Biofuels in the European Union : an agricultural perspective.
Date: 2007-02-28
Institutions: Directorate-General for Agriculture and Rural Development
Subjects: common agricultural policy, energy crop, energy policy, energy production, energy research, research and development, substitute fuel

Fact Sheet

European Commission

BIOFUE LS  IN  TH E  EURO PE AN 
UNION:  AN  AG RICULTUR AL 
PE RSPEC TIVE

1

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C o n t e n t s

I n t r o d u c t i o n  

1 .   B i o f u e l s   –   t h e   o v e r a l l   c o n t e x t  

2 .   B i o f u e l s   t e c h n o l o g i e s  

3 .   P r o d u c t i o n   a n d   c o n s u m p t i o n 

o f   b i o f u e l s  

4 .   B i o f u e l s   t r a d e  

5 .   T h e   E U   r e g u l a t o r y   e n v i r o n m e n t 
f o r   b i o f u e l s   –   h o w   d e m a n d   i s 
s h a p e d   b y   p o l i c y   t o o l s  

3

4

6

8

1 2

1 3

6 .   A g r i c u l t u r a l   m e a s u r e s   i n   p l a c e  

1 5

7 .   T h e   r e s e a r c h   a n d   d e v e l o p m e n t 

e f f o r t   a t   E U   l e v e l  

8 .   T h e   E U   S t r a t e g y   f o r   B i o f u e l s   – 
t h e   m o s t   r e c e n t   i n i t i a t i v e  

9 .   T h e   n e x t   s t e p s  

1 0 .   U s e f u l   s i t e s   f o r   f u r t h e r 

i n f o r m a t i o n  

1 6

1 7

1 9

1 9

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I n t r o d u c t i o n

The  European  Union  (EU),  in  common  with  the  rest  of 
the  world,  must  adapt  to  the  challenges  posed  by  cli-
mate  change  and  other  environmental  issues,  and  over-
dependence on fossil fuel. Faced with the need to reduce 
greenhouse gas emissions, while at the same time seeking 
to diversify sources of energy, the EU is re-examining how 
agriculture can contribute to meeting these challenges.

In the EU, transport is responsible for almost one quarter 
of  greenhouse  gas  emissions.  It  is  therefore  essential  to 
find ways of reducing emissions from transport. Nearly all 
the  energy  used  for  transport  comes  from  oil,  for  which 
the EU is heavily dependent on imports. Biofuels provide 
the  best  option  in  the  short  to  medium  term  to  replace 
a  significant  share  of  fossil  fuels.  Biofuels  are  processed 
from  biomass,  a  renewable  resource,  and  can  be  readily 
integrated into fuel supply systems.

This  fact  sheet  describes  how  agriculture  can  play  a  role 
in helping to provide more renewable energy, specifically 
via the use of biofuels. The EU has a significant potential 
for the production of biofuels. The fact sheet also outlines 
the crucial role of EU policies in shaping the future devel-
opment and use of renewable energy. EU and individual 
Member  States’  regulatory  and  other  measures  play  a 
key role in determining the level of demand for biofuels. 
Without clear policies to address demand it is difficult for 
fledgling  biofuel  technologies  to  move  from  the  experi-
mental phase to pilot and then full production status.

EU  policies  are  key  to  building  sufficient  critical  mass  in 
biofuels,  and  to  buying  time  for  a  second  generation  of 
biofuels to join the first generation in the fuels market.

3

“There  has  never  been  a  better  moment  to  push 
the  case  for  biofuels.  Crude  oil  prices  remain  high. 
We  face  stringent  targets  under  the  Kyoto  Protocol. 
And  the  recent  controversy  over  imports  of  Russian 
gas  has  underlined  the  importance  of  increasing 
Europe’s  energy  self-sufficiency.  Raw  materials  for 
biofuel production also provide a potential new out-
let for Europe’s farmers, who have been freed by CAP 
reform to become true entrepreneurs.”

Mariann Fischer Boel, Commissioner for 
Agriculture and Rural Development, 
8 February 2006

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1 .   B i o f u e l s   –   t h e   o v e r a l l 

c o n t e x t

The  EU  is  at  the  forefront  of  international  efforts  to 
combat  climate  change  and  has  played  a  key  role  in 
the development of the two major treaties addressing 
the issue, the United Nations Framework Convention 
on  Climate  Change  and  its  Kyoto  Protocol 1.  Biofuels 
are just one element in the complex strategic debate 
over  how  to  meet  the  world’s  future  energy  needs. 
Given  that  economic,  environmental  and  political 
issues are trans-national in character, it is natural that 
the  EU  should  develop  policies  that  address  these 
issues on behalf of all 25 Member States.

a)  EU policy for renewable energy

The development of renewable energy – particularly en -
ergy  from  wind,  water,  solar  power  and  biomass  –  is  a 
central  aim  of  the  EU‘s  energy  policy.  There  are  several 
reasons for this:

•

•

•

Renewable  energy  has  an  important  role  to  play  in  re -
ducing Carbon Dioxide (CO2) and other greenhouse gas 
emissions – a major EU objective
Increasing the share of renewable energy in the energy 
balance enhances sustainability. It also helps to improve 
the security of energy supply by reducing the EU‘s grow-
ing dependence on imported energy sources
In the medium to long term, renewable energy sources 
are  expected  to  be  able  to  compete  economically  with 
more conventional energy sources

Several  of  the  technologies,  especially  energy  from  bio-
mass, but also wind energy, small-scale hydro power, and 
solar thermal applications, can be economically viable and 
competitive.  But  they  depend  on  how  rapidly  increasing 
demand  and  production  volumes  can  bring  about  the 
economies  of  scale  necessary  for  competitiveness  with 
existing large-scale energy generation systems.

The European Commission‘s White Paper for a Community 
Strategy  ‘Energy  for  the  future:  Renewable  Sources  of 
Energy’ 2 sets out a strategy to double the share of renew-
able  energies  in  gross  domestic  energy  consumption  in 
the EU by 2010 (from the present 6 % to 12 %), including an 
Action Plan with a timetable for achieving this objective.

