How new European Union legislation will impact the global sugarcane sector

19th May 2023

Written by Norma Tregurtha, Director of Engagement & Markets

The changing climate is an emergency that needs global cooperation. In 2015, leaders from across the world met in Paris and made a legally binding agreement to substantially limit global temperature increases to 1.5 degrees. However, the latest IPCC report published in March shows that emissions are still rising. Fortunately, policymakers have been paying attention to the mounting pressures and have been busy designing and proposing legislations and initiatives to drive change. We’ve reached a point where new laws are starting to come into effect, particularly in the European Union (EU), which will impact on almost all businesses in the sugarcane sector.

Photo credit: Markus Spiske, Unplash

At Bonsucro, we have been closely following what these policy developments mean for us and our members with help from ISEAL.  We are a member of ISEAL, a globally recognised framework for credible sustainability systems, and a community of sustainability standards. Now that the policy changes in the EU are well advanced, we want to share what this means for our members.

 

Policy being shaped by the Green Deal

To provide some context, the EU has an ambitious target to become carbon neutral by 2050. The Green Deal, a set of policy initiatives that were approved in 2020, is at the heart of this target. The Deal has created many opportunities to advance the sustainability agenda and influenced other proposed changes within the EU. It is multi-faceted in that it touches upon human rights due diligence, green claims, and the green energy directive. The Green Deal has helped many policy initiatives to move forwards, which have created a lot of implications for sustainability standards, like Bonsucro.

 

The Green Claims Directive 

“In total, there are currently around 350 eco-labels globally” – a fact that is “fragmenting the market and confusing consumers.” – Food Navigator

We are seeing that consumers are keen to choose environmentally friendly, or ‘greener’, products when shopping. Companies are responding by talking about the provenance of their products in their marketing. But how much of it rings true? And how much of it is just greenwashing (the act of making a product appear more environmentally friendly that it actually is)? The proliferation of ‘eco’ labels on products is a reason to be concerned. Many companies are creating their own sustainability initiatives that have little to no public evidence to back them up. The EU reports that half of all green labels offer weak or non-existent verification. It’s like marking your own homework – and consumer trust is low.

The European Commission is concerned about the number of unsubstantiated claims on products –because of greenwashing and because the labels are confusing for consumers. The Green Claims Directive has proposed criteria to stop companies making misleading claims about the environmental credentials of their products. It aims to make claims more reliable and protect consumers while empowering them to make decisions. The law will offer clear criteria on how companies can prove their claims, and requirements for them to be checked by an independent verifier.

While the Bonsucro label isn’t widely used at the moment, its application is growing. We’re seeing brands use the logo on a bigger variety of products – it’s not featured just on bags of sugar, but also on chocolate bars, bottles of rum, and packaging made from sugarcane-derived bioplastics. In the past year, we have approved our certified sustainable sugarcane logo to be used in more than 35 countries.

With the Greens Claim Directive, there are implications for members using the Bonsucro seal (and for members planning to use it in the future). We are already in a good position to comply with the Directive. This is because we have a system companies can trust. Our Standard is largely metric, and it is verified by third party auditors. We can prove impact – and we can work with our members to help them understand what they can say about on their products.

EU deforestation regulation

“Around 10% of the world’s forests, an area larger than the European Union, have been lost worldwide through deforestation over the past 30 years” – EU Commission

The European Union has agreed to a law to ban the import of products that are linked to deforestation. The law looks at commodities in many household products such as coffee, cocoa, and soy that are imported into the EU. Currently, sugarcane is not recognised as a high priority crop within the new law. This is because the focus has been on forested areas.

The list of commodities and ecosystems included under the regulation will be reviewed over the coming year and amendments are foreseen. We know that the European Economic and Social Committee and European farmers have been arguing for tropical savannahs (e.g. the Cerrado region where sugarcane is grown in Brazil) to be included in this review, and thus the regulation. We are working with partners in Brussels to monitor and understand developments so that we can support our members to demonstrate that they comply with this important regulation.

Corporate sustainability due diligence

“A third of companies recognise the need to act and take measures to address adverse effects of their actions on human rights or the environment, but progress is slow and uneven. The increasing complexity and global nature of supply chains makes it challenging for companies to get reliable information on suppliers’ operations.”
EU Commission

In 2022, the Commission adopted a proposal for a Directive on corporate sustainability due diligence that aims to encourage businesses to take responsibility for their human rights and environmental impact. The rules apply to large EU limited liability companies and third countries outside the EU that are active in the EU. While this only applies to a small proportion of our producer members, the Directive will impact businesses along sugarcane the supply chain. It will be a domino effect, so all our members do need to prepare.

It’s important to reiterate that each company needs to take responsibility for ensuring their suppliers respect and protect human rights.  Certification can support this process by identifying potential risks and building the capacity of suppliers, but each company is responsible for its supply chain and ensuring that workers’ human rights are protected and environmental impacts are being considered. Due diligence practices will need to be adopted and we will support our members with the transition where possible through information, guidance, and training.

We offer our members training on the United Nations Guiding Principles. Last year we ran three webinars, and this year we have another three coming up that look at implementing human rights policies and grievance mechanisms. These are in collaboration with human rights experts and are being hosted in English, Spanish, and Portuguese. We also have a selection of tools, resources, and reports available in English, Spanish, Portuguese, and French.

 

EU-Mercosur trade agreement

“We need a u-turn for EU trade policy: leaving climate destruction, human and animal rights violations behind and moving toward a sustainable and social relationship based on solidarity for all.” European Trade Justice Coalition

The EU is the primary trade and investment partner for the Mercosur states of Argentina, Brazil Paraguay and Uruguay. In 2019 the EU and the Mercosur states agreed to form an ambitious and comprehensive trade agreement. It is in fact one of the biggest trade agreements in the world, concerning a population of 780 million people. It also covers 40 billion euros of imports and exports.

All Mercosur state counties are sugarcane producers, and we have Bonsucro members in all of them. So, will this agreement have implications for sustainable sugarcane? In short, the answer is yes. All the other EU sustainability policies are going to apply to this trade deal – imports will have to prove they are deforestation-free, sustainability claims on products are going to need proof, and large companies are going to have to double down and improve their due diligence processes.

Additionally, the EU is looking to increase its use of ethanol in a shift to make energy cleaner – something sugarcane can play a role in.

 

What next?

These policies are just a sample of what’s happening in the European Union, but they demonstrate a trend across the world. For example, Norway, though not a member of the European Union, has adopted a Mandatory Human Rights Due Diligence Act, and Canada has recently passed comprehensive supply chain due diligence legislation.

The inclusion of sustainability in regulations and policies is increasing. And this is where credible sustainability standards, like Bonsucro, can really demonstrate value. Bonsucro certification is going to mean more as the rules start to tighten up.

We are paying attention to the upcoming changes and we will adapt our systems where needed. We are here to support our members as much as we can. On 22 May, we held a webinar for our members, where we looked at the policies mentioned here in more detail and heard from experts outside of the sugarcane sector.

We will also continue to share updates and position papers through our channels.

As the Director of Engagements and Markets, and someone with more than 20 years’ experience working in policy, I’m always happy to speak to our members about upcoming changes and how Bonsucro can help. If you have any questions or you would like to schedule a call, you can email me at Norma@bonsucro.com.