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IF sugar briefing


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IF sugar briefing

  1. 1. PAGE 1 which are determined by where they are grown. Sugar beet is grown in cooler, temperate climates with the main producers including the EU, the US, Russia, Turkey, Ukraine and China. Sugarcane is grown in warmer, more tropical climates and the biggest producers include Brazil, India, Thailand, Mexico, Australia and China. It is also grown in many of the least developed countries, where it provides valuable trade income and supports rural, often smallholder, farming communities. Sugarcane, which provides the majority of the world’s sugar, is one of the world’s On the face of it the sugar sector has had a rough start to 2016, with the spotlight falling on soft drinks and their contribution to obesity in particular. The Harvard School of Public Health (HSPH), for example, says that sugary drinks are a major contributor to the obesity epidemic, while drinks producers in the UK were shocked when the chancellor of the exchequer, George Osborne, announced plans to impose a tax on sugary drinks in his recent Budget speech. Other campaigners want to go even further and impose a tax on all sugar. The industry’s position is that “sugar per se consumed in the context of a balanced diet, has not been established as a cause of obesity or Type-2 diabetes”, as the industry group the Comité Européen des Fabricants de Sucre says (France, along with Germany, is one of the world’s biggest producers of sugar beet). But this focus on obesity deflects almost all attention from transparency in the supply chain. Away from the health impacts of the traded commodity, there are two agricultural sources of sugar – cane and beet – each having their own sustainability concerns, many of SECTOR SNAPSHOT – SUGAR Sweetest of challenges From water scarcity and modern slavery, the sugar sector faces a plethora of challenges in the next decade. Here we give a snapshot of things you need to be aware of, wherever your business happens to be within the sugar value chain Essential insight • Sugarcane, like all fast growing tropical plants, is a thirsty crop but much of the water in the cane can be recovered and re-used in processing plants. • The sugarcane industry in Brazil, the world’s biggest producer and exporter, has introduced a series of measures to tackle environmental issues as well as to improve working conditions. • The sector is also increasing mechanised harvesting, reducing pre-harvest burning, which is a key contributor to sugar’s carbon footprint, but also creating unemployment. • In Europe, where sugar beet production is prevalent, the use of pesticides and fertiliser is a particular challenge. • The end of EU sugar production quotas in 2017 will have an impact on sugarcane producing communities, particularly those in the least developed countries. • The sugar industry is facing increasing pressure as a result of the increase in obesity around the world, with the UK’s recent tax on sugary drinks unlikely to be the last regulation to be introduced. SUPPLY CHAINS IN FOCUS Bonsucro aims to cover 50% of the sugarcane market by 2020. More than 25% of production is already in membership HALFOF BRAZIL'S SUGARCROP ISUSEDFOR BIOFUEL INNOVATION FORUM
  2. 2. PAGE 2 thirstiest crops and its impacts include reducing biodiversity, habitat loss, pollution, industrial waste, soil erosion and degradation, according to WWF. Labour conditions are also an issue for a sector that in many parts of the world uses manual labour for the harvesting, introducing challenges for occupational health and safety as well as modern slavery and child labour. Land rights claims are an increasing risk, both for relatively new developments as well as well established industry. Brazil is the world’s largest sugar supplier even though more than half its crop is used to make ethanol biofuel. To ensure fair working conditions for employees, in 2009 a National Commitment to Enhance Working Conditions in Sugarcane was introduced in Brazil. Companies that signed this agreement must meet 30 best practices that go beyond legal obligations, including banning the use of middlemen to hire workers, which can create instances of abuse or exploitation. Other key points in the agreement include worker transportation improvements, added transparency in measuring and paying for worker production, support for migrants hired from other regions, enhanced health and safety practices, and strengthening of unions and the collective bargaining processes. This is just the latest of a series of government and industry led programmes in Brazil to address sustainability issues at scale. Techniques Sugarcane growers use a number of techniques to make their crop more sustainable, including no-till production, crop rotation with soybeans or peanuts and green fertilisation using cover crops. Mills are also making efforts to increase the amount of water from the sugarcane that is treated and re-used in the milling process, with the best having already