Communication from the Commission - Biomass action plan {SEC(2005) 1573}
Date: 2005-12-07
Institutions: European Commission
Subjects: action programme, bioenergy, biomass, energy production, environmental protection

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 7.12.2005 
COM(2005) 628 final 

COMMUNICATION FROM THE COMMISSION 

Biomass action plan 

{SEC(2005) 1573} 

EN 

   EN 

 
 
 
  
TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

4.6. 

5. 

5.1. 

5.2. 

5.3. 

6. 

7. 

INTRODUCTION........................................................................................................ 4 

Biomass potential ......................................................................................................... 5 

Costs and benefits ........................................................................................................ 5 

Biomass use in transport, electricity and heating......................................................... 6 

BIOMASS HEATING ................................................................................................. 7 

Legislation on renewable energy in heating................................................................. 7 

The renewal of district heating..................................................................................... 8 

ELECTRICITY FROM BIOMASS............................................................................. 8 

TRANSPORT BIOFUELS .......................................................................................... 9 

Implementation of the biofuels directive ..................................................................... 9 

The vehicle market....................................................................................................... 9 

Balancing domestic production and imports.............................................................. 10 

Standards .................................................................................................................... 11 

Removal of technical barriers .................................................................................... 11 

Use of ethanol to reduce demand for diesel ............................................................... 11 

CROSS-CUTTING ISSUES...................................................................................... 12 

Supply of biomass ...................................................................................................... 12 

EU financial support for biomass energy................................................................... 14 

State aids .................................................................................................................... 15 

RESEARCH............................................................................................................... 15 

CONCLUSION .......................................................................................................... 16 

ANNEX 1 – Biomass action plan: summary of measures ....................................................... 17 

ANNEX 2 – EU biomass production potential ........................................................................ 20 

ANNEX 3 – A scenario to increase biomass energy using current technologies .................... 22 

ANNEX 4 – Environmental impacts........................................................................................ 23 

ANNEX 5 – Renewable energy and the directive on the energy performance of buildings ... 25 

EN 

2 

   EN 

 
ANNEX 6 – Biomass for electricity generation....................................................................... 26 

ANNEX 7 – Transport biofuels: background .......................................................................... 27 

ANNEX 8 – Biofuels: progress at national level ..................................................................... 28 

ANNEX 9 – Implementing the biofuels directive: fuel tax exemptions and biofuel obligations
.................................................................................................................................................. 29 

ANNEX 10 – Trade in bioethanol............................................................................................ 32 

ANNEX 11 – Achieving the 5.75% biofuels target: the balance between domestic production 
and imports............................................................................................................................... 37 

ANNEX 12 – The Commission’s perspective on biomass and biofuel research..................... 42 

ANNEX 13 – Results of consultation ...................................................................................... 46 

EN 

3 

   EN 

 
COMMUNICATION FROM THE COMMISSION 

Biomass action plan 

(Text with EEA relevance) 

1. 

INTRODUCTION 

Energy  is  key  in  helping  Europe  achieve  its  objectives  for  growth,  jobs  and  sustainability. 
High oil prices put the spotlight on Europe’s increasing dependency on imported energy.  

The  Union  needs  to  respond  strongly  to  this  challenge.  The  central  importance  of  energy 
policy  in  helping  Europe  to  meet  the  challenges  of  globalisation  was  confirmed  by  the 
Union’s  heads  of  state  and  government  at  the  informal  Hampton  Court  summit  in  October 
2005. 

With this in mind, the Commission is carrying out a fundamental review of its energy policy. 
This  will  be  the  subject  of  a  Green  Paper  in  spring  2006,  with  three  main  objectives  – 
competitiveness, sustainability and security of supply.  

Essential  elements  of  this  policy  are,  within  the  context  of  stronger  economic  growth,  the 
need  to  reduce  energy  demand1;  increase  reliance  on  renewable  energy  sources,  given  the 
potential to produce them domestically and their sustainability; diversify energy sources; and 
enhance international cooperation. These elements can help Europe to reduce dependence on 
energy imports, increase sustainability and stimulate growth and jobs. 

Success  requires  a  coherent  management  of  these  objectives,  within  appropriate  timetables. 
The  process  will  include  mechanisms  to  involve  Member  States,  representatives  of  the 
European Parliament and stakeholders2. 

It is in this wider context of an integrated and coherent energy policy and, in particular, of the 
promotion of renewable energy sources that the Commission is presenting this action plan. It 
is just one component of the measures needed to achieve the objectives set out above – but an 
important one, since biomass presently accounts for about half of the renewable energy used 
in the EU3.  

In  its  2004  communication  on  the  share  of  renewable  energy  in  the  European  Union,  the 
European  Commission  committed  itself  to  produce  a  biomass  action  plan,  highlighting  the 
need for a coordinated approach to biomass policy4. The Spring Council of 2004 concluded 

1 
2 

3 

4 

Addressed in the recent energy efficiency Green Paper “Doing more with less” - COM(2005) 265. 
These mechanisms will include the Energy and Transport forum, the “Amsterdam” sustainable energy 
forum, the “Berlin” fossil fuel forum, the “Florence” regulatory forum for electricity and the “Madrid” 
regulatory forum for gas. In addition, the Commission recently decided to set up a high level group for 
competitiveness, energy and the environment. 
44% according to the “substitution approach”, 65% according to the “classical approach” – see impact 
assessment, section 2. 
“The share of renewable energy in the EU” - COM(2004) 366, section 4.3.1. 

EN 

4 

   EN 

 
 
                                                 
that  increased  use  of  renewable  energy  is  essential  for  “environmental  and  competitiveness 
reasons”5, while the European Parliament recently noted “that biomass has many advantages 
over  conventional  energy  sources,  as  well  as  over  some  other  renewable  energies,  in 
particular, relatively low costs, less dependence on short-term weather changes, promotion of 
regional economic structures and provision of alternative sources of income for farmers”6. 

This action plan sets out measures to increase the development of biomass energy from wood, 
wastes  and  agricultural  crops  by  creating  market-based  incentives  to  its  use  and  removing 
barriers to the development of the market. In this way Europe can cut its dependence on fossil 
fuels,  cut  greenhouse  gas  emissions  and  stimulate  economic  activity  in  rural  areas.  The 
measures are listed in Annex 1. 

This  action  plan  is  a  first,  coordinating  step.  It  sets  out  measures  to  promote  biomass  in 
heating,  electricity  and  transport,  followed  by  cross-cutting  measures  affecting  biomass 
supply,  financing  and  research.  It  is  accompanied  by  a  general  impact  assessment.  As  a 
second  step,  individual  measures  will  be  brought  forward  subject  to  specific  impact 
assessment in line with Commission rules. 

1.1. 

Biomass potential 

The  EU  currently  meets  4%  of  its  energy  needs  from  biomass.  If  it  made  full  use  of  its 
potential, it would more than double biomass use by 2010 (from 69 mtoe7 in 2003 to about 
185  mtoe  in  2010)  –  while  complying  with  good  agricultural  practice,  safeguarding 
sustainable  production  of  biomass  and  without  significantly  affecting  domestic  food 
production8. Bulgaria and Romania’s accession will improve availability9, and imports offer 
more potential still.  

In the Commission’s judgement, the measures in this action plan could lead to an increase in 
biomass use to about 150 mtoe in 2010 or soon after10. This is less than the full potential; it is 
in line with the indicative renewable energy targets11. 

1.2. 

Costs and benefits 

It follows from several scientific and economic studies that this increase in biomass use could 
bring the following benefits in 2010: 

•  diversification of Europe’s energy supply, increasing the share of renewable energy by 5% 

and reducing reliance on imported energy from 48 to 42%12; 

5 
6 
7 
8 

9 

10 
11 

12 

Brussels European Council, 25 and 26 March 2004, Presidency conclusions. 
Resolution on “Renewable energy in the EU”, plenary session of 28 September 2005. 
Million tonnes of oil equivalent 
European  Environmental  Agency,  “How  much  biomass  can  Europe  use  without  harming  the 
environment”, briefing 2/2005; see Annex 2. 
For example, Bulgaria and Romania each have 0.7 hectares of agricultural land per capita, compared to 
0.4 in the EU25. 
See Annex 3 and impact assessment. 
These targets are a 12% overall share for renewable energy, a 21% share in the electricity sector and a 
5.75% share for biofuels in 2010. Through the measures in the action plan, the Commission estimates 
that these shares can be achieved – in the case of the overall share, if not in 2010 then within a year or 
two of that date. 
See impact assessment, section 5. 

EN 

5 

   EN 

 
                                                 
•  a reduction in greenhouse gas emissions of 209 million tonnes CO2eq a year13; 

•  direct employment for up to 250-300 000 people, mostly in rural areas. Different studies 

produce widely different figures14; 

•  potential downward pressure on the oil price as a result of lower demand for oil. 

Assuming fossil fuel prices about 10% lower than today’s, the directly measurable cost can be 
estimated at €9 billion per year - €6 billion for transport biofuels and €3 billion for biomass in 
electricity generation (biomass in heating is often cost-competitive)15. This is equivalent to an 
increase of about 1.5 cents per litre of petrol or diesel and 0.1 cents per kWh of electricity16.  

Benefits can also be expected in extending the EU’s technological leadership in these sectors. 

These benefits can be expected to be obtained without additional pollution or other forms of 
environmental damage17. 

The Commission is assessing the contribution that renewable energy could make to the energy 
mix by 2020. This action plan could underpin an increase in renewable energy’s contribution 
by 2020. 

1.3. 

Biomass use in transport, electricity and heating 

Oil prices have tripled over the last four years. Transport is a key economic sector; nearly all 
the  energy  it  uses  comes  from  oil.  Liquid  biofuels,  as  the  only  direct  substitute  for  oil  in 
transport, have a justifiably high political priority.  

Moreover,  constant  growth  in  the  transport  sector  has  not  yet  permitted  the  stabilisation  of 
greenhouse  gas  emissions,  despite  considerable  efforts  undertaken  by  the  industry,  Biofuels 
are an expensive way of reducing greenhouse gas emissions, but within transport they are one 
of only two measures that have a reasonable chance of doing so on a significant scale in the 
near future (the other being the carmakers’ agreement to reduce CO2 emissions from new cars 
– see section 4.2). 

In early 2006, the Commission will bring forward a communication dealing specifically with 
biofuels. 

While  transport  biofuels  have  the  highest  employment  intensity  and  the  greatest  security  of 
supply benefits, biomass in electricity has the greatest greenhouse gas benefits and biomass in 

13 
14 

15 
16 

17 

See impact assessment, section 5. 
This  figure  assumes  that  70-90%  of  biomass  is  produced  in  the  EU.  In  terms  of  direct  employment, 
biofuels  are  typically  50-100  times  as  employment  intensive  in  the  EU  as  fossil  fuel  alternatives; 
biomass  electricity  10-20  times  as  employment  intensive;  biomass  heating  twice  as  employment 
intensive.  Commentators  are  divided  on  the  indirect  effects.  Some  point  to  multipliers  or  export 
opportunities which could double the size of the direct effect. Others argue that jobs in bio-energy will 
replace other jobs, and the net employment effect will be zero. (See impact assessment, section 5.) 
See impact assessment, section 5. 
Oil costs about $60/barrel or (at today’s exchange rates) €48/barrel. To be competitive, biodiesel needs 
an oil price of about €75/barrel while bioethanol needs a price of about €95/barrel. If the price of fossil 
fuels reflected their external costs, more forms of biomass would be cost-competitive. 
See Annex 4. 

EN 

6 

   EN 

 
                                                 
heating  is  cheapest.  Biomass  should  be  promoted  in  all  three  sectors.  At  least  up  to  2010, 
there will be no major competition for raw material: biofuels rely mainly on agricultural crops 
while electricity and heating rely mainly on wood and wastes.  

2. 

BIOMASS HEATING 

Technology for biomass use in residential and industrial heating is simple and cheap. There 
are strong traditions of biomass use and this is the sector where most biomass is used. New 
techniques  are  available  to  turn  wood  and  clean  residues  into  standardised  pellets  that  are 
environmentally safe and easy to handle.  

Nevertheless, biomass is growing slowest in heating.  

As  well  as  carefully  monitoring  the  implementation  of  Community  legislation  on 
cogeneration18 - an important outlet for biomass - the Commission will tackle this through the 
following measures: 

2.1. 

