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Do you own or drive a car, or travel by taxi or bus? Do you know where their fuel comes from? All road vehicles circulating in the European Union are currently powered to some extent by biofuels – fuels of non-fossil origin – as a result of a European Directive in 2003 that aimed at tackling climate change. Biofuels may be produced from various waste and residues, making them a sustainable alternative to fossil fuels, and yet they are often produced from crops grown in soil that is ecologically valuable or using techniques that actually increase greenhouse gas emissions.

According to Inês Peixoto, who will defend her dissertation at the School of Business on 4 October, these seemingly unintended consequences of EU regulation caused a strong public backlash against biofuels, turning them into one of the most contentious forms of energy still today. The regulatory change, however, motivated an increasingly large biofuels market. Finland may become one of the largest users and producers of biofuels by 2030.

Peixoto’s thesis departs from the observation that societal efforts to become more sustainable may actually lead to unsustainable outcomes. It examines how different organizations tackled and coped with the contentiousness of this market in the period 2003-2015.

‘The main findings show that organizing markets for sustainability implies acting in an arena in which various notions of what is a good or acceptable biofuel are negotiated. In an effort to tackle the unintended consequences of market reforms, organizations intensify their organizing power by adding or modifying market rules that shape what is acceptable or preferable.’

‘The resulting process suggests an almost relentless hope in organizations’ capacity to make markets work the right way. It also creates increasingly complex and changing environments that are difficult for the long-term innovation efforts of companies. The thesis shows that capabilities to evolve are crucial in these challenging environments.’

Markets have become so pervasive in our society that we rely on them to tackle pressing issues that challenge our future livelihood. These issues include climate change, mass deforestation, or threats to biodiversity. Although organizations may try to reform markets to align their sustainability beliefs with the actual practices, markets and environmental protection are not easily reconciled. The EU biofuels market is a case in point. On a general level, findings from this research may be useful when examining other controversial technologies, products, and policies.

More information:
Inês Peixoto
ines.peixoto@aalto.fi
+358 458 005 145

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Inês Peixoto is defending her thesis titled “Organizing for Sustainability in Transnational Market Reforms: Studies of the EU Biofuels Market” on October 4^th at 12:00 at the School of Business (Hall V001), having Frank den Hond (Hanken School of Economics, VU Amsterdam) as the opponent and Liisa Välikangas as the chairperson/custos.

Link to the dissertation: