Commission staff working document - The Renewable Energy Progress Report - Accompanying document to the Communication from the Commission to the Council and the European Parliament - The Renewable Energy Progress Report - Commission Report in accordance with Article 3 of Directive 2001/77/EC, Article 4(2) of Directive 2003/30/EC and on the implementation of the EU Biomass Action Plan COM(2005)628 {COM(2009) 192 final} .
Date: 2009-04-24
Institutions: European Commission
Subjects: action programme, bioenergy, biomass, energy policy, energy production, environmental protection

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 24.04.2009 
SEC(2009) 503 final 

COMMISSION STAFF WORKING DOCUMENT 

The Renewable Energy Progress Report 

Accompanying document to the  

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

The Renewable Energy Progress Report 

Commission Report in accordance with Article 3 of Directive 2001/77/EC, Article 4(2) of 
Directive 2003/30/EC and on the implementation of the EU Biomass Action Plan 
COM(2005) 628 

{COM(2009) 192 final} 

.

EN 

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1. 

2. 

2.1 

2.2 

2.3 

2.4 

3. 

3.1 

3.2. 

3.3. 

3.4. 

3.5. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

Introduction .................................................................................................................. 3 

The electricity sector .................................................................................................... 3 

Support Schemes.......................................................................................................... 5 

Administrative barriers and grid access ....................................................................... 7 

Guarantees of Origin .................................................................................................. 10 

Member State progress towards the 2010 targets ...................................................... 11 

The transport sector.................................................................................................... 15 

Progress in the use of biofuels and other renewable fuels ......................................... 16 

Support schemes......................................................................................................... 18 

Economic impacts ...................................................................................................... 27 

Environmental impacts............................................................................................... 31 

Further measures needed in the transport sector ........................................................ 35 

The implementation of the biomass action plan ........................................................ 37 

Availability of biomass .............................................................................................. 38 

Actions taken to increase the availability and use of biomass ................................... 38 

Barriers to the uptake of bioenergy............................................................................ 40 

Implementation of the thirty-three actions of the Biomass Action Plan.................... 41 

Annex A: Member States' support schemes for electricity from renewable energy sources. .. 45 

Annex B: Review of the progress in different renewable electricity technologies .................. 53 

Annex C: Biofuel Energy Share............................................................................................... 59 

Annex D: 2nd-generation biofuel facilities in Europe ............................................................. 60 

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1. 

INTRODUCTION 

This  document  accompanies  COM(2009)XXX  which  outlines  the  progress  the  European 
Union  is  making  developing  renewable  energy.  The  Communication  recalls  the  European 
policy framework for renewable energy1: the importance of renewable energy for meeting our 
climate change and sustainability objectives, improving the security of our energy supply and 
developing an innovative European renewable energy industry to generate jobs and wealth for 
Europe.  

This document provides the background material and analysis supporting the results presented 
in the Communication. It provides a summary of the detailed analysis undertaken for or by the 
Commission which explored the rate of progress and barriers to further growth in renewable 
energy and the impacts of biofuels in transport, as required under Directive 2003/30/EC2. 

2. 

THE ELECTRICITY SECTOR 

There  are  well  recognised  reasons  for  increasing  the  share  of  electricity  from  renewable 
energy sources in the European Union. It will improve energy security, mitigate greenhouse 
gas emissions and regional and local pollutants from the power sector and it will increase the 
European  Union's  competitiveness  in  renewable  energy  technologies.  For  these  reasons,  the 
European Union set a target to source 21% of electricity from renewable energy sources by 
20103.  Each  Member  State  has  a  national  indicative  target  for  electricity  from  renewable 
energy sources to contribute towards the overall target. Member States are free to choose their 
preferred  support  mechanism  in  order  to achieve  their  target.  Directive  2001/77/EC4  further 
stipulates that Member States must improve their grid access for renewable energy generators, 
streamline  and  facilitate  authorisation  procedures  and  establish  a  system  for  guarantees  of 
origin. 

Under Article 3 of Directive 2001/77/EC, Member States are required to publish a biannual 
report  analysing  progress  against  their  national  indicative  target.  This  Communication 
assesses  the  extent  to  which  Member  States  have  made  progress  towards  achieving  their 
national  indicative  targets,  ensuring  that  their  effort  is  consistent  with  the  21%  indicative 
share  of  electricity  produced  from  renewable  energy  sources  in  total  Community  electricity 
consumption by 2010.  