Legislation on renewable energy in heating 

This is the missing piece of the jigsaw, alongside existing directives covering electricity and 
transport.  The  Commission  will  work  towards  this  legislation  in  2006.  It  needs  to  take  a 
different approach from earlier directives, because the key problems lie in market confidence 
and attitudes rather than costs. Elements to be examined will include: 

•  New specific legislation on renewable energy in heating, based on a critical review of the 

potential contribution of: 

- 

- 

- 

- 

- 

- 

measures to ensure that fuel suppliers make biomass fuels available; 

the  establishment  of  efficiency  criteria  for  biomass  and  the  installations  in 
which it is to be used; 

equipment labelling to enable people to buy clean and efficient devices; 

other technical measures ; 

the appropriateness of setting targets; 

voluntary agreements with industry. 

•  Amendment of the directive on the energy performance of buildings to increase incentives 

for renewable energy19. 

•  A  study  of  how  to  improve  the  performance  of  household  biomass  boilers  and  reduce 
pollution20,  with  a  view  to  setting  requirements  in  the  framework  of  the  eco-design 
directive21. 

18 
19 

Directive 2004/8/EC of 11 February 2004 on the promotion of cogeneration. 
Directive 2002/91/EC on the energy performance of buildings (OJ L 1, 4.1.2003); see Annex 5. 

EN 

7 

   EN 

 
                                                 
2.2. 

The renewal of district heating 

District  heating  (collective  heating)  can  manage  the  use  of  renewable  fuels  more  easily  and 
burn more types of fuel with lower emissions. It is easier to develop biomass use in district 
heating than in individual heating. 

56 million EU citizens are served by district heating, 61% of them in the new Member States. 
The  accession  of  Bulgaria  and  Romania  will  add  more.  District  heating  faces  problems  in 
competing  with  individual  heating.  Many  schemes  need  modern  plant,  infrastructure  and 
management to improve their fuel use and cost-efficiency and make them more convenient to 
use.  Schemes  need  to  be  converted  to  use  biomass  as  fuel.  The  Commission  encourages 
district heating schemes to develop in this way. 

The  Commission  urges  the  Council  to  agree  to  its  proposal  to  add  the  supply  of  district 
heating to the list of goods and services to which Member States may apply a reduced rate of 
VAT22.  It  would  then  recommend  Member  States  to  extend  to  district  heating  any  reduced 
VAT rate already applied to natural gas or electricity. 

The Commission may also bring forward a legislative proposal on tax issues affecting district 
heating. It will examine whether other measures should be proposed at the same time. 

3. 

ELECTRICITY FROM BIOMASS 

Electricity can be generated from all types of biomass using several technologies (see Annex 
6). The Commission encourages Member States to harness the potential of all cost effective 
forms of biomass electricity generation. 

The  directive  on  renewable  energy  in  electricity  generation  provides  the  framework  for 
electricity  from  biomass23.  Member  States  have  committed  themselves  to  targets  for 
electricity from renewable energy. In most cases, it looks impossible to achieve these without 
using more biomass24. Implementation of the directive is therefore the key to the development 
of biomass use in electricity. The Commission will continue to pay close attention to this25. 

In combined heat and power plants, biomass can provide heat and electricity at the same time. 
The Commission encourages Member States to take this double dividend into account in their 
support systems. 

20 

21 

22 
23 

24 

25 

If biomass is burnt without proper controls, it can be a major source of pollution. This can result from 
illegal incineration of waste, or from the use of biomass boilers without adequate combustion control 
and pollution prevention. Modern pellet boilers and district heating plants cause much less pollution. 
Directive  2005/32/EC  establishing  a  framework for the  setting  of  ecodesign  requirements  for  energy-
using products (OJ L 191, 22.7.2005). 
In COM(2003) 397, 23.7.2003. 
Directive 2001/77/EC of 27 September 2001 on the promotion of electricity produced from renewable 
energy sources in the internal electricity market (OJ L 283, 27.10.2001). 
In last year’s communication on the share of renewable energy the Commission pointed out that, among 
the  three  main  renewable  energy  sources  for  electricity  generation,  the share  of hydropower  is nearly 
static, biomass is growing slowly and wind power is growing fast. The targets in the directive will not 
be met unless biomass starts to grow faster. 
See  separate  Communication  on  support  for  electricity  from  renewable  energy  sources  -  COM(2005) 
627.  

EN 

8 

   EN 

 
                                                                                                                                                         
4. 

TRANSPORT BIOFUELS 

4.1. 

Implementation of the biofuels directive 

As  in  electricity  generation,  a  framework  is  set  by  Community  legislation:  the  biofuels 
directive26, which sets as reference values a 2% market share for biofuels in 2005 and 5.75% 
share in 201027. 

The  2005  reference  value  will  not  be  achieved.  There  is  substantial  variation  in  Member 
States’ efforts28; if all Member States achieve the targets they have set, biofuels will attain a 
share of only 1.4%.  

To implement the directive, many Member States are relying on fuel tax exemptions29. These 
are  subject  to  state  aid  control.  In  line  with  the  guidelines  on  environmental  state  aids,  the 
Commission has taken a generally favourable attitude to the notifications received. However, 
a number of practical problems have arisen. A number of Member States have recently turned 
to biofuels obligations, requiring fuel supply companies to incorporate a given percentage of 
biofuels in the fuel they place on the market. More details of the two approaches are given in 
Annex  9.  Biofuels  obligations  seem  a  promising  way  of  overcoming  difficulties  with  tax 
exemptions and ensuring that targets are achieved cost-effectively. They also make it easier to 
give favourable treatment to second-generation biofuels, which the Commission encourages.  

In accordance with the biofuels directive, the Commission will bring forward a report in 2006 
on the directive’s implementation, with a view to a possible revision. It will address the issues 
of: 

•  national targets for the market share of biofuels;  

•  using biofuels obligations;  

•  requiring  that,  through  a  system  of  certificates,  only  biofuels  whose  cultivation  complies 

with minimum sustainability standards will count towards the targets30. 

The system of certificates would need to apply in a non-discriminatory way to domestically 
produced biofuels and imports. 

4.2. 

The vehicle market 

The  Commission  will  soon  bring  forward  a  legislative  proposal  to  encourage  public 
procurement of clean vehicles, which could include those using high biofuel blends31.  

26 

27 
28 
29 

30 

31 

Directive 2003/30/EC of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels 
for transport (OJ L 123, 17.5.2003). 
See Annex 7. 
See Annex 8. 
These  are  facilitated  by  Directive  2003/96/EC  of  27  October  2003  restructuring  the  Community 
framework for the taxation of energy products and electricity (OJ L 283, 31.10.2003). 
The  Commission  will  also  look  into  how  minimum  sustainability  standards  could  also  be  applied  for 
biomass used for other energy purposes. 
Public  procurement  also  has  an  important  role  in  promoting  other  forms  of  biomass,  especially  for 
heating. 

EN 

9 

   EN 

 
                                                 
The Commission is examining the scope for the use of alternative fuels, including biofuels, to 
count  towards  CO2  reduction  targets  for  light  duty  vehicles  as  part  of  its  review  of  how  to 
move  towards  the  Community  objective  of  average  emissions  of  120  g/km.  The  future 
strategy, to be proposed in 2006, will be based on an “integrated approach”. This means that 
measures such as the use of biofuels, fiscal incentives, consumer information and congestion 
avoidance will be considered in addition to car manufacturers’ efforts on vehicle technology. 
This strategy will take into account of the strategy on the future of the automobile industry, 
which will also be proposed in 2006.  

4.3. 

Balancing domestic production and imports 

Biofuels  and  their  raw  materials  are  traded  on  world  markets.  An  autarkic  approach  to 
meeting  the  EU’s  needs  is  neither  possible  nor  desirable.  However,  the  Union  has  some 
discretion  about  how  far  to  encourage  domestic  production  or  imports.  Annex  10  describes 
the current situation as far as trade in bioethanol is concerned. Annex 11 assesses three routes 
to a 5.75% market share for biofuels: 

- 

- 

- 

minimum share for imports 

maximum share for imports 

balanced approach. 

The Commission prefers the balanced approach. Therefore, it will: 

•  propose  the  amendment  of  standard  EN14214  to  facilitate  the  use  of  a  wider  range  of 
vegetable  oils  for  biodiesel,  to  the  extent  feasible  without  significant  ill-effects  on  fuel 
performance; 

•  address the issue of amending the biofuels directive so that only biofuels whose cultivation 

complies with minimum sustainability standards count towards its targets; 

•  maintain market access conditions for imported bioethanol that are no less favourable than 

those provided by the trade agreements currently in force; 

•  pursue  a  balanced  approach  in  ongoing  free  trade  agreement  negotiations  with  ethanol-
producing countries/regions. The EU must respect the interests of domestic producers and 
EU trading partners, within the context of rising demand for biofuels; 

•  support  developing  countries  that  wish  to  produce  biofuels  and  develop  their  domestic 

markets. This is of particular importance in the context of the sugar reforms32. 

The  Commission  will  take  these  objectives  forward  in  bilateral  negotiations  (e.g.  with 
Mercosur) and multilateral negotiations (e.g. the Doha World Trade Organisation round and 
discussion on trade in environmental goods).  

32 

This aspect will be addressed further in the forthcoming communication on biofuels. 

EN 

10 

   EN 

 
                                                 
Standards 

4.4. 
The  fuel  quality  directive33  establishes  limits  on  the  content  of  ethanol,  ether  and  other 
oxygenates in petrol. It limits the vapour pressure of petrol. Standard EN590 states that diesel 
must  contain  no  more  than  5%  biodiesel  by  volume  (4.6%  in  energy  terms).  These  limits 
constrain how increased use of biofuels can be achieved. 

The Commission is reviewing the fuel quality directive. It will assess the impact of options to 
address  the  above  issues.  The  Commission  is  considering  a  variety  of  factors,  taking  into 
account  the  costs  and  benefits  of  the  affected  sectors.  In  reviewing  these  options,  the 
Commission will, inter alia, consider: 

- 

- 

impacts  on  health  and  environment  (including  pollutant  emissions  and  greenhouse 
gas emissions); 

impacts on the achievement of the objectives in the biofuels directive and the cost of 
achieving them. 

4.5. 

Removal of technical barriers 

There are technical barriers to the introduction of biofuels. For example, industry has argued 
that 

- 

- 

petrol blended with ethanol cannot be carried in oil pipelines; 

it is not practical to offer a petrol basestock with a reduced vapour pressure suitable 
for the direct blending of ethanol. 

The  Commission  will  ask  the  industries  concerned  to  explain  the  technical  justification  for 
these  barriers  and  will  also  seek  the  views  of  other  interested  parties.  It  will  monitor  the 
behaviour of the relevant industries to ensure that there is no discrimination against biofuels. 

4.6. 

Use of ethanol to reduce demand for diesel 

The  European  vehicle  fleet  is  biased  towards  diesel  vehicles.  However,  Europe  has  greater 
capacity to produce bioethanol than biodiesel, using less land and with more room to reduce 
costs through economies of scale. There is also scope for increased imports of ethanol from 
third countries. 

The Commission will encourage the use of ethanol to reduce demand for diesel, including the 
use  of  95%  ethanol  in  modified  diesel  engines.  As  part  of  the  re-examination  of  standard 
EN14214,  it  will  propose  evaluation  of  a  change  to  allow  ethanol  to  replace  methanol  in 
biodiesel production. 

33 

Directive  98/70/EC  of  13  October  1998  relating  to  the  quality  of  petrol  and  diesel  fuels  (OJ  L  350, 
28.12.1998), as amended by Directive 2003/17/EC of 3 March 2003 (OJ L 76, 22.3.2003). 

EN 

11 

   EN 

 
                                                 
5. 

CROSS-CUTTING ISSUES 

5.1. 

Supply of biomass 

The measures described above depend on the availability of an adequate supply of biomass. 
This section sets out measures to promote this.  

EN 

12 

   EN 

 
Common agricultural policy (CAP) 

The 2003 reform of the CAP means that income support for farmers is no longer linked to the 
crops  produced.  As  a  result,  farmers  can  respond  freely  to  increasing  demand  for  energy 
crops.  This  reform  also  introduced  a  special  “aid  for  energy  crops”34  and  maintained  the 
possibility of using mandatory “set-aside” land for growing non-food crops (including energy 
crops). In 2006 the Commission will report to the Council on implementation of the aid for 
energy  crops,  accompanied,  if  appropriate,  by  proposals  taking  into  account  the  Union’s 
objectives for biofuels.  

In the past, only a limited range of energy crops could benefit, through the set-aside regime, 
from  support.  The  reform  paved  the  way  for  farmers  to  grow  more  energy  crops,  including 
short rotation coppice and other perennial crops. Decisions about the appropriate energy crops 
to  grow  are  best  taken  at  a  regional  or  local  level.  The  Commission  will  finance  an 
information campaign about the properties of energy crops and the opportunities they offer35. 
Fast-growing wood,  in  particular,  needs a changed approach because farmers have to  tie  up 
land for several years and at least 4 years must pass before the first harvest.  