Breakdown  of  Energy  Consumption 
in  the  EU-25  in  2002  (source  Eurostat)

Gas 
23,09 %

Nuclear
14,77 %

5,45 %

Oil 
38,02 %

Coal
18,45 %

Solar 1 %

Wind 3 %
Geothermal 3 %

Hydro 27 %

Biomass 65 %

b)  Biomass – a potential major 

source of energy

Biomass  is  by  far  the  most  important  renewable  energy 
resource. Around 4 % of the EU’s total energy consumption 
is met from biomass. In December 2005, the Commission 
published  a  Biomass  Action  Plan  with  the  objective  of 
increasing  the  use  of  energy  derived  from  forestry,  agri-
culture and waste materials. The plan also sets out a coor-

1  The 1997 Kyoto Protocol shares the objective, principles and institutions 
of The United Nations Framework Convention on Climate Change. It sig-
nificantly strengthens the Convention by committing ‘Annex I Parties’ to 
individual, legally-binding targets to limit or reduce their greenhouse gas 
emissions

2  COM (97) 599 final of 26.11.1997 - 

http://europa.eu.int/comm/energy/library/599fi_en.pdf

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dinated programme for EU action, including measures to 
improve the supply of and demand for biomass, to over-
come technical barriers, and to develop research.

c)  The climate change challenge for the 

transport sector

In  the  EU  transport  is  responsible  for  an  estimated  21 % 
of all greenhouse gas (GHG) emissions that contribute to 
climate change. This percentage continues to rise as does 
energy  demand  for  transport.  In  order  to  meet  sustain-
ability goals, in particular the reduction of GHG emissions 
agreed under the Kyoto Protocol, it is therefore essential 
to find ways of reducing emissions from transport. Vehicle 
manufacturers are developing new models that are clean-
er and more fuel efficient. The use of biofuels can also play 
a role in addressing this objective.

d) Energy dependency

Nearly  all  the  energy  used  in  the  EU  transport  sector 
comes  from  oil.  It  has  been  estimated  that  fuel  demand 
for transport will continue to increase up to 20303. Existing 
oil reserves are limited in quantity and restricted to a few 
world  regions.  New  reserves  exist,  but  will  generally  be 
more difficult to exploit. Securing energy supplies for the 
future is not only a question of reducing import depend-
ency, but calls for a wide range of policy initiatives, includ-
ing diversification of sources and technologies.

Glossar y

Biomass
Biomass  includes  non-food  products  which  are  used 
for  various  purposes.  It  has  an  important  role  to  play 
as  a  feedstock  material  for  renewable  energy  genera-
tion, whether for electricity, heating and cooling or for 
transport fuels. Biomass includes a wide range of prod-
ucts, by-products and waste streams from forestry and 
agriculture  as  well  as  municipal  and  industrial  waste 
streams.  It  thus  includes  trees,  arable  crops,  algae  and 
other  plants,  agricultural  and  forest  residues,  effluents, 
sewage sludge, manure, industrial by-products and the 
organic fraction of municipal solid waste. After a conver-
sion process, the biomass can be used to provide heat, 
electricity  or  transport  fuel,  depending  on  the  conver-
sion technology and the type of primary biomass.

Bio-energy
Bio-energy is the energy derived from biomass, includ-
ing  biofuels.  Biomass  materials  include  wood,  agri-
cultural  crops,  forestry  and  agricultural  residues  and 
organic waste.

Biofuels
Biofuels  are  fuels  produced  from  biomass,  mainly  of 
agricultural origin. The term commonly applies to liquid 
transport  fuels,  but  is  also  used  for  gas  and  solid  fuels 
such as wood pellets and chips.

At  present,  three  biofuels  account  for  almost  all  con-
sumption in the transport sector world-wide:

•

•

•

Bioethanol, mainly produced by fermentation of cere-
als, starch and sugar crops, is currently the world’s main 
biofuel. However, the most frequent use of ethanol in 
the  EU  at  present  is  through  conversion  into  deriva-
tives, such as ETBE (ethyl tertiary butyl ether composed 
of a mixture of ethanol and fossil fuels)
Biodiesel produced from oilseeds crops and other raw 
materials,  which  until  recently  was  produced  almost 
solely  in  the  EU,  is  now  gaining  a  foothold  in  other 
regions across the world
Biogas production, from energy crops and organic wastes, 
is another available option that is (so far) less developed

Energy crops
Energy  crops  are  those  annual  and  perennial  species 
that  are  specifically  cultivated  to  produce  solid,  liquid 
or  gaseous  forms  of  energy,  including  biofuels.  These 
are mainly: oilseeds crops (rape, soya, sunflower), cere-
als (wheat, barley, maize, rye), sugar beet, and perennial 
crops (miscanthus, short rotation coppice, eucalyptus). 

A  full  glossary  of  biofuels  terms  can  be  found  in  the 
Commission’s Communication ‘An EU strategy for biofu-
els’ of February 2006 4.

3  Study “Energy and transport: outlook to 2030”, European Commission, 

4  See: http://ec.europa.eu/comm/agriculture/biomass/biofuel/com2006_

DG Transport and Energy, 2003.

34_en.pdf, Annex 1

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The central importance of energy policy in helping the 
EU meet the challenges of globalisation was confirmed 
by EU heads of state and government at their ‘Summit’ 
meeting  in  March  2006,  where  the  Commission  pre-
sented  proposals  for  the  development  of  a  reinvigor-
ated  Energy  Policy  for  Europe.  In  its  conclusions  the 
Presidency of the Council identified three main objec-
tives:

•
•

•

To increase security of supply
To  ensure  the  competitiveness  of  EU  economies  and 
the affordability of energy supply in a stable regula-
tory framework
To promote environmental sustainability.

In  this  context  target  consumption  shares  of  15 %  for 
renewable energies and 8 % for biofuels, by 2015, were 
suggested.

e)  Agricultural biomass and rural 

development

In addition to the objectives of finding more renewable 
sources of energy, and of reducing dependence on fos-
sil fuels, the development of biofuels from agricultural 
biomass  could  offer  to  the  agricultural  sector,  and  to 
rural  areas  more  widely,  much  needed  opportunities 
for  diversification  and  job  creation.  This  is  consistent 
with  the  EU’s  ‘Lisbon  Strategy’,  which  aims  to  provide 
the  EU’s  citizens  with  better  opportunities  for  growth 
and  employment  in  an  environmentally  and  socially 
sustainable way.

Progress  in  agricultural  productivity,  changes  in  the 
Common Agricultural Policy (CAP), and increasing world 
competition,  mean  that  the  pattern  of  EU  agricultural 
production  will  have  to  adapt.  Bio-energy  production 
is an interesting new outlet for agricultural and forestry 
products which may help in this adaptation process.