1 

2 

3 

4 

As part of the new energy and climate change policy, the Commission proposed a new, more rigorous 
framework to drive forward the development of renewable energy and the need for more solid, legally 
binding targets for 2020. The new legislation covers all renewable energy and set new targets for 2020 
to ensure a stable regulatory framework for the decade ahead. This new Renewable Energy Directive 
has  now  been  agreed.  In  parallel  to  the  development  of  the  legislative  framework,  the  Commission 
modified the Community Guidelines on state aid for environmental protection (OJ C 82, 1.4.2008, p.1); 
the new Guidelines entered into force in April 2008. Furthermore, under certain conditions, aid can be 
block  exempted  due  to  the  adoption  in  July  2008  of  the  General  Block  Exemption  Regulation  (OJ  L 
214, 9.8.2008, p.3). For national support measures which constitute State aid in the meaning of Article 
87(1)  of  the  EC  Treaty,  these  rules  establish  the  conditions  under  which  Member  States  can  grant 
financial support for the promotion of energy from renewable energy sources 
http://ec.europa.eu/energy/res/legislation/doc/biofuels/en_final.pdf  
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 
This target was set in Directive 2001/77/EC at 22.1% and was realigned to 21% in 2004 when the 10 
new Member States joined the EU. It remained at 21% when Bulgaria and Romania joined the EU.  
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:283:0033:0040:EN:PDF 
Directive  2001/77/EC  of  the  European  Parliament  and  of  the  Council  of  27  September  2001  on  the 
promotion of electricity produced from renewable energy sources in the internal energy market.  

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In  1997,  when  the  European  Commission  initiated  discussions  on  a  European  renewable 
energy  policy,  the  share  of  renewable  electricity  in  what  is  now  the  European  Union  was 
12.9%.  By  2006,  15.7%  of  the  European  Union's  final  electricity  consumption  was  from 
renewable energy sources: a 21.7% increase from 1997 levels5.  

Renewable electricity generation in the European Union's 27 Member States in 1997 
compared to 2006. 

500

400

300

200

100

0

Wind off-shore

Wind on-shore

Tide & Wave

Solar thermal electricity

Photovoltaics

Geothermal electricity

Biowaste

Solid Biomass

Biogas 

Hydro small-scale

Hydro large-scale

1997 [TWh]

2006 [TWh]

Source: Eurostat data 2006 (with normalised hydro) 

Renewable electricity generation in European Union in 2006. 

RES-E 2006 breakdown

/

_
]
r
a
e
y
h
W
T
[
n
o
i
t
a
r
e
n
e
g
y
t
i

c

i
r
t
c
e
l
E

80

70

60

50

40

30

20

10

0

AT BE BG CY CZ DE DK EE ES FI FR GR HU IE IT LT LU LV MT NL PL PT RO SE SI SK UK

Biogas
Wind on-shore

Solid biomass
Wind off-shore

Biowaste
Hydro small-scale

Geothermal electricity
Hydro large-scale

Photovoltaics

Source:  Eurostat/Fraunhofer  ISI:  Electricity  from  renewable  energy  sources  2006  breakdown  of  normalised 
renewable electricity in 2006  

5 

Source: Eurostat data 2006 (normalised hydro) 

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2.1 

Support Schemes 

Member States are required to support electricity from renewable energy sources. Currently, 
Member  States  operate  27  different  support  schemes  using  various  policy  tools,  including: 
feed-in  tariffs;  premium  systems;  green  certificates;  tax  exemptions;  obligations  on  fuel 
suppliers;  public  procurement  policy;  and  research  and  development.  The  support  schemes 
differ partly because support has traditionally been linked to other national priorities and also 
because  national  electricity  markets  still  have  very  different  characteristics  and  remain 
nationally segmented, despite the market opening foreseen by Directive 2003/54/EC6. 

