”, adds Nunes.

Outcomes

The verified and traceable ethanol began flowing out of Swedish pumps in August 2008, and for Anders Fredriksson, President of SEKAB, the benefit of the auditing programme is clear:

”The important thing is that now we can truly say to customers and stakeholders that we know, because it was verified by an independent third party, that the ethanol meets certain criteria. We’ve never been able to do that before. That’s the important part. It builds trust.”

More information about the Verified Sustainable Ethanol Initiative Website.