On the future relevance of biofuels for transport in EU-15 countries

The discussion on the promotion of biofuels in the EU-countries is ambiguous: benefits like reduction of greenhouse gas emissions and increase of energy supply security are confronted with high costs and bad ecological performance. On the one hand the EU has set the goal of reaching 10% biofuels by 2020. On the other hand there are continuous persisting discussions to undermine this goal. The core objective of this paper is to investigate the market prospects of biofuels for transport in the EU-15 in a dynamic framework till 2030. While the economic prospects for the 1st generation of biofuels are rather promising – cost-effectiveness under current tax policies exists already – their potentials are very restricted especially due to limited crops areas. Moreover, the environmental performance of 1st generation biofuels is currently rather modest. 2nd generation biofuels will –in a favourable case – enter the market between 2020 and 2030. However, their full potentials will be achieved only after 2030.