2 .   B i o f u e l s   t e c h n o l o g i e s

Encouragement of the production of biofuels, wheth-
er for environmental or strategic reasons, is a dynamic 
process.  Until  now  biofuels  have  been  produced  by 
processing agricultural crops using the available tech-
nologies.  The  challenge  is  to  produce  biofuels  from 
diversified  raw  materials  by  using  innovative  proc-
esses and technologies that are commercially viable. 
This includes the short-term improvement of existing 
technologies and the development of more advanced 
biofuels,  for  which  the  environmental  and  economic 
gains are expected to be even more positive.

a)  First-generation biofuels

First-generation  biofuels  can  be  used  in  low-percent-
age  blends  with  conventional  fuels  in  most  vehicles  and 
can  be  distributed  through  existing  infrastructure.  Some 
diesel vehicles can run on 100 % biodiesel, and ‘flex-fuel’ 
vehicles5  are  already  available  in  many  countries  around 
the world. Replacing a percentage of diesel or petrol with 
biofuels  is  therefore  the  simplest  way  for  the  transport 
sector  to  make  an  immediate  contribution  to  the  Kyoto 
targets,  particularly  given  that  the  benefits  can  apply  to 
entire vehicle fleets.

5  Cars that run on either gasoline or ethanol

6

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Developing  a  substitute  for  diesel  has  been  of  particular 
importance  in  the  European  context,  given  that  the  EU 
is  currently  a  net  importer  of  diesel  but  an  exporter  of 
petrol.  However,  even  using  the  most  modern  technolo-
gies, the cost of EU-produced biofuels makes it difficult for 
them to compete economically with fossil fuels.

Nevertheless,  encouraging  the  use  of  currently  available 
biofuels  may  be  seen  as  an  intermediate  step  to  reduce 
greenhouse  gas  emissions,  diversify  transport  energy 
sources, and to prepare the EU economy for other alterna-
tives in the transport sector which are not yet ready.

By  actively  embracing  the  global  trend  towards  biofuels 
and by ensuring their sustainable production, the EU can 
exploit  and  export  its  experience  and  knowledge,  while 
engaging in research to ensure that we remain in the van-
guard of technical developments. A clear strategy for the 
EU will also be to promote lower production costs.

The  construction  of  plants  to  produce  alternative  fuels 
from  diversified  raw  materials,  the  introduction  of  new 
engine  types  and  the  adaptation  of  the  fuel  distribution 
system  entail  long-term  investments  which  need  stable 
prospects for market demand.

b) Second-generation biofuels and beyond

Advanced  conversion  technologies  are  needed  for  a 
second  generation  of  biofuels.  The  second  generation 
technologies will use a wider range of biomass resources 
– agriculture, forestry and waste materials – and will help 
to  achieve  significant  reductions  in  GHG  emissions  and 
the costs of fuel production. 

One  of  the  most  promising  second-generation  biofuel 
technologies  –  ligno-cellulosic  processing  (e. g.  from  for-
est  materials)  –  is  already  well  advanced.  Pilot  plants 
have  been  established  in  the  EU,  in  Denmark,  Spain  and 
Sweden. Other technologies to convert biomass to liquid 
biofuels  (BtL)  include  Fischer-Tropsch  biodiesel  and  bio-
DME (dimethyl ether). Demonstration plants are in opera-
tion in Germany and Sweden.

The  CARS  21  High  Level  Group6  has  identified  second-
generation  biofuels  as  particularly  promising  and  has 
recommended  that  their  development  should  be  given 
substantial support.

To  prepare  for  the  large-scale  use  of  cost-competitive 
biofuels, continued research and development is needed 
to  make  the  new  technologies  successful.  The  European 
Biofuels Technology Platform7 and other technology plat-
forms can play a vital role in achieving this.

Development will be monitored at EU level with the aim 
of  providing  support  at  the  appropriate  time  for  the 
upgrading of demonstration projects to commercial scale 
operations.  At  the  same  time,  guarantees  must  be  given 
as to the environmental benefits of all new processes and 
any non-technical barriers to their acceptance will have to 
be removed.

6  See: http://europa.eu.int/comm/enterprise/automotive/pagesback-

ground/competitiveness/cars21.htm

7  See: http://cordis.europa.eu.int/technology-platforms/home_en.html

7

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.

V

.

e
P
O
F
U
©

3 .   P r o d u c t i o n   a n d   c o n -
s u m p t i o n   o f   b i o f u e l s

The latest data on the EU biofuels market are present-
ed here. The market is developing fast, therefore these 
statistics may quickly become outdated. Nevertheless, 
they show the extent of production and use of biofu-
els, and the speed at which the market is expanding.

a)  The biofuels market in the 

European Union

EU production of biofuels was 3.9 million tonnes in 20058 
with  bioethanol  accounting  for  0.7 million  tonnes  and 
biodiesel for 3.2 million tonnes. This represented less than 
1 %  of  EU  petrol  and  diesel  consumption.  Total  produc-
tion  in  2005  increased  by  over  60 %  compared  with  the 
previous year, in which 2.4 million tonnes of biofuels were 
produced 9 (1.9 million tonnes of biodiesel and 0.5 million 
tonnes of bioethanol).

The latest years, the EU has notably increased its produc-
tion of biofuels, in particular of biodiesel, the most impor-
tant biofuel produced in the EU.

In  2005  the  total  area  used  for  energy  crop  production 
was  around  2.8 million  hectares  (0.9 million  hectares  on 
set-aside,  nearly  0.6 million  hectares  under  the  energy 
crops regime – see section 6 – and approximately 1.3 mil-

Trends  in  the  EU  produc tion  of  biofuels  (in  1 000  tonnes)

3 500

3 000

2 500

2 000

1 500

1 000

500

0

1 134

388

2002

1 504

425

2003

1 933

491

2004

3 184

730

2005

Bioethanol

Biodiesel

8  According to estimates provided by the European Biodiesel Board (EBB), 

the European Union of Ethanol Producers (UEPA) and the European 
Bioethanol Fuel Association (eBIO)

9  According to EurObserv’ER (Observatoire des énergies renouvelables), 

“Le baromètre des biocarburants” (See : http://europa.eu.int/comm/ener-
gy/res/sectors/bioenergy_publications_en.htm)

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lion hectares without any specific support regime10), rep-
resenting about 3 % of total EU-25 arable land.

EU  produc tion  of  biofuels 
(1 000  tonnes) 12

Biodiesel

Bioethanol

EU  production  of  bioethanol  is  estimated  to  have  used 
around 1.2 million tonnes of cereals and 1 million tonnes 
of  sugar  beet  in  2004  as  raw  materials.  This  represented 
0.4 %  of  total  EU-25  cereals  and  0.8 %  of  sugar  beet 
production.  Apart  from  France,  where  three-quarters  of 
bioethanol  is  obtained  from  sugarbeet,  the  majority  of 
EU  plants  process  grains  (mainly  maize,  wheat  and  bar-
ley).  The  leading  EU  producers  of  bioethanol  are  Spain, 
Germany,  Sweden,  and  France.  The  leading  consumer  is 
Sweden, which takes about 80 % of the quantities import-
ed, mostly from Brazil.