Forestry  

About 35% of the annual growth of wood in EU forests is not used36. In many countries there 
is  only  a  limited  market  for  small  size  thinnings,  which  can  be  used  to  produce  heat  and 
electricity.  Most  of  the  unused  resources  are  in  small  private  holdings,  making  their 
mobilisation difficult. Some countries have tackled this problem by setting up supply chains 
coupled  to  existing  plants,  and  by  supporting  the  organisation  of  logistics  systems,  forest 
owner cooperation and transport. The Commission will seek to disseminate the lessons learnt 
from this experience and support similar initiatives in other countries.  

The Commission is preparing a forestry action plan, to be adopted in 2006; this will address 
energy uses of wood.  

The  Commission  will  review  the  impact  of  the  energy  use  of  wood  and  wood  residues  on 
forest based industries. 

Waste  

Waste is an underused energy resource. The Commission is developing a thematic strategy on 
the prevention and recycling of waste and preparing a proposal on the revision of the waste 
framework legislation. Options under consideration include: 

•  promotion of waste management techniques that reduce the environmental impact of using 

waste as a fuel; 

•  taking a market approach to recycling and recovery activities; 

34 

35 
36 

The “energy crop payment”, under which a premium of €45 per hectare is available, with a maximum 
guaranteed area of 1.5 million hectares as the budgetary ceiling, for the production of energy crops.  
The campaign will also cover forestry. 
Not counting forests in protected areas such as Natura 2000 areas. 

EN 

13 

   EN 

 
                                                 
•  developing  technical  standards  to  enable  recovered  materials  to  be  considered  as  goods 

(making it easier to use them for energy purposes); 

•  encouraging investment in energy-efficient techniques for the use of waste as fuel. 

Animal by-products 

Animal by-products not intended for human consumption are increasingly being recovered for 
energy,  especially  in  biogas  and  biodiesel.  Technological  and  scientific  progress  constantly 
lead  to  the  development  of  new  production  processes.  The  Commission  will  review  the 
regulatory framework for the authorisation of such processes, so that new sources of energy 
may be opened up, while a high level of protection for public and animal health is maintained. 

Standards 

European standards for solid biomass fuels are needed to facilitate trade, develop markets and 
increase  consumer  confidence.  The  European  Committee  for  Standardisation  (CEN)  is 
working on them. The Commission will encourage it to give high priority to this work. 

Improving the supply chain  

A  European  trading  floor  for  pellets  and  chips  has  been  initiated  with  support  from  the  EU 
Intelligent  Energy  for  Europe  programme.  Volumes  are  low.  The  Commission  will  look  at 
how  the  results  can  be  improved,  with  a  view  towards  an  EU-wide  trading  system  (if 
technically and economically feasible). 

National biomass action plans 

National biomass action plans can reduce investor uncertainty by assessing the physical and 
economic  availability  of  biomass  of  different  kinds,  including  wood  and  wood  residues  as 
well as wastes and agricultural crops, identifying priorities for the types of biomass to be used 
and how biomass resources can be developed, and indicating the measures that will be taken 
at national level to promote this. They can also be linked to consumer information campaigns 
on  the  benefits  of  biomass.  Regions  can  usefully  do  the  same  thing.  The  Commission 
encourages the development of national biomass action plans. 

5.2. 

EU financial support for biomass energy 

Many  of  the  regions  assisted  by  the  structural  and  cohesion  funds  have  high  potential  to 
pursue  economic  growth  and  employment  creation  or  stabilisation  through  biomass.  This  is 
particularly  true  for  rural  regions  in  central  and  eastern  Europe.  Low  labour  costs  and  high 
resource  availability  can  give  these  regions  a  comparative  advantage  in  the  production  of 
biomass. Supporting the development of renewable and alternative energy sources such as the 
production  of  biomass  is  therefore  an  important  objective  for  the  structural  and  cohesion 
funds,  as  set  out  in  the  Commission’s  proposal  for  Community  strategic  guidelines  for 
cohesion37. These funds can support the retraining of farmers; the provision of equipment for 
biomass producers; investment in facilities to produce biofuels and other materials; and fuel 
switching to biomass by electricity and district heat producers. 

37 

COM(2005) 299, 5.7.2005. 

EN 

14 

   EN 

 
 
                                                 
The  Commission  calls  upon  Member  States  and  regions,  when  preparing  their  National 
Strategic  Reference  Frameworks  and  operational  programmes,  to  ensure  that  the  potential 
benefits of biomass have been thoroughly taken into account. 

Investment on or near farms, for example in biomass processing, can be supported through the 
rural  development  policy,  as  can  the  mobilisation  of  unused  biomass  by  forest  holders.  The 
Commission  has  proposed  Community  strategic  guidelines  for  rural  development  which 
emphasise  renewable  energy  in  general  and  biomass  supply  chains  in  particular38.  The 
Commission  encourages  Member  States  to  take  up  these  opportunities  for  the  development 
and  diversification  of  the  rural  economy  through  their  national  rural  development 
programmes.  The  Commission  proposes  a  specific  ad  hoc  group  to  consider  biomass 
opportunities within these programmes. 

5.3. 

State aids 

Official  support  for  biomass  production  and  use  must  comply  with  Community  state  aid 
policy.  The  Commission  can  authorise  investment  aid  and  operating  aid  on  the  basis  of  the 
Community  guidelines  on  State  aid  for  environmental  protection39.  The  rules  in  these 
guidelines  take  into  account  the  beneficial  effects  that  energy  produced  from  biomass  may 
have  compared  to  energy  production  on  the  basis  of  fossil  fuels.  Aid  for  investments  in 
assisted  areas  may  be  found  compatible  with  the  common  market  under  the  guidelines  for 
national regional aid40. There should not be undue distortions of competition. See also Annex 
9. 

6. 

RESEARCH 

The Commission’s proposal for the Seventh Framework Programme gives a high priority to 
biomass research. It includes several actions with a biomass component: 

•  “Biomass for fuels, electricity, heating and cooling”, with the objective of developing and 

demonstrating a portfolio of technologies; 

•  “Smart energy networks”, including the integration of biomass installations into electricity 

grids and feeding biogas and synthetic gas into the natural gas grid; 

•  “Life  sciences  and  biotechnology  for  sustainable  non-food  products  and  processes”, 
including  the  use  of  biotechnology  to  improve  the  productivity,  sustainability  and 
composition of biomass raw materials and develop new bio-processes. 

Some of the most important areas of work will be: 

•  the development of an industry-led “biofuel technology platform”; 

•  the “bio-refinery” concept, getting the most out of all parts of plants; 

38 
39 
40 

COM(2005) 304.  
OJ C 37, 3.2.2001, p. 3. 
OJ C 74, 10.3.1998, p. 9. 

EN 

15 

   EN 

 
                                                 
•  research  into  second-generation  biofuels,  where  a  substantial  increase  in  Community 

funding is expected. 

The  Commission  will  consider  how  best  to  take  forward  research  into  the  optimisation  of 
agricultural and woody crops for energy purposes, and into conversion processes. 

Through  the  Intelligent  Energy  for  Europe  programme,  the  Commission  will  support  the 
dissemination of techniques that have been proven through research. 

More details are given in Annex 12. 

7. 

CONCLUSION 

Europe needs to break its dependence on fossil fuels. Biomass is one of the main alternatives. 
Cost effective measures in favour of biomass need to be developed at European level to: 

•  draw maximum advantage from national and local innovation;  

•  provide a clear way forward for major industries organised on a European scale;  

•  share burdens fairly.  

This  communication  sets  out  a  coordinated  programme  for  Community  action,  including 
measures to improve demand for biomass; improve supply; overcome technical barriers; and 
develop research.  

The action plan has taken nearly a year to develop. It draws on widespread consultations with 
interested parties41. Their response to the idea of a vigorous Community approach in this area 
has been largely, and often powerfully, positive. The next step is to put the programme into 
practice.  Next  spring’s  Green  Paper  on  a  coherent  European  energy  policy  will  address 
progress and further developments. 

41 

See Annex 13. 

EN 

16 

   EN 

 
                                                 
ANNEX 1 – Biomass action plan: summary of measures 

Biomass for heating and electricity 

The Commission will: 

•  work  towards  a  proposal  for  Community  legislation  in  2006  to  encourage  the  use  of 

renewable energy, including biomass, for heating and cooling; 

•  examine  how  the  directive  on  energy  performance  of  buildings  could  be  amended  to 

increase incentives for the use of renewable energy; 

•  study how to improve the performance of household biomass boilers and reduce pollution, 

with a view to setting requirements in the framework of the eco-design directive; 

•  encourage district heating scheme owners to modernise them and convert them to biomass 

fuel; 

•  encourage  Member  States  that  apply  a  reduced  VAT  rate  to  gas  and  electricity  to  apply 

such a rate to district heating too; 

•  pay  close  attention  to  the  implementation  of  the  directive  on  electricity  from  renewable 

energy sources; 

•  encourage  Member  States  to  harness  the  potential  of  all  cost-effective  forms  of  biomass 

electricity generation; 

•  encourage  Member  States  to  take  into  account,  in  their  support  systems,  the  fact  that,  in 
combined heat and power plants, biomass can provide heat and electricity at the same time. 

Transport biofuels 

The Commission will: 

•  Bring forward a report in 2006 in view of a possible revision of the biofuels directive. This 

report will address the issues of:  

–  setting national targets for the share of biofuels; 

–  using biofuels obligations on fuel suppliers; 

–  ensuring, through certification schemes, that the biofuels used to meet the targets 

satisfy minimum sustainability requirements. 

•  Encourage  Member  States  to  give  favourable  treatment  to  second-generation  biofuels  in 

biofuels obligations. 

•  Bring forward a legislative proposal promoting public procurement of clean and efficient 

vehicles, including those using high blends of biofuels. 

EN 

17 

   EN 

 
•  Examine  how  biofuel  use  can  count  towards  the  CO2  emission  reduction  targets  for  car 

fleets. 

•  Pursue  a  balanced  approach  in  ongoing  free  trade  agreement  negotiations  with  ethanol-
producing countries/regions. The EU must respect the interests of domestic producers and 
EU trading partners, within the context of rising demand for biofuels. 

•  Propose  amendments  to  the  “biodiesel  standard”  to  facilitate  the  use  of  a  wider  range  of 
oils, including imported oils, to produce biodiesel, and allow ethanol to replace methanol 
in biodiesel production. 

•  Assess the impact of options to address the issues of limits on the content of ethanol, ether 
and  other  oxygenates  in  petrol;  limits  on  the  vapour  content  of  petrol;  and  limits  on  the 
biodiesel content of diesel. 

•  Ask  the  relevant  industries  to  explain  the  technical  justification  for  practices  that  act  as 
barriers  to  the  introduction  of  biofuels  and  monitor  the  behaviour  of  these  industries  to 
ensure that there is no discrimination against biofuels. 

•  Support  developing  countries  by  helping  them  to  produce  biofuels  and  by  maintaining 
market  access  conditions  that  are  no  less  favourable  than  those  provided  by  the  trade 
agreements currently in force. 

•  Bring forward a communication dealing specifically with biofuels early in 2006. 

Cross-cutting issues 

The Commission will: 

•  Assess the implementation of the energy crop scheme. 

•  Finance  a  campaign  to  inform  farmers  and  forest  holders  about  the  properties  of  energy 

crops and the opportunities they offer. 

•  Bring  forward  a  forestry  action  plan  in  which  energy  use  of  forest  material  will  play  an 

important part. 

•  Review the impact of the energy use of wood and wood residues on forest based industries. 

•  Consider  how  the  waste  framework  legislation  could  be  amended  to  facilitate  the  use  of 

clean wastes as fuel. 

•  Review how the animal by-products legislation could be amended in order to facilitate the 
authorisation and approval of alternative processes for the production of biogas and other 
biofuels 

•  Encourage the European Committee for Standardisation to speed up work on standards for 

the quality of biomass fuels. 

•  Explore how to develop a European spot market in pellets and chips. 

EN 

18 

   EN 

 
•  Encourage Member States to establish national biomass action plans.  

Encourage  Member  States  and  regions  to  ensure  that  the  benefits  of  biomass  are  taken  into 
account when preparing their national reference frameworks and operational plans under the 
cohesion policy and the rural development policy.  

Research 

The Commission will: 

•  Continue to encourage the development of an industry-led “Biofuel technology platform”. 

