European Biofuel Policy: How Far Will Public Support Go?

The strong biofuel expansion experienced in the European Union (EU) originates in the incentives set up by Member States (MSs) within a global framework provided by the EU. A significant part of the EU rapeseed production (more than half) is now channeled into the energy market. MSs support the development of biofuels through subsidies/tax exemptions, mandatory blending, and import barriers (at least for ethanol). Several motivations for supporting biofuels have been put forward. For some MSs, the motivation was clearly to increase agricultural income (e.g., in France and Germany). In other cases, biofuels (produced domestically or imported) were mainly seen as a means to abate GHG emissions. Public support for biofuels has recently been questioned. Some potentially negative effects of biofuels (most notably the indirect land use change) have fueled the debates in the EU Parliament and Commission over the adoption of the 2008 Renewable Energy Directive. These discussions have led to the adoption of less stringent mandatory incorporation targets for 2020 (with respect to the initial 2007 proposal), as the objectives are now set in terms of “renewable fuels” (i.e., biofuels, hydrogen, and green electricity). In spite of an agreement on targets for 2020, some important questions still need to be addressed. The indirect land use change triggered off by biofuel production is the most critical. The ability of the Commission to come up with a clear methodology to address this issue is a necessary condition for the enforcement of the biofuel targets.