EU biodiesel production is estimated to have used 4.1 mil-
lion tonnes of rapeseed in 2004, nearly 40 % of EU-25 rape-
seed production. This year, it is expected that near 60 % of 
the rapeseed oil will be used for production of biodiesel 
and, to a lesser extent, directly as refined rapeseed oil for 
fuel. The EU is the world’s leading region for the produc-
tion  and  consumption  of  biodiesel.  Germany  is  the  EU’s 
main  producer,  followed  by  France,  Italy,  and  the  Czech 
Republic.

Biofuels  production  capacity  in  the  EU  is  developing 
strongly  as  a  consequence  of  commitments  undertaken 
by  Member  States  (see  figure  1  ‘National  indicative  tar-
gets  for  biofuels  market  share  in  EU  Member  States’). 
Production  capacity  is  estimated  at  1.7 million  tonnes  of 
bioethanol by the end of 2006 and, with new investments 
announced, this capacity is likely to treble by the end of 
2008. The expected capacity in 2006 will need to process 
about 3.7 million tonnes of cereals and just over 5 million 
tonnes of sugarbeet. According to data from the European 
industry, biodiesel production capacity may reach six mil-
lion tonnes in 2006 and 8 million tonnes in 2007. In 2006, 
it is expected that 58 % of EU rapeseed oil will be used for 
production of biodiesel11.

10  This is an estimate as the areas dedicated to biofuels crops outside the 

existing support schemes are not recorded at present

11  Oil World, 21 April 2006.
12  The data are expressed in thousands of tonnes (1 tonne = 1 250 litres)

Germany

France

Italy

Austria

Spain

Denmark

UK

Sweden

Finland

Czech 
Republic

Slovakia

Hungary

Lithuania

Poland

Slovenia

Estonia

Latvia

The Nederlands

Greece

Malta

Cyprus

Belgium

Portugal

Wine intervention 
stocks*

2005

1 669

492

396

2004

1 035

348

320

85

73

71

51

1

-

133

78

-

7

100

8

7

5

-

3

2

1

1

1

-

57

13

70

9

1.4

-

60

15

-

5

-

-

-

-

-

-

-

-

-

-

-

2005

2004

135

115

6

-

20

102

-

-

243

194

-

-

123

10

-

-

28

6

51

-

-

10

6

-

-

-

-

-

-

-

-

52

-

-

-

-

-

36

-

-

-

-

-

-

-

-

-

87

491

EU-25

3 184

1 933.4

730

Sources: EBB (biodiesel), EurObserv’ER 2005 (bioethanol 2004), eBIO 
(bioethanol estimations for 2005).

* In 2005, the production based on wine intervention stocks purchases 
(about 185.000 tonnes) is included in the production of each country. 

Data  from  2005  show  that  consumption  of  biofuels  var-
ies  significantly  between  Member  States.  Sweden  is  the 
most important consumer of biofuels (2.3 % of diesel and 
petrol  used),  followed  by  Germany,  the  Czech  Republic 
and France, all above the EU average of 0.6 % of total fuel 
use  (see  figure  1  –  ‘Share  of  biofuels  consumption  in  EU 
Member States’).

9

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Share  of  biofuels  consumption  in  EU  Member  States,  2004  (%  energy  content) 13 

1.7

2.3

1.0

0.7

0.6

0.5

0.4

0.3

0.2

Sweden

Germany

Czech Republic

France

EU

Italy

Spain

Poland

Slovakia

Finland

Malta

Latvia

Austria

Slovenia

UK

Lithuania

0.1

0.1

0.1

0.1

0.1

0.0

0.0

The Netherlands

0.0

Ireland

Portugal

Luxembourg

Hungary

Greece

Estonia

Denmark

Cyprus

Belgium

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.5

1.0

1.5

2.0

2.5

b) World biofuels production

Bioethanol  is  currently  the  world’s  leading  biofuel. 
Biodiesel, until recently only produced in significant quan-
tities in the EU, is now gaining a foothold in several parts 
of  the  world.  Biogas  comes  third  and  has  so  far  made  a 
breakthrough only in Sweden. In 2005 world production 
of bioethanol for fuel use was approximately 26.9 million 
tonnes.  This  represents  around  2 %  of  global  petrol  use. 
Production  is  set  to  increase  by  around  15 %  in  2006  to 
reach 31 million tonnes.

Brazil is the world’s leading producer of bioethanol, with 
nearly 13 million tonnes produced, followed by the United 
States with 11.8 million tonnes of production. Brazil’s sug-
arcane area is constantly being extended in order to meet 

growing domestic and export demand. With around one 
million  flex-fuel  cars  expected  to  be  on  Brazil’s  roads  by 
the end of 2005, the availability of bioethanol for export 
could  be  reduced,  at  least  in  the  short  term.  In  the  US 
bioethanol output is expanding at an unprecedented rate 
and is expected to match that of Brazil in 2006.

In  Asia,  Thailand  is  building  over  a  dozen  ethanol  plants 
which  use  sugar  cane  and  rice  husks  as  their  feedstock. 
Thailand‘s  ethanol  production  capacity  could  rise  to 
1.5 million  tonnes  per  year.  Pakistan,  the  world’s  largest 
exporter of molasses, is launching a domestic bioethanol 

13  The sources are National reports under the Biofuels Directive, except 
Greece, Italy, and Lithuania in which cases total fuel consumption is 
based on reporting for Fuel Quality Monitoring, and total biofuels con-
sumption based on Biomass Action Plan data

10

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In  countries  where  a  large-scale  expansion  of  feedstock 
production  is  likely  to  take  place,  there  may  be  environ-
mental  concerns  related  to  pressures  on  eco-sensitive 
areas  such  as  rainforests.  There  may  also  be  concerns 
regarding the effects on soil fertility, water availability and 
quality,  and  the  use  of  pesticides.  These  concerns  need 
specific investigation and quantification and, if necessary, 
should  be  addressed.  EU  development  policy  will  aim 
to  help  some  developing  countries  capture  the  benefits 
offered by biofuels, while addressing these concerns in an 
appropriate way.

Like  the  EU,  a  number  of  countries  have  set  short  and 
long-term  targets  for  the  percentage  or  quantity  of  bio-
fuels to be incorporated into conventional fuel. Measures 
to  encourage  biofuel  development  include:  tax  incen-
tives  such  as  waivers  of  excise  and/or  fuel  tax  (United 
States) making the fuel cheaper to buy than conventional 
petrol or diesel; and, grant and loan programmes for the 
construction of processing plants or the development of 
feedstock (Australia).