•  Consider how best to take forward research into the optimisation of agricultural and woody 

crops for energy purposes, and biomass to energy conversion processes. 

•  Give a high priority to research into the “bio-refinery” concept, finding valuable uses for 

all parts of the plant. 

•  Give a high priority to research into second-generation biofuels, with an aim of improving 
their  efficiency  and  cost-effectiveness;  a  substantial  increase  in  Community  funding  is 
expected. 

EN 

19 

   EN 

 
ANNEX 2 – EU biomass production potential 

The table assesses the EU’s potential to produce biomass for energy use. These estimates are 
conservative because they are based on the following assumptions: 

•  no effect on domestic food production for domestic use; 

•  no increase in pressure on farmland and forest biodiversity; 

•  no increase in environmental pressure on soil and water resources; 

•  no ploughing of previously unploughed permanent grassland; 

•  a  shift  towards  more  environmentally  friendly  farming,  with  some  areas  set  aside  as 

ecological stepping stones; 

•  the  rate  of  biomass  extraction  from  forests  adapted  to  local  soil  nutrient  balance  and 

erosion risks. 

The first column of the table shows the quantities of EU-produced biomass used for energy 
purposes  today.  The  following  columns  show  the  potential  contribution  in  2010,  2020  and 
2030. The potential for 2010 is 2½ times the contribution today. The potential for 2020 is 3 to 
3½ times the contribution today, and the potential for 2030 is 3½ to 4½ times that of today. 
Forests, wastes and agriculture all make  a  big contribution  to this potential for growth. The 
increase from forestry comes from an increase both in fellings and in the use of residues. The 
increase from agriculture is driven by the reform of the common agricultural policy. 

EU biomass production potential42 

Mtoe 

Biomass 
consumption, 
2003 

Potential, 
2010 

Wood direct from 
forest (increment 
and residues) 

Organic wastes, 
wood industry 
residues, 
agricultural and 
food processing 
residues, manure 

Energy crops 
from agriculture 

TOTAL 

6743 

2 

69 

Potential, 2020 

Potential, 2030 

43 

39-45 

39-72 

100 

100 

102 

43-46 

76-94 

102-142 

186-189 

215-239 

243-316 

42 

43 

Sources: 2003 data from Eurostat; projections for 2010, 2020 and 2030 from European Environmental 
Agency, “How much biomass can Europe use without harming the environment”, briefing 2/2005. 
This figure includes 59 Mtoe of wood and wood wastes; 3 Mtoe of biogas; and 5 Mtoe of municipal 
solid waste. 

EN 

20 

   EN 

 
 
 
 
                                                 
It should be underlined that due to lack of data, this table only covers the EU-25. It does not 
include  the  contribution  of  Bulgaria  and  Romania.  These  countries  will  be  EU  members  by 
2010, and have high biomass production potential. Nor does the table include imports. Most 
regions  of  the  world  have  higher  potential  to  produce  biomass,  relative  to  their  energy 
consumption,  than  the  EU.  Potential  EU  consumption  is  therefore  significantly  higher  than 
these figures would suggest. 

EN 

21 

   EN 

 
ANNEX 3 – A scenario to increase biomass energy using current technologies 

mtoe 

Electricity 

Heat 

Transport 

TOTAL 

Current (2003) 

Future (2010) 

Difference 

20 

48 

1 

69 

55 

75 

19 

149 

35 

27 

18 

80 

This  scenario  is  drawn  from  the  2004  communication  “The  share  of  renewable  energy”, 
expanded to the EU-25. It is compatible with achievement of the Community’s targets of: a 
12%  overall  share  of  renewable  energy;  a  21%  share  of  renewable  energy  in  electricity 
generation; and a 5.75% market share for biofuels.  

The  Commission  believes  this  scenario  can  be  achieved  in  the  three  sectors  sectors  – 
electricity, heat and transport – through the measures in this action plan – if not in 2010, the 
year for which these targets were set, then within a year or two of that date.  

This is the scenario that serves as the basis for the impact assessment on this Communication. 

EN 

22 

   EN 

 
ANNEX 4 – Environmental impacts 

Biomass has three main environmental impacts: 

- 

- 

Avoidance of greenhouse gas emissions 

The Commission estimates that the scenario in Annex 3, if achieved, would reduce 
greenhouse gas emissions by 209 million tonnes of CO2-eq per year. 

Environmental impact of the production of raw materials 

Agriculture can have significant effects on the environment, positive and negative. In 
general, the level of harmful effects varies with the intensity of the agriculture. This 
is  true  whether  crops  are  used  for  food  or  energy  purposes.  It  can  be  particularly 
harmful to bring previously uncultivated land (permanent grassland) into agricultural 
use.  

On the other  hand, using grass  cuttings from such land for biomass production can 
help  to  prevent  the  decline  of  biodiversity  on  species-rich  grasslands  due  to  land 
abandonment.  

Energy  crop  cultivation  can  help  to  improve  the  overall  profitability  of  the  farm 
business,  contributing  to  the  maintenance  of  farming  in  areas  where  this  may  be 
useful from an environmental (or wider sustainable development) perspective. This is 
important  in  a  number  of  regions  to  improve  soil  stability  and  prevent  irreversible 
landslide damage. Another potential positive aspect of energy crop production is its 
contribution  to  the  establishment  of  new  crop  rotation  systems  that  are  more 
advantageous from a wider environmental point of view (for example, alternatives to 
the monoculture of maize).  

If  energy  crops  are  grown  on  agricultural  land  that  was  previously  used  for  food 
production,  the  change  in  environmental  pressure  depends  on  which  biomass  crops 
are cultivated.  

The plantation of tree crops to enhance soil cover on degraded land can also have a 
globally positive impact. However this should not take place on steppic or mountain 
habitats that have a high biodiversity value. 

The  use  of  wastes  and  residues  for  energy  purposes  often  gives  an  environmental 
bonus compared with other means of disposal. For forest residues, the environmental 
impact depends on the local soil nutrient balance and the risk of erosion, which may 
require a certain amount of the residues (especially foliage) to be left on site. In some 
regions, however, their extraction help to reduce the risk of fire. 

- 

Environmental impact of the use of biomass 

Like  fossil  fuels,  biomass  emits  pollutants.  Advanced  emission  control  equipment 
can virtually eliminate this, however. Such equipment is already standard in transport 
and,  increasingly,  in  electricity  generation.  The  situation  is  less  favourable  with 
heating, particularly home heating. 

EN 

23 

   EN 

 
This analysis points to two priorities:  

•  the  need  to  guarantee  that  site-specific  environmental  requirements  are  observed  when 
producing  biomass  –  this  will  be  addressed  in  the  Commission’s  2006  report  on  the 
implementation of the biofuels directive; 

•  improving  the  pollution  performance  of  household  biomass  burning  –  this  will  be 
addressed as part of the measures proposed in this action plan to develop biomass heating. 

The Commission will also take steps to improve understanding of the costs and environmental 
impacts of all transport fuels, including conventional biofuels. 

EN 

24 

   EN 

 
ANNEX 5 – Renewable energy and the directive on the energy performance of buildings 

The  directive  on  the  energy  performance  of  buildings44  requires  Member  States,  when 
calculating the energy performance of buildings, to take into account the positive influence of 
"heating and electricity systems based on renewable energy sources". The relative importance 
attached to different kinds of renewable energy will be decided by the Member States in their 
transposition of the directive, allowing them, in principle, to attach substantial premia to the 
use of biomass in their calculation methods.  

Moreover, for new buildings larger than 1000 square meters, Member States are required to 
carry out technical, environmental and economic feasibility studies on the use of decentralised 
energy supply systems based on renewable energy, on CHP and on district or block heating or 
cooling.  This  also  gives  Member  States  considerable  leeway  to  promote  biomass.  In  many 
Member States, biomass heating is one of the most practical and cost-effective options. 

During 2006, taking into account comments received on the energy efficiency Green Paper45, 
the  Commission  will  decide  how  it  thinks  the  directive  should  be  further  developed.  The 
possibilities it will consider could include: 

•  amending  the  annex  to  the  directive  to  ensure  that  calculation  procedures  allow  greater 
weight  and  more  active  promotion  to  be  given  to  biomass  heating  and  other  forms  of 
renewable energy; 

•  reducing the thresholds in the directive so that many more new buildings would have to be 
considered  for  renewable  energy  before  construction  starts,  and  many  more  renovation 
projects  would  need  to  meet  minimum  efficiency  requirements  based  on  energy 
performance calculations that include the positive influence of renewable energy sources, 
including biomass; 

•  setting  EU-wide  minimum  energy  performance  standards  and  criteria  that  could  also 
promote the use of biomass where it is technically feasible and economically interesting. 

At  the  same  time,  the  Commission  will  examine  other  options  for  development  of  the 
directive, including inter alia the use of energy-efficient building materials. 

44 

45 

Directive  2002/91/EC  of  the  European  Parliament  and  of  the  Council  of  16  December  2002  on  the 
energy performance of buildings (OJ L 1, 4.1.2003). 
COM(2005) 265, 22.6.2005. 

EN 

25 

   EN 

 
                                                 
ANNEX 6 – Biomass for electricity generation 

Electricity  can  be  generated  from  all  types  of  biomass.  Several  reliable  technologies  are 
available.  These  technologies  can  be  used  to  “co-fire”  biomass,  by  mixing  it  with  coal  or 
natural gas, or to run freestanding power stations.  

Large centralised power plants, like those used to burn straw in Denmark or forest residues in 
Finland,  offer  the  best  economic  performance,  especially  if  they  are  also  used  for  heat 
(combined  heat  and  power,  CHP).  Co-firing  biomass  with  coal  is  another  good  centralised 
option in existing large power plants.  

It is more efficient, when electricity is generated from biomass, to make use of the heat that is 
produced  as  well.  Member  States  can  support  this  in  the  design  of  support  schemes  for 
electricity  generated  from  renewable  energy  sources,  or  through  CHP  support  schemes 
developed in accordance with the harmonised European efficiency reference values for CHP 
which will come into force in February 2006 in accordance with the CHP directive46.  

Smaller decentralised plants burning solid biomass or biogas tend to cost more, but often have 
advantages  for  the  environment  and  for  rural  development.  The  EU  structural  funds  or  its 
rural  development  programme  can  be  used  to  study  their  optimal  location  in  relation  to 
biomass availability, transport infrastructure, grid connection possible and labour markets. 

The  Commission  encourages  Member  States  to  harness  the  potential  of  all  cost-effective 
forms  of  biomass  electricity  generation  rather  than  focusing  on  one  form  alone.

46 

Directive  2004/8/EC  of  the  European  Parliament  and  of  the  Council  of  11  February  2004  on  the 
promotion of cogeneration based on a useful heat demand in the internal energy market and amending 
Directive 92/42/EEC (OJ L 52, 21.2.2004). 

EN 

26 

   EN 

 
                                                 
ANNEX 7 – Transport biofuels: background 

In  2001  the  Commission  adopted  a  communication  on  alternative  fuels  for  road  transport, 
identifying three fuels (biofuels, natural gas and hydrogen) that could play a big part.47 It was 
accompanied  by  legislative  proposals  requiring  Member  States  to  promote  biofuels  and 
making  it  easier  to  use  fuel  tax  exemptions  to  do  this.  These  proposals  were  adopted,  in 
amended form, in 200348. 

Since  the  adoption  of  the  communication  the  market  share  of  biofuels  has  increased  from 
0.2%  in  2000  to  0.8%  in  2004.  About  90%  of  biofuel  consumption  is  covered  by  domestic 
raw  materials,  10%  by  imports.  Out  of  the  EU25’s  total  arable  land  of  97  million  hectares, 
about  1.8  million  hectares  were  used  for  producing  raw  materials  for  biofuels  in  2005.  As 
expected, there has  been a shift towards low blends and away from the high blends  or pure 
biofuels that prevailed in 2001. Biodiesel’s share of total biofuel consumption has stayed at 70 
to 80%. 

The rise in the oil price and a growing interest in new markets for agricultural products in the 
light  of  the  reform  of  the  common  agricultural  policy  -  and  the  sugar  regime  in  particular  - 
have led to a wider appreciation of biofuels’ advantages at European level and have provoked 
widespread discussion in Member States.  

“Second-generation” biofuels from wood and wastes are currently more expensive than first-
generation  biofuels  from  agricultural  crops  and  have  not  yet  been  fully  demonstrated  on  a 
commercial  scale.  Once  that  has  been  achieved, they  will  widen  the  range  of  raw  materials 
that can be used and could also further improve biofuels’ environmental profile. It should be 
underlined, however, that first-generation biofuels already offer significant benefits and  that 
any  significant  contribution  from  second-generation  biofuels  will  not  materialise  until  after 
2010. Therefore, the emphasis of this action plan is on first-generation biofuels. 

