Web application enables assessment of sustainability of biofuel projects relating to food security, land use, labor conditions
The Inter-American Development Bank released an interactive tool known as the Biofuels Sustainability Scorecard on September 9th, as part of a comprehensive effort to ensure that biofuel investments produce social, economic and environmental benefits.
Biofuels have received increasing global attention due to rising oil prices, awareness of global warming and the need for energy security. Worldwide investment in biofuels has soared, but recent studies indicate that some biofuels can compete with food production, harm the environment, exacerbate climate change and consume more energy than they produce.
In order to address these risks, the Sustainable Energy and Climate Change Initiative (SECCI) and the Structured and Corporate Finance Department (SCF) of the Inter-American Development Bank (IDB) created the Biofuels Sustainability Scorecard based on the sustainability criteria of the Roundtable on Sustainable Biofuels (RSB). The Scorecard was announced during the 4th Annual Western Hemisphere Energy Security and Cooperation Forum, held at IDB’s headquarters in Washington DC.
“Before deciding to invest in biofuels, governments and companies need to fully understand how a particular feedstock and production process will impact food security and local ecosystems,” said IDB President Luis Alberto Moreno. “This Scorecard will make it easier to get answers to those questions, and it will be a key instrument in the IDB’s efforts to promote only those biofuel projects that are truly sustainable.”
The Scorecard addresses 23 key environmental and social issues such as food security, greenhouse gas emissions, water management, land use change, biodiversity or poverty reduction.
SECCI manager Juan Pablo Bonilla described the Scorecard as “a tool for thinking through the complex issues associated with the life cycle of biofuels ‘from the field to the tank,’ thereby ensuring higher levels of sustainability.”
The Scorecard was designed to be used at multiple stages of a project’s lifecycle. It can be used in project development, screening, initial analysis, and then again throughout due diligence and investment approvals. By using the Scorecard at multiple stages, decision makers can identify areas that need improvement and then measure the impact of changes.
Warren Weissman, Corporate Finance Division chief within the Bank’s SCF department, said the Scorecard was designed specifically for the private sector at the project level, but added that it can be used more broadly by government entities, NGOs, academics and other members of the biofuels community. He added that the Scorecard is intended to foster communication with clients and governments and to complement—not replace—the IDB’s existing environmental and social due diligence.
The Scorecard doesn’t provide a final “score” for a particular project, but rather generates a “color map” so that the user can see a project’s performance across different areas, identify trade-offs, and pinpoint areas for improvement. Five colors, ranging from green to red, are used to designate ratings from excellent to unsatisfactory.
The IDB is inviting comments and suggestions regarding the Scorecard, which is available at www.iadb.org/secci, during a six month public consultation period that will end in March 2009