World  fuel  ethanol  produc tion
(1 000  tonnes)

Brazil

United States

Canada

European Union

Asia, of which 
China 
India 
Thailand

Australia

Colombia

World

2005

12 900

11 800

200

730

1 090
800
240
50

50

120

2004

11 700

10 300

200

491

885
800
80
5

32

-

26 890

23 608

Source: F.O. Licht’s, World ethanol and Biofuels Report, May 2006.

programme  to  absorb  some  of  its  estimated  400  000 
tonnes  production  capacity.  India  is  also  developing  its 
bioethanol  production  from  sugar  cane.  China’s  ethanol 
industry  comprises  over  200  production  facilities  in  11 
provinces,  capable  of  producing  more  than  10 million 
tonnes of ethanol each year. Several ACP14 sugar-produc-
ing countries plan to diversify into bioethanol, but wheth-
er many of them will be able to produce at sufficiently low 
cost to be competitive is uncertain. Nor is the potential for 
biofuel  production  limited  to  countries  that  grow  sugar 
cane. Nigeria is considering the use of cassava, of which it 
is the world’s leading producer. Other crops, such as sweet 
sorghum  (for  bioethanol)  and  jatropha  (for  biodiesel), 
require lower fertiliser input, are more resistant to drought 
and  can  be  grown  in  any  region  of  the  world.  However, 
yield volatility may reduce their long-term profitability.

14   African, Caribbean and Pacific states

.

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.

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4 .   B i o f u e l s   t r a d e

Biofuels  and  their  raw  materials  are  traded  on  world 
markets.  If  the  EU  is  to  meet  its  targets  for  the  use 
of  biofuels  as  a  percentage  share  of  the  overall  EU 
fossil  fuel  market,  some  imports  of  biofuels  may  be 
required.  So  trade  in  biofuels  will  be  important  in 
the short to medium term while domestic production 
of  biofuels  is  still  developing.  Over  the  longer  term, 
second generation biofuels should come ‘on stream’, 
improving the EU’s own biofuels production capacity.

a)  Biodiesel trade 

Biodiesel imports into the EU are subject to an ad valorem 
duty  of  6.5 %.  However,  there  is  no  significant  external 
trade, since the EU is by far the world’s biggest producer. 
Biodiesel generated from imported soya and palm oil can 
be  mixed  in  low  percentages  with  rapeseed  biodiesel, 
without  major  problems.  However,  for  technical  reasons 
(under  current  EU  specifications)  rapeseed  oil  is  a  more 
efficient raw material for biodiesel production.

b) Bioethanol trade 

Bioethanol is traded under several different tariff ‘codes’. 
Most  external  trade  of  bioethanol  has  taken  place  as 
‘denatured  and  undenatured  alcohol’15.  Such  alcohols,  if 
imported from developing countries, enjoy (in most cases) 
preferential treatment – imports totalled on average more 
than  2.5 million  hectolitres  per  year  from  2002  to  2004. 
But it is not possible to establish from trade data whether 
or not imported alcohol is used in the fuel ethanol sector 
in the EU. Increasing quantities of bioethanol are imported 
as  ‘bioethanol  blended  with  petrol’.  Bioethanol  is  also 
imported blended in ETBE.

12

The  main  countries  exporting  bioethanol  to  the  EU  are 
Brazil, Egypt, Guatemala, Pakistan, Ukraine and the United 
States. Some (e. g. Ukraine) enjoy reduced tariffs on these 
exports; others have duty-free access (e. g. Pakistan, Egypt). 
Over the 2002–2004 period approximately 70 % of imports 
were  traded  under  preferential  conditions  (almost  61 % 
were  duty-free,  while  9 %  benefited  from  some  type  of 
duty reduction). Those preferential trade terms are grant-
ed  mainly  to  poorer  developing  countries,  under  two 
regimes – the Generalised System of Preferences, includ-
ing,  inter  alia,  the  Everything  But  Arms  (EBA)  initiative16, 
and the Cotonou Agreement17.

15  Denatured alcohol – Ethyl alcohol to which a poisonous substance, such 
as acetone or methanol, has been added to make it unfit for consumption
16  See: http://europa.eu.int/comm/trade/issues/global/gsp/eba/index_en.htm
17  See: http://europa.eu.int/comm/development/body/cotonou/index_en.htm

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5 .   T h e   E U   r e g u l a t o r y   e n v i r o n m e n t   f o r 

b i o f u e l s   –   h o w   d e m a n d   i s   s h a p e d   b y 
p o l i c y   t o o l s

Under  present  price  parities  with  fossil  fuels,  addi-
tional  demand  for  biofuels  can  only  be  created  by 
policy  measures.  Development  of  production  thus 
depends  heavily  on  the  EU  and  national  actions  to 
support biofuels and on the setting of targets for bio-
fuels market share.

The political and regulatory environment for biofuels lies 
within the broader EU strategy for renewable energy.

The  EU  has  already  gone  beyond  the  drafting  of  white 
papers  and  action  plans.  Specific  legislation  and  other 
measures  have  been  put  in  place  to  stimulate  both 
demand  for  and  production  of  biofuels.  This  fact  sheet 
is focusing on transport, which is responsible for around 

National indicative targets for biofuels market share in EU Member States, 2005 18

3.0

2.5

3.7

2.0

2.0

2.0

2.0

2.0

2.0

2.0

2.0

2.0

2.0

Czech Republic

Sweden

Austria

Spain

Slovakia

Portugal

The Netherlands

Lithuania

Latvia

Germany

France

Estonia

Belgium

EU-25

Italy

Cyprus

Greece

Slovenia

Hungary

Poland

Malta

UK

Finland

Denmark

Ireland

Luxembourg

0.0

1.4

1.0

1.0

0.7

0.7

0.6

0.5

0.3

0.2

0.1

0.1

0.1

0.0

1.0

2.0

3.0

4.0

5.0

18  Note: sources are national reports under the biofuels directive and direct communication with the Commission. The national reports are available at: 

http://europa.eu.int/comm/energy/res/legislation/biofuels_en.htm. Member States were required to set 2005 targets in 2004 and are required to set 2010 
targets in 2007. There is no requirement for intermediate targets to be set. The EU-25 figure is the average of the national targets. The UK figure for 2005 
assumes a 50–50 split between bioethanol and biodiesel.

13

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21 %  of  the  EU‘s  harmful  greenhouse  gas  emissions.  The 
EU is supporting biofuels with the objectives of reducing 
greenhouse gas emissions, boosting the decarbonisation 
of  transport  fuels,  diversifying  fuel  supply  sources  and 
developing  long-term  replacements  for  fossil  oil.  The 
development  of  biofuel  production  is  also  expected  to 
offer new opportunities to diversify income and employ-
ment in rural areas.