47 
48 

COM(2001) 547. 
Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003 on the promotion 
of  the  use  of  biofuels  or  other  renewable  fuels  for  transport  (OJ  L  123,  17.5.2003),  and  Council 
Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of 
energy products and electricity (OJ L 283, 31.10.2003). 

EN 

27 

   EN 

 
                                                 
ANNEX 8 – Biofuels: progress at national level 

Member 
State 

Market share 
2003 

National indicative 
target for 2005 

Targeted increase, 2003-2005 

AT 

BE 

CY 

CZ 

DK 

EE 

FI 

FR 

DE 

GR 

HU 

IE 

IT 

LA 

LI 

LU 

MT 

NL 

PL 

PT 

SK 

SI 

ES 

SV 

UK 

EU25 

Sources 

0.06% 

0 

0 

2.5% 

2% 

1% 

+2.44% 

+2% 

+1% 

1.12% 

3.7% (2006) 

+ 1.72% (assuming linear path) 

0 

0 

0.1% 

0.68% 

1.18% 

0 

0 

0 

0.5% 

0.21% 

0 (assumed) 

0 (assumed) 

0.02% 

0.03% 

0.49% 

0 

0.14% 

0 (assumed) 

0.76% 

1.32% 

0.03% 

0.6% 

0% 

2% 

0.1% 

2% 

2% 

0.7% 

0.4-0.6% 

0.06% 

1% 

2% 

2% 

not yet reported, 
assume 0 

0.3% 

2% (2006) 

0.5% 

2% 

2% 

0.65% 

2% 

3% 

0.3% 

1.4% 

+0% 

+2% 

+0% 

+1.32% 

+0.82% 

+0.7% 

+0.4-0.6% 

+0.06% 

+0,5% 

+1.79% 

+2% 

not yet reported 

+0.28% 

+0% (promotional measures will come into 
force from January 2006) 

+0.01% 

+2% 

+1.86% 

+0.65% 

+1.24% 

+1.68% 

+0.27% 

+0.8% 

2003: National reports under the biofuels directive except Belgium: Eurostat (figure for 2002) 
and Italy: EurObserv’Er. 

2005: National reports under the biofuels directive.  

National reports under the biofuels directive are available at  
http://europa.eu.int/comm/energy/res/legislation/biofuels_en.htm 

EN 

28 

   EN 

 
ANNEX 9 – Implementing the biofuels directive: fuel tax exemptions and biofuel 
obligations 

Member States are using two main tools to implement the Biofuels Directive: tax exemptions 
and biofuels obligations. 

Tax exemptions 

Member  States  make  a  good  deal  of  use  of  fiscal  policy  to  promote  biofuels.  The  energy 
taxation directive establishes the framework for the consequent tax exemptions.  

Under Article 16 of this Directive, Member States can reduce taxes on biofuels or completely 
exempt  them  from  taxes,  without  needing  the  Commission’s  prior  approval  (on  fiscal 
grounds), as long as they respect certain strict conditions.  

The tax reduction or exemption cannot exceed the amount of tax which would otherwise be 
payable on the volume of biofuel present in the product that is eligible for the reduction. In 
addition,  it  should  be  emphasised  that  the  tax  reductions  or  exemptions  introduced  by 
Member States must be modified in line with changes in the price of raw materials, in order to 
ensure that the reductions do not lead to overcompensation of the additional costs of biofuel 
production.  The  fiscal  advantage  (exemption  or  reduction)  granted  to  a  fuel  of  renewable 
origin cannot exceed the difference between this fuel and an equivalent fossil fuel. 

These fiscal measures no longer need the prior, unanimous approval of other Member States. 
However,  they  remain  subject  to  state  aid  control.  The  Commission  has  taken  a  generally 
favourable attitude to the notifications received. The exemptions that have received state aid 
approval are listed in the table.  

Table - Biofuel tax exemptions that have received state aid approval 

Case 

C64/2000 FR 
N461/01 IT 
N480/02 SE 
N804/01 UK 
N512/02 SE 
N685/02 DE 
N717/02 IT 
N407/03 UK 
NN43/04 AT 
N187/04 SE 
N206/04 CZ 
N427/04 HU 
N582/04 IT 
N599/04 IRL 
N44/05 LT 
N223/05 CZ 
N314/05 EE 

Biofuels concerned 

ETBE 
Biodiesel 
All CO2-neutral fuels 
Biodiesel 
Biofuel pilot projects 
Bioethanol, biodiesel and vegetable oils 
Bioethanol and ETBE 
Bioethanol 
Bioethanol, biodiesel and vegetable oils 
Biofuel pilot projects 
Biodiesel 
Biodiesel and ETBE 
Biodiesel (prolongation of N461/01) 
Biodiesel, bioethanol and vegetable oils 
Biodiesel, bioethanol, vegetable oils and ETBE 
Biodiesel 
Bioethanol, biodiesel and vegetable oils 

reference 

OJ L 94, 10.4.2003, p. 1 
OJ C 146, 19.6.2002,p. 6 
OJ C 33, 6.2.2004, p.  
OJ C 238, 3.10.2002, p. 10 
OJ C 75, 27.3.2003, p. 2 
OJ C 86, 6.4.2004, p. 15 
OJ C 16, 22.1.2004, p. 22 
OJ C 193, 28.4.2005, p. 17 
Not published yet 
Not published yet 
Not published yet 
OJ C133, 31.5.2005, p. 2 
Not published yet 
OJ C 98, 22.4.2005, p. 10 
Not published yet 
Not published yet 
Not published yet 

All  decisions  not  to  raise  objections  can  be  found  on  the  Commission’s  website: 
http://europa.eu.int/comm/secretariat_general/sgb/droit_com/index_en.htm#aides 

EN 

29 

   EN 

 
However,  the  Commission  is  aware  that  the  system  of  tax  exemptions,  as  implemented,  is 
giving rise to three problems: 

1) 

2) 

3) 

The risk of unnecessarily high cost to the state and unnecessarily high payments 
to  undertakings.  Biofuels  producers  have  different  costs  but,  under  the  tax 
exemption  system,  all  receive  the  same  level  of  compensation.  If  the  level  of 
compensation is enough to bring high-cost producers into the market, there is a risk 
that it overcompensates lower-cost producers. The risk of overcompensation appears 
to be widespread, both within the Community and internationally. The services of the 
Commission are presently looking into several possibilities, including the limitation 
of detaxation to undenatured bioethanol (which is subject to the highest import duty) 
and/or making the rate of detaxation depend on the raw material used. 

Insufficient investor certainty. The Energy Taxation Directive limits the duration of 
tax  exemptions  to  six  years.  Among  the  schemes  adopted  to  date,  only  the  French 
scheme  lasts  as  long  as  this.  In  general,  Member  States  could  consider  taking 
coordinated measures to create a stable investment climate, in particular by making 
full use of the possibility under Community law to adopt six-year tax reliefs and to 
arrange  for  their  extension  well  before  the  term  has  expired.  However,  stakeholder 
consultation  has  clarified  that  even  this  period  of  certainty  is  less  than  needed  for 
some  investments,  particularly  in  second-generation  biofuels  but  also  in  first-
generation ethanol plants. 

While some Member States use open aid schemes, available to all, others have opted 
for a quota-based approach, limiting the quantity of biofuel that will qualify for the 
tax exemption and setting up a process to choose the firms that will benefit from it. 
The  Commission  sees  risks  of  non-transparency,  arbitrary  allocation  and  increased 
market concentration in quota-based schemes. 

Biofuels obligations 

At present there is increasing interest among Member States in the use of biofuel obligations, 
requiring fuel supply companies to incorporate a given percentage of biofuels in the fuel they 
place on the national market or face a penalty49. Obligations are in force in France and Austria 
and will come into force in Slovenia in 2006 and in the Czech Republic and the Netherlands 
in 2007. The UK and Germany have recently said that they will introduce them. Schemes vary 
in  relation  to:  the  point  in  the  distribution  chain  where  the  obligation  is  placed;  whether 
individual types of biofuel are distinguished; how compliance is monitored; whether they are 
implemented through a system of tradable certificates; and whether they coexist with fuel tax 
exemptions. 

Obligations  have  a  number  of  advantages.  They  place  responsibility  for  addressing  the 
problem of excessive oil dependence on the sector where it originates – while implying only a 
negligible increase in the cost of fuel. They give fuel supply companies an incentive to push 

49 

Obligations that take this form are compatible with the Fuel Quality Directive (Directive 98/70/EC of 
the  European  Parliament  and  of  the  Council  of  13  October  1998  relating  to  the  quality  of  petrol  and 
diesel  fuels  and  amending  Council  Directive  93/12/EEC  (OJ  L  350,  28.12.1998),  as  amended  by 
Directive  2003/17/EC  of  the  European  Parliament  and  of  the  Council  of  3  March  2003  (OJ  L  76, 
22.3.2003). By contrast, an obligation to incorporate a given proportion of biofuel in each litre of fuel 
sold would not be compatible with the Directive.. 

EN 

30 

   EN 

 
                                                 
down the cost of biofuels – and it follows that they are more cost-efficient. They can include a 
premium for second-generation biofuels. Unlike state aids, they are not subject to a time limit 
and so could be a good way to establish the stable framework that investors want. 

Compatibility between obligations and exemptions 

It  is  important  to  point  out  that  Article  16(6)  of  the  energy  taxation  directive  states  that  if 
Community law requires Member States to comply with legally binding obligations requiring 
them  to  place  a  minimum  proportion  of  biofuels,  the  option  for  Member  States  to  reduce 
excise  duties  under  fiscal  control  (that  is,  without  needing  specific  authorisation  from  the 
Council under unanimity) would disappear. 

EN 

31 

   EN 

 
ANNEX 10 – Trade in bioethanol 

1. 

Current trade in bioethanol  

There  is  currently  no  specific  customs  classification  for  bioethanol  for  biofuel 
production.  This  product  is  traded  under  code  22  07  which  covers  both  denatured 
(CN  22  07  20)  and  undenatured  alcohol  (CN  22  07  10).  Both  denatured  and 
undenatured  alcohol  can  then  be  used  for  biofuel  production.  It  is  not  possible  to 
establish from trade data whether or not imported alcohol is used in the fuel ethanol 
sector in the EU.  

An import duty of €19.2/hl is levied on undenatured alcohol, while an import duty of 
€10.2/hl applies to denatured alcohol.  

Table I 

Imports under code 2207 (in hl) 

Undenatured alcohol 
Denatured alcohol 
Total 

Av. 1999-2001 
1 167 935 
279 904 
1 447 839 

Av. 2002-04 
2 383 239 
180 988 
2 564 226 

% of total (02-04) 
93% 
7% 
100% 

Overall imports of alcohol under code 2207 averaged 2 564 226 hl over the 2002-04 
period, up from 1 447 839 hl over 1999-2001. Over 93% of them came under code 
22 07 10 (undenatured alcohol).  

The principal trade trends are summarised in Table II:  

Table II 

Total imports of alcohol under code 22 07 (in hl) by type of duty 

2002 

2003 

2004 

Av. 2002-04 

% of total 

Reduced duty  

227 285 

182 940

288 364

232 863 

Duty-free  

980 693 

2 027 632

1 709 282

1 572 536 

657 011 

494 771

1 124 699

758 827 

9%

61%

30%

MFN 

TOTAL  

a) 

b) 

c) 

1 864 989 

2 705 344

3 122 345

2 564 226 

100%

average imports of bioethanol increased by 77% over 2002-2004 compared to 
the previous three-year period (1999-2001) when they totalled 1 447 839 hl;  

over  that  period  70%  of  these  imports  were  traded  under  preferential 
conditions, out of which almost 61% were duty-free, while 9% benefited from 
some type of duty reduction; 

30%  of  EU  trade  under  code  22  07  takes  place  under  MFN  (most  favoured 
nation) conditions.  

EN 

32 

   EN 

 
 
 
 
With respect to the largest exporting countries: 

a) 

over the 2002-2004 period, Pakistan was the largest duty-free exporter with an 
average of 501 745 hl followed, at a distance, by Guatemala with 223 782 hl;  

b)  Brazil is the only country capable of exporting large quantities as MFN with an 
average of 649 640 hl over the same period, with the second MFN exporter, the 
USA, on only 20 109 hl; 

c) 

one  country  -  Ukraine  -  accounts  for  the  vast  majority  of  imports  at  reduced 
duty  with  107 711  hl  over  the  2002-04  period.  Egypt  came  second  with  over 
43 000 hl.  

