Effectiveness of EU biofuels sustainability criteria in the context of land acquisitions in Africa

In recent years, land is becoming an important commodity and the land sector in many developing countries has been object of growing foreign acquisitions. The aim of the paper is to analyze whether the requirements set by the EU Renewable Energy Directive introducing biofuels sustainability criteria has induced the European investors acquiring land for producing biofuel feedstocks to adopt more sustainable strategies. First, we review the factors that may induce a corporation to adopt sustainable behavior and corporate social responsibility (CSR) strategies in the context of land acquisitions. Second, the paper illustrates our original evidence on European land acquisitions in Africa and on the behavior of the investors involved. Then, we use a logistic model to estimate the variables affecting the investor's choice to certify its actions and to adopt CSR strategies. Our evidence shows that the main factors influencing the probability that an investor chooses to certify the sustainability of its actions are: the sector in which it operates, the fact of acquiring land in more than one foreign country and the characteristics of origin and destination country. Interestingly, the European economic operators involved in acquisitions for biofuel crops show significantly lower probability of being certified. Therefore, the EU sustainability criteria seem to be ineffective in guaranteeing and verifying the sustainability of the European land investments in Africa. Joint efforts by European Union, Member States, target Countries and private sector operators are necessary to prevent the negative effects of land acquisitions on local stakeholders and the environment.