Many important measures can only be taken at Member 
State  level.  At  EU  level  a  wide  variety  of  incentives  have 
been put in place to stimulate demand for biofuels:

General  polic y  papers  and 
legislation  adopted

White Paper 
on renewable energies – November 1997

Green Paper 
on security of energy supply – November 2000

Biofuels Directive – May 2003

Energy Taxation Directive – October 2003

a)  General encouragement of sustainable 

Biomass Action Plan – December 2005

transport

EU Strategy for Biofuels – February 2006

Efforts  are  being  made  to  improve  public  transport,  to 
encourage the use of environmentally-friendly modes of 
transport where possible, and to rationalise the transport 
of  goods19.  The  Commission  has  tabled  a  proposal  for  a 
Directive  on  the  promotion  of  clean  and  efficient  road 
transport vehicles20, including those using high blends of 
biofuels.

b) Biofuels targets

In 2003 the Biofuels Directive on the promotion of the use 
of  biofuels  and  other  renewable  fuels  for  transport  set 
out  ambitious  targets  for  the  deployment  of  biofuels.  It 
set reference values at EU level of a 2 % market share for 
biofuels in 2005 and a 5.75 % share in 2010. Targets usually 
consist of a specific share of biofuels in total fuel marketed 
(see figure 2). Although there have been marked increases 
of production and use in recent years, the current market 
share  has  not  yet  reached  the  EU  policy  target.  Success 
depends  on  the  combined  results  of  all  Member  States’ 
measures. There is a mixed picture as to whether Member 
States have attained their targets. 

c) Tax incentives

The Energy Taxation Directive21 adopted in October 2003 
makes  it  possible  for  Member  States  to  grant  tax  reduc-
tions/exemptions in favour of biofuels, under certain con-
ditions. These tax concessions are considered as state aids, 
which may not be implemented without prior authorisa-
tion  by  the  European  Commission.  The  Commission’s 
assessment  aims  to  avoid  undue  distortions  of  competi-
tion and is based on EU guidelines on state aid for envi-
ronmental protection22.

19  See the White Paper on European transport policy for 2010 – COM(2001) 

370 final

20  COM (2005) 634.
21  See: http://europa.eu.int/comm/taxation_customs/taxation/excise_

duties/energy_products/legislation/index_en.htm
22  http://europa.eu.int/eur-lex/pri/en/oj/dat/2001/c_037/

c_03720010203en00030015.pdf of 2001

14

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“Bioölwerk Magdeburg”, © UFOP e. V.

d) Support from regional policy

Many  of  the  regions  covered  by  the  European  Regional 
Development Fund23, particularly in rural regions in Central 
and Eastern Europe, have the potential to use biomass to 
generate economic growth and employment. Support for 
biomass, including biofuels, is an important objective for 
cohesion policy 24. It can be allocated for initiatives such as 
the retraining of farmers and the provision of equipment 
for biomass producers, as well as for investment in facili-
ties that produce biofuels25.

23   See: http://europa.eu.int/scadplus/leg/en/lvb/l60015.htm 
24  The Cohesion Fund was set up in 1993 to provide financial help for 

projects in the fields of environment and transport infrastructure (in 
poorer Member States)

25  For more information see: http://europa.eu.int/comm/agriculture/

biomass/biofuel/index_en.htm 

6 .   A g r i c u l t u r a l   m e a s u r e s 

i n   p l a c e

For many years the CAP has encouraged the produc-
tion of energy crops in the EU, either via direct aids 
or  indirect  forms  of  incentive.  Since  1992,  succes-
sive reforms of the CAP have progressively replaced 
support  from  market  and  price  management  by 
direct aids, gradually decoupled26 from production. 
This  has  helped  to  increase  the  competitiveness  of 
EU  agricultural  production  for  all  possible  outlets, 
including biofuels. The 2003 CAP reform is the latest 
step in this direction.

a)  Various CAP measures

The  CAP  reform  process  is  particularly  important  to 
improve the competitiveness of cereals, which are cur-
rently  one  of  the  major  feedstocks  for  EU  biofuels 
production.  The  ‘decoupling’  of  income  support  from 
production, which results from the replacement of the 
various  direct  aids  by  a  Single  Payment  Scheme  intro-
duced by the 2003 CAP reform, will help to facilitate the 
supply of energy crops.

The set-aside27 obligation, introduced with the 1992 re -
form as a tool to balance the cereals market, has been 
integrated into the Single Payment Scheme. Production 
is  not  normally  allowed  on  set-aside  land,  but  the  cul-
tivation  of  non-food  crops  (including  energy  crops)  is 
authorised if the use of the biomass for energy is guar-
anteed either by a contract or by the farmer.

About  0.9 million  hectares  of  the  EU’s  set-aside  area 
were  used  for  non-food  production  in  2005,  of  which 
0.85 million  hectares  were  used  for  growing  oilseeds 
for biodiesel. The biggest producers of oilseeds on set-
aside  land  are  France  and  Germany,  followed  by  the 
United Kingdom and Spain.

Political  agreement  was  reached  in  autumn  2005  on  a 
major reform of the EU sugar support regime. Sugar beet 
produced for bioethanol can be grown on set-aside areas 

26  Decoupling means breaking the link between the direct aid a farmer 

receives and the production or areas grown of a specific crop
27  Set-aside is the term that refers to the removal of farmland from 

production, usually with the overall aim of reducing the production 
of arable crops, in particular cereals. Farmers producing a significant 
amount of arable crops are required to ‘set aside‘ a proportion of 
their land as a condition for receiving support payments. The current 
percentage is 10 % of the land eligible for the single payment scheme. 
Small farms are exempted.

15

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and  benefit  from  the  energy  crop  aid  (see  below),  and 
will continue to be exempt from production quotas.

Under its market policies, the Commission has made use 
of the possibility of selling alcohol from the distillation 
of wine out of intervention stocks for energy purposes. 
However, this is not a sustainable source for biofuel pro-
duction. In 2005, for the first time, a tender for rye from 
intervention stocks was opened specifically for bioetha-
nol production. The Commission will carefully assess the 
opportunities for additional processing of cereals from 
existing intervention stocks into biofuels.

b) Aid for energy crops

A  special  aid  for  energy  crops  was  introduced  by  the 
2003  CAP  reform.  A  premium  of  EUR  45  per  hectare 
is  available,  within  a  ‘maximum  guaranteed  area’  of 
1.5 million hectares across the EU. If applications exceed 
the  guaranteed  area  ceiling,  the  premium  is  reduced 
proportionally.  However,  the  aid  scheme  was  far  from 
fully  subscribed  in  its  first  two  years  in  operation.  The 
total area supported in 2004 was around 300 000 hec-
tares  and  nearly  570  000  hectares  in  2005  (about  38 % 
of the maximum guaranteed area). Germany, France and 
the  UK  are  the  Member  States  that  made  most  use  of 
this support scheme. A report on this scheme was due 
to be published by the Commission in autumn 2006.

c) Rural development policy

In the EU’s new rural development policy for the years 
2007–201328, various support measures are designed to 
encourage the development of renewable energy. They 
include,  inter  alia,  support  for  investments  on  or  near 
farms in sectors such as biomass processing, bioenergy 
installations,  and  the  use  of  unused  biomass  by  forest 
holders. 

