Shell has just signed what could be the world’s largest biofuel deal ever – a $12 billion MoU with controversial Brazilian sugar came company Cosan. According to rainforest campaigners Rettet den Regenwald, the deal threatens to lead to deforestation in the Amazon, increased climate chaos and support Cosan in its continued use of slave labour.
According to Rettet den Regenwald,
“Shell’s role includes contributing about $1.625 billion and 2,740 filling stations. Initially the joint venture will produce about 2 billion litres a year but the companies plan to increase this to a whopping 5 billion litres a year which would make the venture one of the world’s top three ethanol producers.
The Brazilian government and Brazilian ethanol companies have invested large amounts of money and time in persuading the world of sugar cane’s green credentials, glossing over some devastating impacts of Brazil’s sugar cane industry.
Brazilian sugar cane plantations are responsible for the destruction of large areas of cerrado and forest, including the Amazon. The industry will tell you no tropical deforestation occurs as a result of sugar cane plantations. Yet in September 2009 the Brazilian Government felt the need to propose new legislation that would prevent sugar cane expanding directly into the Amazon in the future. The government states, however, that “sugarcane plantations currently in progress, and also the scheduled expansions, even in the Amazonia… should not be prohibited.”
Neither can the proposed legislation stop the phenomenon of indirect land use change where existing agricultural land is given over to sugar cane plantations, and farmers travel to find and create new land for their agriculture. It is very difficult to determine these indirect impacts of biofuel crops such as sugar cane and this is a hotly debated policy area in EU legislation. Current policy ignores these direct impacts, yet they can make the difference between biofuels being better for the climate than fossil fuels and being worse for the climate. Bioethanol from sugar cane is given a high CO2 saving rating in EU law but if indirect deforestation is taken into account it can actually have higher CO2 emissions than petrol.
Another crucial issue for the sugar cane industry is the use of slave labour and appalling working conditions. Shell’s new bedfellow Cosan is currently embroiled in a battle with the Brazilian government over whether or not it should be included on their “black list” of sugar cane companies that use slave labour. Walmart temporarily suspended its supply contract with Cosan in January 2010 because the company was included on the list on 31 December 2009 after an inspection found workers being mistreated (see Bloomberg: Cosan Falls on Slavery Charges . Cosan has since won an injunction and has been removed from the list, but the Brazilian attorney general plans to fight this injunction.
No stranger to the need to seem “green”, Shell has developed some sustainability criteria for its biofuels investments. These include:
“Shell will work with its suppliers to incorporate sustainability clauses into supply contracts that seek to ensure that bio-components and feedstocks are not knowingly linked to violation of human rights (child or forced labour) and have not knowingly been cultivated, produced or manufactured in areas of high biodiversity value”.
Sounds good? However, later down in the principles we find the get-out-clause which it has obviously applied to Cosan:
“Shell recognises that many existing suppliers may not meet our expectations in full immediately. If these suppliers wish to supply to Shell, they must commit to work with us to develop a more sustainable supply chain.”