Declare OSR as sustainable or face discount

Arable farmers will need to sign a sustainability declaration for oilseed rape sold from harvest 2011 or suffer a price penalty, traders have warned.

The declaration is to confirm the rapeseed is grown to the standard required under the Renewable Energy Directive (RED) for biofuel. Almost all crops grown in the EU should meet the criteria, and in the UK the Red Tractor standard and grain passports should prove compliance. But these are not yet recognised by the German authorities, responsible for most of the EU’s biodiesel production.

“The Germans are being bloody awkward,” said NFU combinable crops chairman Ian Backhouse. “They’ll only accept their own approved schemes. It’s frustrating because the NFU’s vision for the Red Tractor is that it brings all requirements for UK farmers into one scheme.”

Instead farmers will have to sign a declaration sent to them by every merchant they deal with. This confirms that the rapeseed meets International Sustainability and Carbon Certification (ISCC) standards, specifically that:

• The crop was grown on areas classed as farmland on 1 January 2008
• Official restrictions on protected areas are complied with
• Cross Compliance requirements are adhered to
• Sufficient field records are kept
• The crop meets the standard greenhouse gas balance.

NFU chief arable adviser Guy Gagen said: “The inclusion of greenhouse gas balance is totally unnecessary, and we are not happy that this is open-ended and exposes farmers to another auditing body. But the German biodiesel market is an important export market so we have to play by their rules.”

The RED allows for Commission-approved schemes to be accepted. The NFU has been putting the Red Tractor through the painstaking process of ensuring this. “We expect it be approved sometime during 2011 crop marketing year. The Germans will then have to recognise it, and it may open up other markets across the EU.”

Although only a small part of the UK crop actually goes into biodiesel, UK buyers don’t want to restrict their market. ADM and Cargill have already stated buying terms for mills from harvest 2011 that include compliance to RED requirements.

“It could result in a two-tier market – sustainable and non-sustainable,” said Openfield’s head of oilseed rape trading John Thorpe.

Gleadell Agriculture’s Jonathan Lane noted that uncertainty over whether the futures market is based on rapeseed declared as sustainable was making it difficult for merchants to trade. “It’s likely rapeseed that isn’t declared as sustainable will trade at a massive discount,” he added.

“This has caused a huge amount of extra work for no return to gather information that’s already gathered for a directive that really isn’t applicable to crops grown in the EU27.”

The RED ensures the EU’s biofuel requirement does not put the world’s areas of high biodiversity, such as rainforest or peat bogs, under threat.

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