More specifically, in its ‘Community Strategic Guidelines 
for Rural Development’ (2006)29, the Commission encour-
ages Member States to offer support for a number of key 
actions in the field of renewable energy, including biofu-
els.  These  include  new  product  outlets  which  can  offer 
high value added. It is recommended, for example, that 
support is offered for investment and training in the field 
of non-food production, creating innovative new outlets 
for production or helping the development of renewable 
energy materials, and biomass processing capacity. 

28  Council Regulation N° 1698/2005 of 20 September 2005 on support 
for rural development by the European Fund for Rural Development 
(EAFDR) (OJ L 277, 21.10.2005)

29  See: http://ec.europa.eu/comm/agriculture/capreform/rdguidelines/

index_en.htm

7.   T h e   r e s e a r c h   a n d 

d e v e l o p m e n t   e f f o r t 
a t   E U   l e v e l

Production  and  use  of  biofuels  in  the  EU  is  still  at 
the  developmental  stage.  It  is  vital  for  a  significant 
research  and  development  effort  to  bear  fruit  if  the 
EU  is  to  reach  the  goals  it  has  set  itself  for  increas-
ing  the  use  of  biofuels.  Much  work  is  being  done  at 
Member  State  level,  however  there  is  a  role  for  EU-
wide research programmes as well.

The European Commission, in its 7th Framework (research) 
Programme 30,  proposes  to  continue  its  support  for  the 
development  of  biofuels  and  strengthening  of  the  com-
petitiveness of the biofuel industry. High priority is being 
given  to  research  into  the  ‘bio-refinery’  concept  (i. e. 
finding valuable uses for all parts of the plants providing 
biomass), and to second-generation biofuels.

EU-funded research has already been instrumental in the 
development and growth of the EU biofuels industry. For 
example,  the  EUROBIODIESEL31  project  launched  in  1992 
demonstrated  the  technical  and  economic  feasibility  of 
producing  and  using  biodiesel  without  significant  tech-
nical  problems  in  tractors,  buses  and  cars.  The  recently 
launched Integrated Projects RENEW 32 and NILE 33 are key 
actions in the development of second-generation biofuels 
aiming at pilot plant scale production.

The industry-led European Biofuels Technology Platform, 
encouraged  by  the  Commission,  aims  at  providing  and 
implementing  a  common  European  vision  and  strategy 
for  the  production  and  use  of  biofuels,  in  particular  for 
transport  applications.  Major  European  biofuels  stake-
holders  are  represented,  including  the  agricultural  and 

30  See: http://europa.eu.int/comm/research/future/themes/index_en.cfm
31  ‘Utilisation of Vegetable Oils and Their Derivatives as Diesel Fuel’
32  See: http://europa.eu.int/comm/research/energy/nn/nn_rt/nn_rt_bm/

article_2820_en.htm#1

33  See: http://icadc.cordis.lu/fep-cgi/srchidadb?CALLER=NEWS_INNO&SESSI

ON=&ACTION=D&RCN=EN_RCN_ID:24719

16

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forestry  sectors,  biofuels  industry,  oil  companies  and 
fuel  distributors,  car  manufacturers,  food  industry,  and 
research institutes. 

Other technology platforms, such as ‘Plants for the Future’, 
‘Forest-based  Sector’  and  ‘Sustainable  Chemistry’  will 
also increase the knowledge base for biofuel production. 
Actions  at  European  level  (e. g.  ERA-NET 34) in the field of 
biomass  will  further  improve  the  cost-effectiveness  of 
research  and  technological  development  funding  through 
programme coordination and the initiation of joint activi-
ties at national and regional level.

8 .   T h e   E U   S t r a t e g y   f o r 
B i o f u e l s   –   t h e   m o s t 
r e c e n t   i n i t i a t i v e

On 8 February 2006 the European Commission adopt-
ed an ambitious EU Strategy for Biofuels, with a range 
of  potential  market-based,  legislative  and  research 
measures  to  boost  production  of  fuels  from  agricul-
tural  raw  materials.  This  complements  the  Biomass 
Action Plan put forward in December 2005. The Com-
mission’s  Communication  outlining  the  strategy  sets 
out three main aims:

•

•

•

 To promote biofuels in both the EU and developing 
countries
 To prepare for large-scale use of biofuels by improv-
ing  their  cost  competitiveness  and  increasing  re -
search into ‘second generation’ fuels
 To  support  developing  countries  where  biofuel  pro-
duction could stimulate sustainable economic growth

Increased  use  of  biofuels  will  bring  numerous  ben-
efits  by  reducing  Europe’s  dependence  on  fossil  fuel 
imports, reducing greenhouse gas emissions, provid-
ing new outlets for farmers and opening up new eco-
nomic possibilities in several developing countries.

The  Communication  announcing  the  strategy 35  was  ac -
companied  by  an  Impact  Assessment 36  which  presents 
different  policy  options.  Based  on  this  assessment  the 
Communication  recommends  a  regulated,  market-based 
approach  to  encourage  the  development  of  biofuels. 
While existing technologies do not at present offer cost-
competitive  solutions  for  the  EU,  the  benefits  of  encour-
aging  the  development  of  biofuels  should  outweigh  the 
costs.  The  development  of  second  generation  technolo-
gies,  in  which  research  and  development  has  an  impor-
tant role, could further contribute to the cost effectiveness 
of biofuels.

To  reach  the  levels  of  fossil  fuel  replacement  required  at 
EU level for the transport sector, the Communication calls 
for  a  balanced  approach  in  encouraging  both  domestic 
production and imports of biofuels.

34 See: http://europa.eu.int/comm/research/fp6/index_en.cfm?p=9_eranet
35  See: http://europa.eu.int/comm/agriculture/biomass/biofuel/com2006_

34_en.pdf

36  See: http://europa.eu.int/comm/agriculture/biomass/biofuel/sec2006_

142_en.pdf

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The  Strategy  outlines  a  number  of  actions  that  the 
Commission  will  take  to  promote  production  and  use  of 
biofuels, within seven key policy axes (i. e. aims). These are:

1. Stimulating demand for biofuels
A report will be published in 2006 on the implementation 
of and possible revision of the Biofuels Directive. Member 
States should be encouraged to favour biofuels (including 
second generation products), and consideration will also 
be given to biofuel obligations. 