Article 4 of Directive 2001/77/EC required the Commission to present a report in 2005 on the 
mechanisms  for  supporting  renewable  energy.  COM  (2005)6277  assessed  national  support 
schemes and concluded that rather than immediate harmonisation, a coordinated approach to 
renewable  energy  support  schemes  was  more  appropriate,  based  on  cooperation  between 
countries and optimisation of support schemes.  
On 23 January 2008, the Commission published (SEC (2008)578). This Communication also 
concluded  that  although  harmonisation  of  support  schemes  was  a  long-term  goal  it  was  not 
appropriate in the short-term. The report noted that by adopting best practices or combining 
national  support  schemes  Member  States  could continue  to  reform,  optimise  and  coordinate 
their efforts to support renewable electricity.  

Long term stability 

One  element  of  best  practice  for  national  support  schemes  is  to  provide  stability,  such  as 
through  the  setting  of  targets  or  other  objectives  and  the  creation  of  long  term  support 
mechanisms.  It  is  not  the  only  critical  feature  of  support  schemes,  (which  also  include  an 
adequate  level  of  support  and  technological  differentiation),  but  if  support  schemes  can  be 
guaranteed  for  reasonable  time  periods,  they  not  only  produce  an  income  for  renewable 
energy producers, they reassure banks or other financing institutions regarding the risk they 
face for their loans or investments. If the risk is reduced by a stable and guaranteed minimum 
income,  capital  is  cheaper.  The  following  table  considers  Member  States'  performance  on 
ensuring long term stability in their support scheme. 

6 

7 

8 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:176:0037:0055:EN:PDF 
Directive 2003/54/EC of the European Parliament and of the Council concerning common rules for the 
internal market in electricity and repealing Directive 96/92/EC  
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2005:0627:FIN:EN:PDF 
Communication from the Commission: the support of energy from renewable sources 
http://ec.europa.eu/energy/climate_actions/doc/2008_res_working_document_en.pdf  
Commission  Staff  Working  Document:  the  support  of  electricity  from  renewable  energy  sources: 
accompanying document to COM (2008) 19 proposal for a Directive of the European Parliament and of 
the Council on the promotion of the use of electricity from renewable energy sources 

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5 

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Table 1: Long term stability of Member States' support schemes. 

Austria 

Belgium 

Bulgaria 

Cyprus 

Czech 
Republic 

Denmark 
Estonia 

Finland 

France 

Germany 

Greece 

Hungary 
Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

The 
Netherlands 

Poland 

Portugal 

Romania 

Long term stability 

Feed-in tariffs guaranteed for 10 years with two additional years at a reduced rate.  
Minimum prices guaranteed for 10 years (20 years for offshore wind and for photovoltaic 
power in Flanders).  
Preferential prices set annually for all renewable electricity plants put into operation before 
31 December 2010. (In accordance with Article 3 of the Transitional and Final Provisions 
Law the Minister for the Economy and Energy is required to develop a market mechanism 
to  promote  electrical  and  thermal  energy  produced  from  renewable  energy  for  approval 
from the Council of Ministers by 31 December 2011).  
A  financial  mechanism  to  encourage  renewable  energy  sources  is  in  place  until  2010. 
Revised  minimum  purchase  prices  (feed-in)  were  set  at  the  beginning  of  2008.  (Cyprus 
intends to introduce additional programmes for the promotion of renewable energy in the 
future).  
Support guaranteed (feed-in tariff) for 15 years from the date a plant became operational (if 
in existence before 2006) and for new plants there is a decrease in the feed-in tariff of 5% 
per annum.  
Variable bonuses on top of the market price for electricity, guaranteed for 10 years.  
12 year mandatory purchase prices (feed-in tariffs).  
Low interest loans granted for up to 10 years. (New support schemes or the extension of 
existing  ones  will  be  re-considered  if  current  measures  fail  to  promote  electricity  from 
renewable energy sources sufficiently).  
Obligation to buy electricity from renewable energy sources at a price fixed higher than the 
market price (feed-in tariff) for 15-20 years. 
Feed-in  tariff  guaranteed  for  20  years  (15  years  for  large  hydro  plants  and  30  years  for 
small hydro plants).  
Feed-in  tariff  guaranteed  for  10  years;  this  can  be  extended  by  10  years  following  a 
producer's unilateral declaration to the responsible operator.  
Prices (feed-in tariffs) are guaranteed to ensure a return on investment.  
Feed-in tariff guaranteed for 15 years but for no longer than 2024.  
The solar feed-in tariff is guaranteed for 20 years but ceases to exist once 1200 MW have 
been installed.  
Set prices (feed-in) for electricity from renewable energy sources (apart from hydro over 5 
MW, geothermal and photovoltaic), guaranteed for 10 years or until target levels for each 
type renewable energy source are met (target levels are set by the Government annually). 
Wind over 0.25 MW has to compete via tenders.  
Feed-in  tariff  until  2020.  The  National  Energy  Strategy  commits  to  introducing  green 
certificates or other systems beyond 2020.  
Feed-in tariff for 15-20 years. However, legal uncertainty about state aid matters (recently 
resolved) resulted in little new deployment of renewable electricity.  
Net  metering  for  solar  energy  systems  and  one-off  grants  of  25%  for  wind  and  20%  for 
solar. 
Fixed prices for 10 years in principle but this time period can be shortened or lengthened 
depending on the type of renewable energy source. The Minister for Economic Affairs sets 
the budget for subsidies annually9. 
Vendors are obliged to purchase all electricity they are offered at a fixed price set by the 
Energy  Agency  on  the  basis  of  the  average  electricity  price  of  the  previous  year.  All 
electricity from renewable energy sources in Poland is eligible. There is no time limit.  
Guaranteed feed-in tariff for 15 years (12 for wind and 25 for hydro) which expires when 
target levels for renewable electricity are met: 21 GWh for solar and 52 GWh of hydro per 
annum.  
Annual obligatory quotas until 2012. 

