Regulations. And more regulations.

WEDNESDAY, MARCH 21, 2012: Our second meeting on Wednesday was with Andreas Feige, managing director of the International Sustainability Carbon Certification (ISCC) in the EU. Essentially, this system (or "scheme" as it is called in the EU) is a sustainability certification system. Proof of sustainability is required for biofuels to qualify for fulfillment of quotas or to be entitled for financial incentives.

Andreas Feige of ISCC discusses
the biofuels certification program
in the European Union.

Fiege's company MEO actually created the ISCC system. And then they were hired by the EU to manage and implement the system they created. (In the words of the SNL Church Lady: "How conveeenient!")

The ISCC received full recognition by the EU Commission in July 2011. Within one year, the number of users grew from 400 to 1200. ISCC covers all types of biomass and is used by in 52 countries, with the share of users outside the EU growing.

More than 70 registered companies are in the U.S. Certification basically comes down to three criteria: 1) A minimum savings of 35% in greenhouse gas emissions vs. fossil fuels; 2) No areas with high biodiversity adversely affected; and 3) no areas with high carbon stocks affected (wetlands, forests, etc.)

The big kicker for American corn producers is that indirect land use change (ILUC) imposes a huge penalty on corn-based ethanol, essentially making it virtually ineligible for certification by definition. Oddly, one can use corn residue without an emissions penalty because, in their definition, there is no land use change. Hmmm.

In the EU, everything is moving toward "decarbonization." So there are talks of creating ISCC programs for specific areas such as chemicals, bioplastics, feed, food and biodiversity. (Imagine having a phalanx of government inspectors counting insects and native flowers on your property!)

Fiege noted that an analysis of the effect of the ISCC effort on biofuels was due by the end of 2012, with possible changes made in 2013. But when pressed regarding whether some regulations may go away as a result, he essentially said "no"—and noted that more regulations may actually result from the analysis.

Frankly, this meeting left all of us a bit glazed over as we marveled at the amount of effort and resources devoted to creating regulations and the auditing functions required to implement and police them. Just how much GDP does that create, do you think?