2. Capturing environmental benefits
The Commission will examine how biofuels can best con-
tribute to meeting GHG emissions targets, work to ensure 
sustainability  of  biofuel  feedstock  cultivation,  and  look 
again at limits on biofuel content in petrol and diesel.

3. Developing production and distribution of biofuels
The  Commission  will  encourage  Member  States  and 
regions to take into account the benefits of biofuels and 
other  bio-energy  when  preparing  their  national  frame-
works and operational plans under cohesion policy37 and 
rural development policy38.

4. Extending supplies of feedstock
The supply of raw materials is crucial to the success of the 
strategy  as  they  also  represent  the  primary  cost  compo-
nent  in  the  biofuels  production  process.  To  increase  the 
supply potential the Commission has made sugar produc-
tion for bioethanol eligible for CAP support schemes and 
presented  a  Forest  Action  Plan  which  encourages  more 
efficient mobilization of wood residues. The Commission 
will  also  assess  the  energy  crop  scheme,  inform  farmers 
and  forest  owners,  and  assess  the  possibilities  for  using 
animal by-products and clean waste.

5. Enhancing trade opportunities
The Commission will assess the possibility of putting for-
ward a proposal for separate customs codes for biofuels. 
It  will  pursue  this  in  trade  talks  with  ethanol-producing 
countries  and  propose  amendments  to  the  ‘biodiesel 
standard’.

6. Supporting developing countries
The Commission will ensure that measures for ACP coun-
tries affected by the EU sugar reform can be used to sup-
port the development of bioethanol production, develop 
a  Biofuels  Assistance  Package  for  developing  countries 
and  examine  how  best  to  assist  national  and  regional 
biofuel platforms.

7. Research and development
The Commission will continue to support the development 
of  an  industry-led  European  Biofuel  Technology  Platform 
which will make recommendations for research in this sec-
tor. Biofuels will have a high priority in the 7th Framework 
Programme,  in  particular  the  second  generation  tech-
nologies  and  new  integrated  refining  methods  (the  ‘bio-
refinery’ concept39). Through its Intelligent Energy Europe 
Programme,  the  Commission  will  support  market  intro-
duction and the dissemination of proven technologies.

37  The EU‘s cohesion policy is built on the assumption that redistribution 
between richer and poorer regions in Europe is needed in order to bal-
ance out the effects of further economic integration
38  See: http://ec.europa.eu/agriculture/rur/index_en.htm
39  The co-production of fuels, other forms of energy (heat and power), and 
co-products in integrated bio-refineries will enhance the overall econo-
my and competitiveness of biofuels

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9 .   T h e   n e x t   s t e p s

d) Trade issues

The  Biofuels  Strategy  adopted  by  the  European 
Commission  in  February 2006  announces  that  next 
steps  in  EU  biofuels  policy  should  concentrate  on 
three areas:
•

 An assessment of the Biofuels Directive and its pos-
sible revision
 A  proposal  for  the  revision  of  the  Fuel  Quality  Di-
rective
 A report on the implementation of the energy crop 
premium introduced by the 2003 CAP reform

•

•

a)  Review of the Biofuels Directive

The  Directive  sets  biofuels  targets  and  governs  how  to 
react to them. The review will assess whether the 2010 tar-
get for biofuel use will be met, and will consider whether 
national  targets  for  the  market  share  of  biofuels  should 
be  made  mandatory.  The  Commission’s  report  will  also 
consider  the  measures  to  promote  biofuels  for  the  post-
2010 period.

b) Revision of the Fuel Quality Directive

The Commission will propose a revision of the Fuel Quality 
Directive  to  reconsider  the  quantitative  limits  of  ethanol 
content  on  petrol.  The  Commission  will  also  review  the 
quantitative limits on ethers and biodiesel.

The EU needs continuously to assess the trade aspects of 
biofuels.  It  will  almost  certainly  need  to  supplement  its 
own feedstocks for biofuels with imported materials over 
the  short  to  medium  term.  To  facilitate  trade  there  may 
need  to  be  adjustments  to  customs  codes  for  biofuels. 
The  lack  of  a  specific  customs  classification  for  biofuels 
prevents quantification of the exact amount of imported 
ethanol,  oilseeds  and  vegetable  oil  ultimately  used  in 
the transport sector. In its multilateral and bilateral trade 
agreements the EU will need a balanced approach which 
respects the interests of both domestic producers and EU 
trading partners.

Attention must be paid to the need to maintain a bal-
ance between the food provision and energy needs of 
the EU’s citizens. It should not be forgotten that biofu-
els are currently produced almost entirely from crops 
that  can  also  be  used  for  food  purposes.  Concerns 
have  been  voiced  that,  as  global  biofuel  demand 
grows,  the  availability  of  food  at  an  affordable  price 
in developing countries could be threatened and even 
that,  in  the  EU,  there  could  be  competition  for  land 
between  production  for  food/feed  and  biomass  pro-
vision  for  energy.  The  impact  of  biofuel  demand  will 
need to be continuously monitored. 

c)  Report on the energy crops scheme

f u r t h e r   i n f o r m a t i o n

1 0 .    U s e f u l   s i t e s   f o r 

The 2003 reform of the CAP introduced the energy crops 
scheme,  which  aims  to  encourage  further  production  of 
energy  crops  for  biofuels  production  while  also  improv-
ing  the  options  for  farmers  to  diversify.  In  2003  it  was 
agreed that this scheme should be reviewed in 2006. The 
report will assess the two years of implementation of the 
scheme and its effectiveness, and recommend the neces-
sary adjustments.

European  Commission  Directorate-General  for  Agri-
culture and Rural Development
See:  http://europa.eu.int/comm/agriculture/biomass/bio-
fuel/index_en.htm

European Commission Directorate-General for Trans-
port and Energy
See: http://europa.eu.int/comm/energy/res/index_en.htm

and

http://europa.eu.int/comm/transport/index_en.html

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K
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European Commission
Directorate-General for Agriculture
and Rural Development

The text of this publication is for information purposes only 
and is not legally binding. 

For further information
Rue de la Loi 200, B-1049 Brussels
Belgium 

Telephone
Direct line (+32) 22 95 63 63
Exchange  (+32) 22 99 11 11

Fax
(+32) 22 99 17 61

Internet
http://ec.europa.eu/agriculture/index_en.htm

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