reduced the amount of water used by more than 70% over the last 20 years. Mills also use co-generation, burning the excess cellulose to power the factory and using the excess to provide renewable electricity. Growing sugarcane uses few pesticides and fungicides, and in parts of the world the use of bio-control agents are removing SUPPLY CHAINS IN FOCUS Cane burning = 20% of the crop's emissions the need for pesticide use completely. The Brazilian Sugarcane Industry Association (UNICA) says chemical fertiliser use is typically 50% lower than US corn and 30% less than beet sugar in Europe because the by-products of the processing operations are used as organic fertilisers. However, one area that does require attention is pre-harvest field burning, which has been used for centuries to remove sugarcane straw, drive away snakes and make it easier for workers to harvest by hand. Burning is responsible for a fifth of the crop’s GHG emissions, so there is a strong incentive to stop it. Mechanised harvesting eliminates the need to burn and its use has been steadily increasing – already more than 90% of the harvest in Sao Paulo, the largest cane-producing state in Brazil, is mechanised and by 2017 only mechanised harvesting will be allowed as a result of the state’s green protocol. Mechanisation is also seen by some as a short cut to address the significant social challenges for cane cutters. Whilst eliminating the problem for the supply chain, and creating new decent employment to run mechanised equipment, there is significant knock on social effects from the loss of employment. MORETHAN90% of the harvest in Sao Paulo, the largest cane-producing state in Brazil, is mechanised INNOVATION FORUM
  3. 3. PAGE 3 SUPPLY CHAINS IN FOCUS The industry’s biggest certification scheme is administered by Bonsucro, the global sugarcane platform, which has more than 400 members in 32 countries. Bonsucro aims to ensure that more than 50% of land where cane is grown globally is managed under endorsed improvement schemes by 2020. The body also makes the case that sugarcane consumes water in similar quantities to other fast-growing tropical plants, like cotton and rice, but it converts sunlight to chemical energy incredibly efficiently. If rice used the same conversion process as sugarcane it would be producing grains twice the size with only 80% of the water. This high growth rate is responsible for sugarcane being the largest agricultural commodity in the world; creating a valuable source of rural employment, trade income, biomaterials and renewable energy. Reducing emissions Countries such as Brazil recognise the potential for reducing their own carbon emissions as well as the potential for the global market in biomaterials. Strong central- and state-led sustainability related programmes are supported by industry, with a clear understanding that access to the global green energy market is reliant on its industry’s sustainability credentials. Far from deforesting, the industry is using land previously used for pasture at the same time as replanting forests, says Bonsucro. Sugar beet is responsible for a much smaller share of the market globally than cane, although it is predominant in Europe. This, and the fact that it is grown in more temperate climates, means that its impacts are generally lower, particularly in relation to issues such as water availability. However, the industry does use a lot of pesticide and fertiliser. European beet growers (CIBE), sugar producers (CEFS) and food and agriculture unions have joined forces as the EU Beet Sugar Sustainability Partnership to produce a good practices guide on the sustainable production of beet sugar in the EU. As well as highlighting best practice on issues such as soil, water and climate change, it also seeks to promote sugar beet-based biofuels as an alternative to petroleum products. In the UK, British Sugar recycles and sells 300,000 tonnes of soil arising from beet processing, ensuring it is not sent to landfill, and it also recycles stones for building materials, lime for soil conditioning and beet pulp for animal feed and use in combined heat and power plants. Combustion gases and recovered heat from the company’s Wissington CHP plant also help to produce 140m tomatoes a year. In 2008, the company became the first to calculate, certify and publish the carbon footprint of its sugar. The end of the EU sugar quotas in 2017 is seen as a significant moment for both parts of the industry. While the EU beet sector prepares to ramp up production from a strong, consolidated base, many cane growing countries see this liberalisation as a threat to an already deflated world sugar market prices. As ever, it is the least developed industries, many with smallholder farming practices, that are most at risk. ★ EU beet production will be piling up British Sugar was the first company to calculate, certify and publish the carbon footprint of its sugar Between 2006 and 2008, European sugar refining capacity FELLBY60% THEENDOFTHE EUSUGAR quotas in 2017 is seen as a significant moment INNOVATION FORUM