2. 

Preferential imports of bioethanol into the EU  

The  EU’s  preferential  trade  basically  comes  under  two  regimes:  the  Generalised 
System  of  Preferences  (including,  among  others,  the  Everything  But  Arms  (EBA) 
initiative)  and  the  Cotonou  Agreement.  The  main  preferences  accorded  by  each  of 
them are summarised in Table III and described in detail in the following sections.  

Import conditions under code 22 07 under EU’s main preferential agreements  

Table III 

GSP normal 

Duty 
reduction  

15% up to 
31.12.2005 

0%  as  of 
1.1.2006 

Quantitative 
restrictions  

Beneficiaries  

NO 

All GSP beneficiaries if 
not graduated. 

GSP+ 

100% 

NO 

Bolivia, Colombia, Costa 
Rica, Ecuador, Guatemala, 
Honduras, Panama, Peru, 
El Salvador, Venezuela, 
Georgia, Sri Lanka and 
Mongolia  

2.1.  GSP 

EBA 

100% 

Cotonou 

100% 

NO 

NO 

LDCs 

ACPs 

The  current  Council  Regulation  (Regulation  (EC)  2501/2001),  in  force  until  31 
December 2005, classifies denatured and undenatured alcohol under code 22 07 as a 
sensitive product, According to article 7.4 of the regulation, imports of this alcohol 
from all GSP beneficiary countries qualify for a 15% reduction of the MFN duty50. 

Under  the  special  drugs  regime  envisaged  by  Council  Regulation  (EC)  2501/2001, 
which was in force from the early nineties until repealed on - 30 June 2005, exports 
from  a  number  of  countries  (Bolivia,  Colombia,  Costa  Rica,  Ecuador,  Guatemala, 
Honduras, Nicaragua, Panama, Peru, Pakistan, El Salvador and Venezuela) qualified 
for duty-free access under code 22 07.  

50 

Article 7(4) of Council Regulation (EC) No 2501/2001 of 10 December 2001.  

EN 

33 

   EN 

 
 
                                                 
The new GSP Regulation [Council Regulation (EC) No 980/2005 of 27 June 2005], 
which  will  apply  from  1 January 2006  to  31 December 2008,  no  longer  envisages 
any  tariff  reduction  for  either  denatured  or  undenatured  alcohol  under  code  22 07 
(still  classified  as  a  sensitive  product).  This  Regulation  put  in  place  a  special 
incentive  arrangement  for  sustainable  development  and  good  governance  (the  new 
GSP  +  incentive  scheme)  which  has  been  applying  on  a  provisional  basis  since 
1 July 2005  and  will  apply  on  a  permanent  basis  from  1 January 2006  to 
31 December 2008.  This  new  incentive  arrangement  grants  unlimited  and  duty  free 
access (suspension of Common Customs Tariff duties) to denatured or undenatured 
alcohol under code 2207. It includes all the countries which already benefited from 
the previous drugs scheme, with the exception of Pakistan which is subject to the full 
MFN duty.  

The new incentive arrangement now also includes Georgia, Sri Lanka and Mongolia, 
which have not so far exported bioethanol to the EU.  

Moreover,  a  special  arrangement  for  least  developed  countries  (the  EBA  initiative) 
provided  for  by  the  new  GSP  Regulation  offers  an  unlimited  duty-free  access  to 
denatured or undenatured alcohol under code 2207. 

2.2.  Cotonou Agreement 

Under  the  Cotonou  Agreement,  ACP  countries  qualify  for  duty-free  access  for 
denatured  and  undenatured  alcohol  under  code  22 07  with  the  sole  exception  of 
South Africa. According to Regulation (EC) 2501/2001, South Africa enjoys a 15% 
reduction  in  customs  duties.  From  1 January 2006  it  will  therefore  have  to  pay  full 
MFN duty. During the ongoing European Partnership Agreement (EPA) negotiations 
with ACP countries, the customs duties of alcohol under code 22 07 will need to be 
negotiated.  

2.3.  Other countries with preferential arrangements  

Egypt  currently  has  unlimited  duty-free  access  to  the  EU  under  the  Euro-
Mediterranean  Agreement.  Before  that,  it  qualified  for  a  15%  reduction  under  the 
GSP scheme.  

Norway,  which  ranks  among  the  top  ten  exporters  with  a  total  of  89 375 hl  under 
code  22 07  in  2004,  has  been  granted  duty-free  access  to  the  EU  within  the 
framework of tariff rate quotas (TRQs) since the mid-nineties. In 2005 the TRQ will 
total  164 000 hl  for  exports  under  code  22 07 10  (up  from  134 000 hl  the  previous 
year) and 14 340 hl under code 22 07 20, up from 3 340 hl.  

3. 

Trade analysis  

Table IV sums up trade under the various preferential arrangements.  

Table IV 

Imports under preferential conditions 2002 – 2004 (in hl) 

2002 

2003 

2004 

Av. 2002-04  % of total trade 

2002-04 

GSP normal 

227 285 

182 940 

288 364 

232 863 

9% 

EN 

34 

   EN 

 
 
GSP +  

ACP 

EBA  

Others  

553 156 

1 569 005 

1 412 896 

1 178 352 

291 055 

268 784 

154 663 

238 167 

30 018 

86 247 

18 956 

45 074 

106 464 

103 597 

122 768 

110 943 

Total preferential 

1 207 978 

2 210 573 

1 997 646 

1 805 399 

Total MFN  

Grand total  

657 011 

494 771 

1 124 699 

758 827 

1 864 989 

2 705 344 

3 122 345 

2 564 226 

47.5% 

9% 

1.5% 

4% 

70% 

30% 

100% 

3.1.  GSP 

Trade data for 2001–2004 show a dramatic increase in bioethanol exports from the 
countries benefiting from the special drugs regime in previous years. Although these 
countries have benefited from the same regime since the 1990s, the unlimited duty-
free  access  enjoyed  under  it  at  a  moment  of  rising  demand  for  alcohol  under  code 
22 07 can be considered the single most important factor underlying the doubling of 
bioethanol  exports  from  these  countries  to  the  EU.  All  major  exporters  under  code 
22 07  over  the  last  three  years  benefit  from  such  a  scheme:  Pakistan,  Guatemala, 
Peru, Bolivia, Ecuador, Nicaragua and Panama.  

Altogether, exports of ethanol from the GSP plus beneficiaries totalled 1 412 896 hl 
in 2004: practically all duty-free exports to the EU and 46% of all exports under code 
22 07 to the EU over the 2002-2004 period.  

Thanks  to  its  lower  production  costs,  Pakistan  took  a  big  lead  over  the  other  GSP 
beneficiaries  with  1 008 656 hl  in  2004  (the  second  largest  exporter  in  the  world) 
followed, at a distance, by Guatemala with over 250 000 hl.  

Under  the  new  GSP  an  exclusion  of  Pakistan  from  the  list  of  countries  having 
unlimited duty-free access to the EU market, will remove from the market one of the 
most aggressive and competitive producers. All old direct competitors under the GSP 
drugs regime will continue to enjoy duty-free access to the EU market and might be 
expected to fill the gap left by Pakistan as they have relatively low production costs 
too.  

Nevertheless, at US$14.52/hl, Pakistan has production costs closer to Brazil’s which, 
with production costs of US$13.55/hl, manages to export substantial quantities to the 
EU paying the full MFN duty. Pakistan might therefore be expected to continue to be 
able to export significant quantities of ethanol to the EU, albeit not at the same pace 
as before, thus utilising the increased production capacity built over the last couple of 
years.  

By contrast, the 15% reduction offered by the normal GSP regime opened access for 
approximately  9%  of  exports  of  the  same  product  to  the  EU  market.  Unlike  the 
obvious  favourable  impact  of  the  GSP  drugs  regime,  the  impact  of  the  15%  duty 
reduction is more difficult to assess. The two largest exporting countries benefiting 
from  such  a  reduction  are  Ukraine  and  South  Africa.  In  the  case  of  Ukraine,  the 
introduction of the 15% reduction coincided with a dramatic increase in exports over 
the 2002-2004 period. For South Africa, on the other hand, the last two years showed 

EN 

35 

   EN 

 
 
exports stable on approximately 50 000 hl, with a dramatic decrease over the 2000-
2001 period. Under these conditions, it is difficult to predict the impact of removal of 
the 15% import duty reduction although it seems fair to say that even such a small 
reduction seemed to provide a competitive advantage over the countries paying full 
duty.  

3.2.  EBA 

So far, exports of bioethanol from countries benefiting from the special arrangement 
for the least developed countries (the EBA initiative) under the GSP (EC) Regulation 
980/2005 to the EU have been negligible and have primarily come from one country 
- the Democratic Republic of Congo - which already qualified for duty-free access as 
an ACP country. At the moment, the Democratic Republic of Congo is the only LDC 
with  sizeable,  though  erratic,  exports  of  alcohol  to  the  EU  under  code  22 07  since 
1999. In 2004 exports totalled 18 956 hl after peaking at 86 246 hl the year before.  

It is fair to recognise, however, that EBA dates back to only 2001 and that some of 
the  countries  which  did  not  have  duty-free  access  under  other  earlier  regimes 
(notably Bangladesh, Laos, Cambodia, Afghanistan and Nepal) might find new ways 
of access to the EU in the medium or longer term. 

New opportunities might emerge in these countries - which generally do not produce 
(or are not very competitive at producing) sugar cane or any other raw material for 
bioethanol production from their own resources – in the form of processing molasses 
imported from their competitive, sugar-producing neighbours. This might be the case 
with Cambodia which could use raw material from Thailand, or with Bangladesh and 
Nepal which might process raw material from India. At the moment it is difficult to 
quantify future potential production from these countries but investments are known 
to have been made in some of them, like Bangladesh. 

In  this  respect  it  is  important  to  stress  that  under  Council  Regulation  (EC) 
2501/2001, imports are subject to the GSP rules of origin plus regional cumulation. 
The  Commission  is  currently  examining  a  proposal  for  a  new  regulation  which 
would  introduce  the  principle  of  determination  of  the  preferential  rules  of  origin 
based  on  the  value-added  method.  Distillation  should  continue  to  be  considered  an 
operation with sufficient added value to confer origin on the finished product.  

3.3.  Cotonou Agreement 

•  On the whole, ACP exports to the EU under code 22 07 have so far been limited. Over the 
last couple of years they have, however, been fairly stable at 238 167 hl despite a low of 
154 663 hl in 2004 (excluding South Africa: 48 728 hl). 

•  Swaziland and Zimbabwe are by far the leading exporters with an average of 85 562 hl and 
120 261 hl respectively over the 2002-04 period. A number of ACP countries are likely to 
consider  bioethanol  production  as  an  alternative  to  sugar  production  as  part  of  the 
restructuring  resulting  from  the  EU  sugar  reform.  However,  bioethanol  production  from 
sugar  cane  might  remain  relatively  low  and  limited  only  to  countries  where  sugar 
production is competitive, such as Swaziland and Zimbabwe, which have production costs 
close to Brazil’s and India’s and which are already exporting substantial quantities to the 
EU under code 22 07.  

EN 

36 

   EN 

 
ANNEX 11 – Achieving the 5.75% biofuels target: the balance between domestic 
production and imports 

One  of  the  key  variables  in  biofuel  policy  is  the  balance  between  domestic  production  and 
imports. Biofuels and their raw materials are traded on world markets. An autarkic approach 
to meeting the EU’s needs is neither possible nor desirable. But the Union still has a degree of 
discretion  about  how  far  to  encourage  domestic  production  and/or  imports.  The  purpose  of 
this annex is to set out the facts and assess the pros and cons of different options. 

Tools for shifting the balance between domestic production and imports 

The  starting  point  is  to  understand  the  tools  that  can  be  used  to  shift  the  balance  between 
domestic production and imports. 

In the case of bioethanol, the main tool for shifting the balance is the duty paid. EU-produced 
bioethanol can be expected to cost about €900/toe by 2010 (costs are currently higher because 
most production plants are rather small). The cheapest imported bioethanol (from Brazil) can 
be bought in Europe at around €680/toe. Bioethanol imports are subject to duties ranging from 
zero  (for  imports  from  certain  countries  and/or  under  certain  conditions)  to  about  €376/toe 
(for undenatured ethanol imported at the maximum tariff). Consequently, imported bioethanol 
is cheaper than European if no import duty is paid, and more expensive if the maximum tariff 
is paid. If all tariffs on bioethanol were removed, it would be difficult for domestic producers 
to stay in the market. 