9 

Although the Netherlands' support scheme does not guarantee long-term investment it should be enough 
to  meet  its  2010  target.  A  more  stable,  long-term  support  scheme  will  be  needed  to  meet  the  2020 
target.  

EN 

6 

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Slovak 
Republic 

Slovenia 

Spain  

Sweden 
United 
Kingdom 

Fixed purchasing prices (feed-in) for 12 years. 

Feed-in tariffs and a bonus price are available for 5 years in full, they then reduce by 5% 
for a period of 5 years and then by 10% after 10 years. 
Feed-in tariffs are guaranteed for 15-25 years at a fixed price and continue at a lower fixed 
rate thereafter. The bonus payment (feed-in premium) is paid for the entire lifetime of the 
system; however depending on the source of energy and the efficiency of a plant, the first 
15 to 25 years of operation are awarded higher payments. 
Electricity certificate system until 2030. 
The level of the Renewables Obligation will increase in annual steps from 7.9% in 2007/08 
to 15.4% by 2015. The 2015 level will remain until 2027. 

Source: Member States' 2007 Reports 

Key 

Stable support scheme 
Some aspects of the support scheme weaken the stability of the scheme 
Considerable uncertainty undermines the stability of the scheme. 

Although  the  majority  of  Member  States  have  long-term  targets  and  guaranteed  support 
schemes in place, several countries need to do more to ensure that they are providing the best 
environment  to  facilitate  the  levels  of  renewable  energy  deployment  needed.  For  instance, 
Bulgaria  and  Cyprus  only  have  guaranteed  support  schemes  in  place  until  2010  and 
Romania's support is only guaranteed until 2012. As all Member States have ambitious 2020 
renewable  energy  targets  it  would  be  prudent  to  ensure  continuity  of  well  designed  support 
schemes  with  a  view  to  reducing  investor  risk  and  the  cost  of  capital  (while  maintaining 
compatibility with the State aid rules).  

(Further details on Member States' support schemes are provided in Annex A).  

2.2 

Administrative barriers and grid access 

Directive 2001/77/EC requires that electricity from renewable energy sources has guaranteed 
access to the grid and requires Member States to set rules for sharing and bearing the cost of 
various grid investments  necessary to  integrate it.  Member States are also permitted to give 
priority access to networks.  
COM(2006)84810  noted  that  grid  connections  and  extensions  needed  to  be  simplified  and 
stated  that  the  Commission  would  "continue  to  co-operate  closely  with  grid  authorities, 
European electricity regulators and the renewables industry to enable a better integration of 
renewable  energy  sources  into  the  power  grid,  with  particular  attention  paid  to  the  special 
requirements related to much larger deployment of off-shore wind energy, notably as regards 
cross-border grid connections;" 
SEC(2008)5711  noted  that  despite  the  requirements  of  Directive  2001/77/EC,  project 
developers still faced different grid-related barriers, which were mainly related to insufficient 
grid capacity, non-transparent procedures for grid connection, high connection costs and long 
lead  times  to  obtain  authorisation  for  grid  connection.  The  Communication  noted  that  high 
priority  should  be  given  to  removing  administrative  barriers  and  improving  grid  connection 
for renewable energy producers. 

