Putting transnational “hybrid” governance to work: An examination of EU-RED's implementation in the Argentinean biodiesel sector

Abstract

The European Renewable Energy Directive (EU-RED) constitutes a ‘hybrid’ system of governance: the European Commission, a formal political authority, has set a number of sustainability criteria for the production of biofuels; however, private voluntary certification schemes are the most widely used method through which compliance is verified. In this way, EU-RED acquires the capacity to be implemented and controlled beyond European borders. This paper's goal is to assess the potentials and limitations of this hybrid initiative of governance to enhance sustainability transnationally. To do so, we analyze the implementation of EU-RED in the case of biodiesel produced in Argentina and consumed in the European Union. In this way, we go beyond the literature's focus on EU-RED's institutional framework and analyses of its potential impacts, examining instead its actual implementation on the ground. We assess its effects both in terms of governance – by determining how EU-RED affects the relations of coordination among actors in the chosen global value chain – and upgrading – by determining EU-RED's capacity to advance the social, environmental and economic conditions of biodiesel production in Argentina. The analysis shows that EU-RED's implementation reproduces power asymmetries between European traders and Argentinean biodiesel producers, while it softens inequalities between the latter and their soy suppliers. In terms of sustainability, we identified irrelevant social and limited environmental impacts, while the most relevant form of upgrading is associated with economic factors.