In Germany, only fuel containing undenatured ethanol is eligible for fuel tax exemption. Even 
imported  bioethanol  needs  the  exemption  in  order  to  be  price-competitive  with  petrol 
(currently around €457/toe51). 

More details on trade arrangements affecting bioethanol are given in Annex 10.  

Imports of biodiesel or of the vegetable oils used to make it are subject to low or zero tariffs.  

Biodiesel can be made from most types of vegetable oil, notably rape oil, soya oil and palm 
oil.  

EU rape oil competes at the world market price. Imported soya oil and palm oil are cheaper. 
However,  biodiesel  made  predominantly  from  one  or  another  of  these  oils  does  not  comply 
with  the  “biodiesel”  or  “FAME”  standard,  EN14214  –  and  it  needs  to  comply  with  this 
standard if it is to be sold for use in unadapted vehicles. Biodiesel made predominantly from 
rape oil does comply with the standard, even if blended with a small amount – around 25% – 
of one of the other oils.  

The  Commission  believes  that  the  limits  in  standard  EN14214  could  be  adapted  to  allow  a 
higher proportion of other oils – perhaps 50% – to be used in biodiesel. 

51 

Assuming oil at $60/barrel and the € at $1.25. 

EN 

37 

   EN 

 
                                                 
Scenarios for assessment 

Three theoretical models must be assessed: 

1) 

2) 

3) 

Minimum share for imports; 

Maximum share for imports; 

Balanced approach. 

Scenario 1: Minimum share for imports 

The first point to assess  is  the technical feasibility  of  this option and, in particular, whether 
sufficient land is available to produce the necessary crops. 

The Commission estimates that in order to meet the biofuel directive’s objective of a 5.75% 
share  of  the  petrol  and  diesel  market  in  2010,  18.6  mtoe  of  biofuels  will  be  needed.  Most 
domestic  biofuel  production  will  come  from  three  crops:  sugarbeet  and  cereals  (for 
bioethanol, replacing petrol) and rape (for biodiesel, replacing diesel). Average biofuel yields 
per hectare vary widely, depending on the characteristics of the crops, the soil and the climate. 
The following averages have been assumed: 

Sugarbeet 

Cereals 

Rape 

2.9 toe/ha 

0.9 toe/ha 

1.1 toe/ha 

On the basis of this it can be estimated that about 17 million hectares of EU agricultural land 
would be needed to meet the directive’s objective entirely from domestic production.  

This can be compared with total EU arable land of 97 million hectares.  

In the present context where crop production per hectare is rising steadily and the reform of 
the sugar regime will release resources currently used for food production, this appears to be 
technically  feasible  in  principle.  The  Union  is  technically  capable  of  meeting  its  biofuels 
targets  for  2010  from  domestic  production,  although  it  should  be  noted  that  there  are 
agronomic  limits  on  the  cultivation  of  individual  crops  (e.g.  the  frequency  with  which  rape 
can be included in crop rotation cycles). 

However,  it  should  be  pointed  out  that:  existing  trade  arrangements  and  World  Trade 
Organisation commitments do not permit the EU to close the door to imports of biofuels and 
biofuel  raw  materials;  these  materials  are  already  being  imported  today;  and  there  is  no 
proposal  to  increase  tariff  protection  for  these  goods.  Therefore,  the  scenario  of  100% 
domestic production is a theoretical one and would not be possible in practice. 

Even  interpreted  as  “minimum  imports”  rather  than  “no  imports”,  this  scenario  would  have 
two disadvantages.  

First, it would expose the EU food and biofuels sectors to excessive increases in the price of 
raw materials. By creating a new market that could be served only by domestically produced 
crops, the biofuels policy would drive up their prices, particularly for cereals and rape which 
are currently traded at world market prices.  

EN 

38 

   EN 

 
Second, it would do nothing to encourage the production of biofuels elsewhere in the world 
where the creation of new biofuels industries – partly serving foreign customers like the EU, 
partly domestic needs – can bring benefits to developing countries. In addition, to the extent 
that  increased  consumption  of  biofuels  is  a  tool  to  exercise  downward  pressure  on  the  oil 
price, this is a global phenomenon – and the EU therefore has an interest in promoting biofuel 
production globally.  

Scenario 2: Maximum share for imports 

By encouraging amendment of the biodiesel standard, the EU would ensure that the maximum 
proportion of its biodiesel consumption is met from imports. The Commission believes that, 
with  an  appropriate  amendment,  imported  vegetable  oils  would  capture  about  50%  of  the 
biodiesel market. However, much of the processing is likely to continue to take place in the 
Union. 

By  removing  all  tariffs  on  bioethanol,  the  EU  would  ensure  that  the  maximum  share  of  its 
bioethanol consumption is met from imports. The Commission believes that bioethanol made 
from agricultural crops in Europe will not be able to compete on price with bioethanol made 
from  sugar  cane  from  tropical  countries.  Therefore,  the  result  of  this  policy  would  be  that 
100%  of  EU  bioethanol  consumption  would  be  covered  by  imports.  There  would  be  no 
domestic bioethanol industry. 

On  the  hypothesis  that  56%  of  biofuel  consumption  will  be  biodiesel  (in  line  with  diesel’s 
current share of the petrol and diesel market), these steps would lead to imported biofuels (or 
their raw materials) taking about 70% of the EU biofuel market. 

For  biodiesel,  this  approach  has  merit.  It  would  enable  both  EU  producers  and  developing 
countries to benefit, in a balanced way, from the growth of biofuel consumption in the EU. It 
is  an  appropriate  response  to  the  limits  on  expansion  of  rape  production  in  the  EU.  An  EU 
industry would continue to exist.  

But  this  strategy  would  not  address  the  serious  concerns  that  the  present  expansion  of 
vegetable  oil  production  –  such  as  palm  oil  and  soya  –  in  developing  countries  could  be 
responsible  for  destruction  of  natural  habitats  and  deforestation  and  that  increased  demand 
from the EU could translate into an increased rate of deforestation. If this is true, it would be 
an  important  factor  to  set  against  the  greenhouse  gas  emission reductions  that  the  increased 
use of biofuels would deliver. If such doubts cannot be removed, public support for biofuels 
will  be  undermined.  Therefore,  it  would  be  wrong  to  maximise  the  import  of  biofuels/raw 
materials  for  biofuels  without  paying  attention  to  the  environmental  impact  of  their 
cultivation. 

For  bioethanol,  this  is  not  a  good  approach  for  the  EU  to  follow.  If  the  EU  obtains  its 
bioethanol  from  imports  rather  than  domestic  production,  the  cost  will  be  about  25%  lower 
and  the  global  greenhouse  gas  benefits  will  be  greater.  However,  there  will  be  no  rural 
development  benefits  for  Europe.  And  the  security  of  supply  benefits  will  be  less,  because 
Europe  will  not  have  the  advantage  of  developing  a  new  domestic  fuel  source.  From  a 
practical  point  of  view,  it  must  be  remembered  that  implementation  of  the  Union’s  biofuel 
policy  depends  on  the  efforts  of  Member  States.  If  there  is  no  prospect  of  domestic 
involvement  in  the  production  of  bioethanol,  it  is  likely  that  many  of  them  will  focus  their 
efforts on biodiesel instead – eroding the market into which developing countries hope to sell. 
Finally, if the least developed countries are not able to compete on price on the world sugar 

EN 

39 

   EN 

 
market, there is no reason to believe that they will be able to do so on the world bioethanol 
market if trade is made completely free. 

Environmental  concerns  are  also  raised  about  the  cultivation  of  sugar  cane  for  bioethanol. 
Against this, it is argued that most bioethanol comes and will continue to come from land that 
has been under cultivation for a long time. 

Scenario 3: Balanced approach 

The Commission believes that an intermediate approach would avoid the disadvantages of the 
first two options. 

This approach should have five elements: 

i) 

ii) 

iii) 

amendment of standard EN14214 to facilitate the use of a wider range of vegetable 
oils  for  biodiesel,  to  the  extent  feasible  without  significant  ill  effects  on  fuel 
performance; 

maintain market access conditions for imported bioethanol that are no less favourable 
than those provided by trade agreements currently in force52; 

pursue  a  balanced  approach  in  ongoing  free  trade  agreement  negotiations  with 
ethanol-producing  countries/regions. The  EU must respect the interests of domestic 
producers  and  EU  trading  partners,  within  the  context  of  rising  demand  for 
biofuels53; 

iv) 

address  the  issue  of  amending  the  biofuels  directive  so  that  only  biofuels  whose 
cultivation complies with minimum sustainability standards count towards its targets; 

v) 

support developing countries in the production of biofuels.  

The system of certificates would need to apply in a non-discriminatory way to domestically 
produced  biofuels  and  imports.  In  particular,  it  would  need  to  be  non-discriminatory  in 
relation to the requirements of the World Trade Organisation. It would need to be developed 
in  line  with  other  initiatives  for  certification  of  agricultural  and  forestry  produce  and  could 
require EU support in its introduction. The potential impact on developing countries would be 
taken into consideration before any system of certification is introduced. 

The Commission estimates that under this approach:  

- 

- 

52 

53 

price increases for agricultural crops could be kept in an acceptable range; 

a sufficient share of the market for biodiesel raw materials, a majority of the market 
for biodiesel production, and a majority of the market for bioethanol would remain 
domestic; 

In  particular,  under  the  Everything  But  Arms,  Generalised  System  of  Preferences  (+)  and  Cotonou 
agreements, which presently provide free access to the EU for ethanol imports. 
Note:  existing  trade  agreements,  notably  Everything  But  Arms  (EBA),  Generalised  System  of 
Preferences (GSP) + and Cotonou, which presently provide free access to the EU for ethanol exports, 
will maintain this level of access. 

EN 

40 

   EN 

 
                                                 
- 

- 

least-developed  countries,  including  those  for  whom  the  reform  of  the  EU  sugar 
regime is a particular challenge and whose bioethanol is not subject to tariffs, would 
gain a share of the EU biofuel market; 

the promotion of biofuels would not cause deforestation and habitat destruction. 

Notes on the production of biofuels in developing countries 

Support for developing countries in the production of biofuels is in the EU’s interest both for 
development  policy  reasons  and  to  maximise  downward  pressure  on  the  oil  price.  It  could 
contribute in specific countries, as in the EU but often in more critical situations, to greater 
energy  security  and  access  to  energy,  improved  foreign  exchange  and  trade  balances, 
economic development and employment in rural regions, and environmental benefits. To the 
extent  that  the  development  of  biofuel  consumption  will  exert  downward  pressure  on  the 
global  oil  price,  consumption  in  developing  countries  will  contribute  in  the  same  way  that 
European  consumption  does.  EU  development  policy,  as  well  as  other  EU  policies  such  as 
research and energy and the clean development mechanism under the Kyoto Protocol, offers a 
number of instruments that can be used. 

The  positive  and  negative  impacts  of  cash  crops  for  biofuels  on  food  production  and  food 
security have been the subject of extensive discussion. The costs and benefits depend on the 
site,  the  way  the  crop  is  produced  and  how  it  is  integrated  in  the  local  production  system. 
There  is  no  general  rule.  Sugar  cane  has  almost  always  been  cultivated  as  a  cash  crop  in 
developing countries, and a switch in the end-product from sugar to ethanol should not affect 
the  food  supply  of  the  region.  Some  biofuel  raw  materials  like  jatropha  could  allow  the 
sustainable  use  of  low-value  land  and,  in  the  process,  contribute  (via  earnings)  to  an 
improvement in food security. 

EN 

41 

   EN 

 
ANNEX 12 – The Commission’s perspective on biomass and biofuel research 

1. 

Introduction 

Research, technological development and demonstration have potential to support the use of 
biomass.  The  Commission  intends  to  capitalise  on  this.  Its  proposal  for  the  Seventh 
Framework  Programme  –  Specific  Programmes,  adopted  in  September  2005,  gives  a  high 
priority to biomass. 

An  industry-led  European  biofuel  technology  platform  is  under  development54.  This  is 
intended  to  develop  and  implement  a  European  vision  and  strategy  for  the  production  of 
biofuels, in particular for transport. Once the technology platform is established, the EC will 
explore the need to propose a possible joint technology initiative in this area55. 

Other technology platforms will also play an important role – for example, those dealing with 
transport”  and  “Forest-
“Industrial  biotechnology”,  “Plants  for 
basedsectors”. Under the framework of the Seventh Framework Programme, there is a need 
for  increased  coverage  of  the  following  topics:  biomass  availability  and  logistics  ;  energy 
crops for the production of biomass56; and combustion, gasification and pyrolysis of biomass 
covering co-firing, recovered fuels and combined heat and power. 

the  future”,  “Road 

This research and development activity under the Seventh RTD Framework Programme will 
be  complemented  by  non-research  action  in  the  “Intelligent  Energy  –  Europe”  programme. 
The main focus here is to support soft measures and to remove non-technological barriers to 
the widespread market deployment of already demonstrated biomass and biofuel technologies. 