10 

11 

http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0848en01.pdf 
Communication from the Commission to the Council and the European Parliament: renewable energy 
roadmap: renewable energies in the 21st century: building a more sustainable future.  
http://ec.europa.eu/energy/climate_actions/doc/2008_res_working_document_en.pdf 
Commission  Staff  Working  Document:  the  support  of  electricity  from  renewable  energy  sources. 
Accompanying document to the proposal for a Directive to the European Parliament and to the Council 
on the promotion of the use of electricity from renewable energy sources (COM (2008) 19) 

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Commission  analysis  has  also  been  undertaken  to  examine  some  of  the  administrative 
procedures  that  are  considered  to  be  potential  barriers  to  the  development  of  renewable 
electricity.  An  examination  of  the  permit  regimes  for  building  renewable  electricity  plants 
highlighted a wide variety of practices across Member States. On average, over nine different 
authorities  needed  to  be  contacted.  This  amount  varied  according  to  the  Member  State,  the 
technology in question and sometimes the size of the installation. 

Average number of authorities involved in the building permission procedure 

s
e
i
t
i
r
o
h
t
u
a
f
o
r
e
b
m
u
N

40

35

30

25

20

15

10

5

0

a
i
r
t
s
u
A

i

m
u
g
e
B

l

a
i
r
a
g
u
B

l

s
u
r
p
y
C

c

i
l

b
u
p
e
R
h
c
e
z
C

40

35

30

25

20

15

10

5

0

Wind off-shore
Wind on-shore
Solid Biomass
Biogas

Photovoltaics
Tide & Wave
Geothermal
Hydro

K
U

i

n
a
p
S

n
e
d
e
w
S

e
c
n
a
r
F

k
r
a
m
n
e
D

y
n
a
m
r
e
G

e
c
e
e
r
G

y
r
a
g
n
u
H

l

y
a
t
I

d
n
a
e
r
I

l

i

a
n
a
u
h
t
i
L

a
t
l
a
M

d
n
a
o
P

l

l

a
g
u
t
r
o
P

i

a
k
a
v
o
S

l

Source: "Promotion and growth of renewable energy sources and systems" Final Report, Ecofys et al. p67 

There have been some reforms to the authorisation process in recent years. For example, the 
UK  revised  its  legislation  on  planning  permission  for  projects  of  national  interest12  and  the 
Greek  government  has  begun  to  streamline  environmental  permission  procedures  by  setting 
up  two  central  bodies  to  coordinate  procedures  and  has  limited  the  time  authorities  have  to 
grant  or  deny  permits  to  6  months.  National  practices  differ,  and  whilst  most  informed, 
potential renewable electricity producers believe that the procedures for licensing are clear; a 
common complaint is the lack of time limits for responses. This problem appears to have been 
exacerbated by the introduction of tiers of regional government working in conjunction with 
support schemes or authorising bodies at a national level. Examining the duration of permit 
planning also reveals differences according to Member States and technologies: 

12 

Planning Act 2008: http://www.opsi.gov.uk/acts/acts2008/pdf/ukpga_20080029_en.pdf  

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Average lead time for overall authorisation procedure and grid connection 

60

50

40

30

20

10

0

]
s
h
t
n
o
m

i

[
e
m
T
d
a
e
L

Belgium
Austria

Czech Republic
Denmark
Bulgaria
Cyprus

Germany
France

Hungary
Greece

Ireland

Italy

Portugal
Poland
Malta

Slovakia

Sweden
Spain

Lead time for overall procedure
Lead time for grid connection

60

50

40

30

20

10

0

UK

Wind off-shore
Wind on-shore
Solid Biomass
Biogas

Photovoltaics
Tide & Wave
Geothermal
Hydro

Source: "Promotion and growth of renewable energy sources and systems" Final Report, Ecofys et al. p72 

In  general,  average  lead  times  for  grid  connection were  very high representing a  significant 
bottleneck. Exceptionally high authorisation procedure lead times were reported for offshore 
wind developments. 

The uncertainty of the procedure and the time it takes to complete the process compound the 
uncertainty of the overall acceptance or rejection of an application. On this point to there is 
wide variation across Member States but less variation according to technology: 

The average rate of permit rejections. 

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

s
n
o
i
t
c
e
e
r

j

t

mi
r
e
p
f
o
e
a
R

t

Austria

Czech Republic
Belgium
Denmark
Cyprus

Germany
France

Hungary
Greece

Ireland

Malta

Slovakia
Poland

Sweden
Spain

100

90

80

70

60

50

40

30

20

10

0

UK

Wind off-shore
Wind on-shore
Solid Biomass
Biogas

Photovoltaics
Geothermal
Hydro

Source: "Promotion and growth of renewable energy sources and systems" Final Report, Ecofys et al. p74 

The average rate of permit rejection is 30% but in some cases (reflecting ad hoc moratoriums 
on certain technologies in certain regions or countries) the rate is much higher. In many cases, 

EN 

9 

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a lack of grid capacity represents a crucial factor for rejection. This and other reasons (such 
as an excess of applications) suggest that better structured administrative procedures, further 
administrative  resources  and  coordination  with  grid  planning  is  necessary.  For  instance,  in 
countries with a high rate of successful planning appeals, an increase in resources for initial 
applications could speed up the treatment of applications, increase the rate of initial approvals 
and reduce the administrative costs associated with appeals.  

Analysis  of  the  planning  process  reveals  that  problems  relating  to  grid  connection  and 
capacity are a major obstacle which is more often generated by limits on administrative and 
other resources than technological constraints. 

Perceptions of insufficient grid capacity. 

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

s
m
e
bl
o
r
p
y
t
ci
a
p
a
c
d
i
r
g
h
t
wi
s
t
c
e
oj
r
p

f

o
e
r
a
h
S

Austria

Belgium

Czech Republic
Denmark
Bulgaria
Cyprus

Germany
France

Greece

Hungary

Ireland

Poland

Portugal

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

Sweden
Spain

UK

0%

Wind on-shore
Wind off-shore

Solid Biomass
Biogas

Photovoltaics
Tide & Wave
Hydro

Source: "Promotion and growth of renewable energy sources and systems" Final Report, Ecofys et al. p76 

One  important  element  for  ensuring  that  there  is  sufficient  grid  capacity  is  grid  expansion 
financing.  One  crucial  problem  is  a  lack  of  clarity  regarding  cost  breakdowns  and  in  some 
Member  States  there  appears  to  be  no  transparency.  Also  in  some  Member  States  grid 
connection  and  expansion  costs  and  the  charging  regimes  of  some  transmission  system 
operators and distribution system operators still favour incumbent producers and discriminate 
against  new  often  decentralised  smaller  renewable  electricity  producers.  This  hampers  job 
creation and growth at local and regional level.  

2.3 

Guarantees of Origin 

Article 5 of Directive 2001/77/EC requires that Member States outline the measures taken to 
ensure  the  reliability  of  the  system  they  have  in  place  to  guarantee  the  origin  of  electricity. 
Most Member States have reported that they have legislated to create at least the framework 
for  the  system  of  guarantees  of  origin.  That  said,  the  actual  use  made  of  the  guarantees  of 
origin  differs  widely  across  Member  States.  In  some  instances  they  are  used  in  conjunction 
with green certificate/obligations support schemes. In most cases they are used by electricity 
suppliers  to  show  their  consumers  that  they  have  purchased  "green  electricity".  The 
implementation of the system of guarantees of origin was partly meant to help Member States 
and  electricity  suppliers  fulfil  their  obligations  to  prove  the  nature  of  the  energy  mix  they 
provide  to  consumers  under  Directive  2003/54/EC13.  Member  States  are  required  to  ensure 

13 

concerning common rules for the internal market for electricity 

EN 

10 

   EN 

 
 
 
 
 
 
 
 
                                                 
that  the  reporting  of  energy  mix  by  suppliers  is  reliable.  However,  a  forthcoming  study 
undertaken  for  the  Commission  raises  concerns  that  whilst  legislation  might  be  in  place, 
current differences in national schemes and a lack of standardisation, mutual recognition and 
verification mean that the use of guarantees of origin is not always reliable, and their role as a 
standard  proof  of  renewable  electricity  is  at  times  constrained  or  unrecognised.  (See  E-
TRACK  II,  final  report  due  March  2009  http://www.e-track-project.org/).  This  is  another 
matter  which  is  being  addressed  in  the  new  Directive  on  renewable  energy  and  will  be 
followed closely by the Commission.  