2. 

Research priorities – biomass in general 

The following actions related to biomass, with their corresponding objectives, are included in 
the Seventh Framework Programme. 

- Biomass for electricity, heating and cooling 

The objective is to develop and demonstrate a portfolio of technologies for electricity, heating 
and cooling from biomass, including the biodegradable fraction of waste. This research aims 
at  increasing  overall  conversion  efficiency,  achieving  cost  reductions,  further  reducing  the 
environmental  impact  and  optimising  the  technologies  in  different  regional  conditions.  A 
broad  range  of  research  topics  are  considered  including  biomass  availability  and  logistics; 
conversion technologies, such as combustion, co-firing and gasification; emission abatement; 
and land use. 

54 
55 

56 

Technology platforms are channels to involve industries in defining research priorities. 
Joint technology initiatives are a new way to create public-private partnerships at European level. They 
have their foundation in technology platforms. They may take the form of a joint undertaking. 
With emphasis on woody crops (short-rotation coppice, grasses and miscanthus); on new crop breeds 
and  novel  cropping  systems  optimised  for  non-food  use;  on  improving  the  energy  content  of  the 
agricultural  crops  used  for  first-generation  biofuels;  and  on  machines  and  techniques  for  planting, 
harvesting, storage, transport, pre-treatment and conversion into material that can be fed into conveyor 
systems. 

EN 

42 

   EN 

 
                                                 
The Commission will propose to the “Zero Emission Power Generation” technology platform 
that co-firing be included in its scope. 

- Smart energy networks 

To facilitate the transition to a more sustainable energy system, a wide-ranging R&D effort is 
required  on  the  EU  electricity  and  gas  systems  and  networks.  Research  aims  at  effective 
integration  of  biomass  installations  into  electricity  grids  and  feeding  biogas  and  synthetic 
natural gas into the natural gas grid. 

- Life sciences and biotechnology for sustainable non-food products and processes 

The  objective  is  to  strengthen  the  knowledge  base  and  develop  advanced  technologies  for 
terrestrial  or  marine  biomass  production  for  energy  and  industry.  Biotechnology  will  be 
applied to improve the productivity, sustainability and composition of biomass raw materials 
and to develop new bio-processes. 

The Commission also attaches high importance to the “biorefinery” concept to maximise the 
value derived from biomass feedstocks by making full use of their components. Biorefineries 
could  be  built  up  by  adding  further  fractionation  and  conversion  steps  to  current  biomass 
processing  facilities  (sugar,  grain,  pulp  mills,  oil  refineries,  etc.)  to  obtain  a  broad  range  of 
products  such  as  food,  feed,  sustainable  polymers,  chemicals,  fuels,  and  heat  and  power. 
Improving the cost-efficiency of biofuels through the biorefinery concept will be an important 
element of the biofuel technology platform. 

3. 

Second-generation biofuels: state of play 

Producing  bioethanol  from  cellulose  delivers  a  gasoline  substitute  which  is  identical  to 
bioethanol produced from sugar or cereals. Synthetic enzymes provide the key to unlock the 
cellulose  molecules  and  break  them  down  into  simpler  substances,  which  are  subsequently 
fermented  to  ethanol  and  purified  (distilled)  the  same  way  as  conventional  bioethanol.  It  is 
hoped that energy balances and, hence, CO2 emission reductions will be largely enhanced.  

The  first  demonstration  plant  was  taken  in  operation  by  Iogen  (4  million  litres  per  year  in 
Canada) and this was followed by ETEK (150 thousand litres per year pilot plant in Sweden) 
which was supported by EU regional funds. A third facility is under construction by Abengoa 
(5  million  litres  per  year  in  Spain)  and  this  plant  is  supported  by  the  Fifth  Framework 
Programme. Enzymatic hydrolysis is expected to become competitive in the medium term due 
to the decreasing price of the enzymes and low cost of the raw material (such as straw or even 
wood); being one of the most critical parameters in the overall cost of the biofuel. 

Second-generation  biodiesel  is  chemically  different  from  vegetable-oil-based  biodiesel. 
Gasification of biomass (anything works, but the drier the better) produces a “synthesis gas” 
consisting  mainly  of  carbon  monoxide  (CO)  and  hydrogen.  Exposing  this  gas  to  a  suitable 
catalyst converts it into hydrocarbons (Fischer Tropsch synthesis), which will subsequently be 
treated to  deliver a mixture of gasoline, jet fuel and diesel.  Because  of the high price of  jet 
fuel,  the  excellent  quality  of  the  diesel  fraction  and  the  low  quality  of  the  gasoline  fraction 
(low  octane  number),  the  process  is  normally  optimised  towards  the  production  of  jet 
fuel/diesel. 

EN 

43 

   EN 

 
The  different  steps  in  the  process  have  all  been  demonstrated  to  work  commercially  for 
Fischer Tropsch synthesis gas derived from coal or natural gas. Optimisation still remains to 
be  done  on  gasification  of  biomass  from  different  raw  materials  and  gas  purification  to 
synthesis gas quality. A large-scale pilot plant (15 000 t/year) is being constructed in Freiberg 
(Germany)  by  the  company  Choren.  In  addition,  Choren  and  Shell  are  in  the  process  of 
developing  a  full-size  prototype  commercial  plant  with  a  capacity  of  200 000  t/year  which 
optimistically,  depending  on  the  experience  with  the  pilot  plant,  could  be  operational  in 
2009/10.  In  parallel  to  the  experience  to  be  gained  from  this  “biomass-to-liquid”  (BTL) 
process,  a  number  of  large-scale  “gas-to-liquid”  projects,  several  in  Qatar,  will  deliver 
technology  experience  on  the  second  stage  (Fischer  Tropsch)  of  the  process  in  the  years 
ahead. 

Alternatively the synthesis gas can be converted to bio-dimethylether (DME), which can also 
be  used  to  replace  diesel  in  modified  diesel  engines.  DME,  a  gaseous  fuel  under  ambient 
conditions, can be of particular relevance in heavy-duty applications. 

The  advantage  of  second-generation  biodiesel  is  partly  that  the  basic  treatment  of  the  raw 
material  (gasification)  allows  virtually  any  organic  material  to  be  used  and  partly  that  it 
delivers a premium-quality diesel fuel, whether to be used in its own right or as a blending 
component in petroleum-based diesel. Its CO2 emission profile depends on whether the energy 
source  for  conversion  is  biomass  only  or  whether  an  external  energy  source  is  used,  and 
whether the biomass is a waste  product (e.g. straw) or an energy crop. This also affects the 
cost. Here too, significant CO2 gains and energy balance improvements are hoped for. 

Hybrids  between  first-  and  second-generation  biofuels  are  also  in  preparation.  Fortum 
(Finland) is planning to expand its Porvoo refinery to use vegetable oil and animal fat as a raw 
material in a conventional hydrogenation process. This delivers the same high-quality diesel 
as BTL with lower investment, but higher raw material costs (close to conventional biodiesel). 

4. 

Research priorities - transport biofuels 

The main area of research is second-generation biofuels made from various biomass resources 
and wastes, e.g. bioethanol, biodiesel, DME. The technical feasibility of converting cellulose 
material  (straw/wood)  and  organic  wastes  into  bioethanol  and  biodiesel  has  been 
demonstrated.  But  costs  need  to  be  brought  down  and  technology  needs  to  be  further 
developed and demonstrated for commercial-scale production (over 150 000 tonnes a year). If 
this can be done, second-generation biofuels should offer three major advantages: 

•  they will secure a higher market share for biofuels by allowing the use of a wider range of 

raw material;  

•  the  cultivation  process  (if  any)  could  be  less  environmentally  intensive  than  for  ordinary 

agricultural crops;  

•  this lower intensity will be reflected in lower greenhouse gas emissions from cultivation.  

Second-generation  biodiesel  production  has  a  fourth  advantage:  the  fuel  is  of  better  quality 
than conventional diesel57.  

57 

The process can also be used to produce a (good) substitute for jet fuel or a (poor) substitute for petrol. 

EN 

44 

   EN 

 
                                                 
The price of these fuels will depend on technical developments and the price at which the raw 
material  can  be  obtained.  At  this  stage  there  is  no  reason  to  assume  that  they  will  be 
substantially cheaper than first-generation biofuels. 

The  Commission  plans  to  substantially  increase  its  support  for  the  development  of  second-
generation biofuels through its research budgets. 

EN 

45 

   EN 

 
ANNEX 13 – Results of consultation 

This Communication and the impact assessment published alongside it take into account the 
results of extensive consultations. These began with the Commission’s analysis of the various 
policies  affecting  biomass  and  an  extensive  public  consultation  campaign  using  all  possible 
means, such as a public questionnaire via the Internet, numerous meetings with stakeholders, 
and  bilateral  meetings  with  Member  States  that  have  developed  national  Biomass  Action 
Plans and with biomass experts.  

The  main  conclusion  drawn  from  the  consultations  was  that  the  Commission  should  push 
strongly on all fronts, at EU level and national level, in order to overcome the non-technical 
barriers facing biomass.  

Several more specific conclusions can be drawn from the consultation process: 

•  Sufficient biomass resources are available in the Union to meet the needs for an additional 
80  mtoe  per  year  by  2010  without  major  effects  on  forest  products  industries  and  food 
production.  Energy  crops  can  make  a  significant  contribution  while  providing  a  new 
market outlet for agriculture and contributing to rural development. Any shortfalls can be 
addressed by imports. 

•  There  are  competitive,  reliable  and  efficient  European  technologies  to  convert  biomass 
resources  into  energy  vectors  (electricity,  heating  or  cooling  and  biofuels  for  transport). 
Nevertheless, RTD work on biomass (supported by appropriate national and EC funds) has 
to be intensified in order to meet new challenges. 

•  European  (as  well  as  international)  solid  and  liquid  biofuels  markets  are  in  their  infancy 
and  have  to  be  developed  further  to  commodity  level.  In  order  to  develop  them 
successfully, work on standards and norms has to be accelerated. 

•  Biomass  is  generally  more  expensive  than  comparable  fossil  fuel  energy.  However,  in 
some  areas  (such  as  household  heating  by  pellets  and  industrial  CHP  based  on  residues) 
biomass is already competitive. 

•  There  is  an  urgent  need  to  start  a  professionally  managed  campaign  to  inform  European 
citizens more fully about the benefits of biomass. This information barrier, as well as the 
absence of more effective representation of biomass at all levels, is also due to the lack of a 
strong European biomass association with industrial involvement. 

•  The  main  problem  that  appears  to  be  holding  back  the  penetration  of  biomass  on  the 
energy  markets  is  the  lack  of  demand.  The  only  way  to  increase  demand  is  through 
appropriate policies implemented at national level. 

•  Biomass  is  the  only  renewable  energy  source  that  does  not  suffer  from  intermittency 
problems and can potentially provide energy for heat, power and transport from the same 
installation.  

•  Biomass  in  the  form  of  solid,  liquid  or  gaseous  biofuels  is  the  only  renewable  energy 
source  that  can  directly  replace  solid,  liquid  and  gaseous  fossil  fuels,  either  fully  or  in 
blends  of  various  percentages,  in  which  case  often  there  is  no  need  for  equipment 
modifications.  

EN 

46 

   EN 

 
•  Biomass  is  the  only  renewable  energy  source  that  cannot  be  found  free;  it  necessitates  a 
long  chain  of  activities  such  as  planting,  growing,  harvesting,  pre-treatment  (storage  and 
drying)  and  upgrading  to  a  fuel  and,  finally,  mechanical,  thermochemical  or  biological 
conversion  into  an  energy  carrier  (power,  heat  or  biofuels  for  transport).  Therefore, 
biofuels (with the exception of untreated municipal waste) always have an associated cost 
that has to be borne by the final user.  

•  Since land availability is limited there could come a point in the future when biomass for 
energy  will  have  to  compete  with  food,  materials,  bio-chemicals  and  carbon  sinks. 
However,  this  point  in  time  is  beyond  2020,  and  if  international  trade  in  biomass  fuels 
becomes effective could lie beyond 2050.  

•  Environmental  concerns  must  also  be  addressed  whenever  biomass  is  grown  for  food, 
products  or  fuels.  This  has  to  be  done  by  taking  an  overall  systems  approach  and  by 
comparisons with other alternatives and not in isolation. 

EN 

47 

   EN