2.4 

Member State progress towards the 2010 targets 

Each  Member  State  has  a  target  for  the  amount  of  electricity  they  should  produce  from 
renewable  energy  sources  by  2010.  The  table  below  show  the  effort  made  so  far  by  each 
Member State. 

Table 2: Electricity from renewable energy sources: progress towards the 2010 target  
2010 
target 
(%) 

Share the 
reference 
year14 

Share in 
2006 
(%) 

Share in 
2004 
(%) 

Member 
State 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech Rep 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovak Rep 
Slovenia 
Spain  
Sweden 
UK 
EU27 

60.94 
2.15 
6.43 
0.00 
3.68 
27.08 
0.59 
26.79 
14.01 
10.58 
7.59 
2.28 
5.65 
15.78 
46.01 
3.43 
3.33 
0.00 
5.71 
2.19 
28.56 
29.15 
13.55 
29.37 
18.58 
51.52 
3.64 
14.35 
Source: Eurostat (with normalised hydro) 

69.00 
1.06 
6.37 
0.00 
3.47 
8.87 
0.26 
26.29 
15.62 
6.33 
7.70 
0.48 
4.25 
15.52 
47.48 
3.56 
1.21 
0.00 
3.51 
1.63 
32.56 
30.66 
14.49 
29.66 
16.45 
47.99 
2.12 
12.85 

61.62 
3.89 
6.82 
0.00 
4.11 
25.93 
1.45 
26.47 
14.29 
12.59 
8.79 
3.68 
8.57 
18.32 
40.40 
3.87 
3.67 
0.00 
7.93 
3.05 
31.16 
28.05 
16.00 
28.26 
19.11 
52.28 
4.63 
15.72 

Change in 
percentage 
points in shares 
2004-2006 
0.7 
1.7 
0.4 
0.0 
0.4 
-1.2 
0.9 
-0.3 
0.3 
2.0 
1.2 
1.4 
2.9 
2.5 
-5.6 
0.4 
0.3 
0.0 
2.2 
0.9 
2.6 
-1.1 
2.5 
-1.1 
0.5 
0.8 
1.0 
1.4 

Progress made 
towards target from 
reference year in 
2006 (%) 
0 
57.29 
9.72 
0 
14.13 
84.75 
24.59 
3.45 
0 
+100 
8.79 
+100 
48.27 
40.11 
0 
9.01 
54.79 
0 
80.51 
24.19 
0 
0 
9.15 
0 
20.54 
35.72 
31.85 
35.21 

78.1 
6 
11 
6 
8 
29 
5.1 
31.5 
21 
12.5 
20.1 
3.6 
13.2 
22.55 
49.3 
7 
5.7 
5 
9 
7.5 
39 
33 
31 
33.6 
29.4 
60.0 
10 
21 

To reach the 2010 target the EU had to increase the share of electricity from renewable energy 
sources from 13% to 21%. In 2006 it stands at 15.7%, which equates to 35.2% (2.87/8.15) of 
progress needed to reach the 2010 target.  

14 

Reference year for EU-15 is 1997. Reference year for EU-12, BG and RO is 2000.  

EN 

11 

   EN 

 
                                                 
In 2006, Belgium, Denmark Ireland, Luxembourg, The Netherlands, Sweden had made more 
progress towards their 2010 target than the European average, and Hungary and Germany and 
Hungary had reached their target (or in fact, exceeded it).  

It  should  be  noted  that  the  share  of  electricity  from  renewable  energy  sources  in  Austria, 
France, Latvia, Portugal, Romania and Slovenia was lower in 2006 than in the reference year. 
Therefore,  these  Member  States  need  to  do  more  to  reverse  their  downward  trends.  This  is 
particularly true for France which had an annual decrease from 1997-2005.  

In 2006, twenty one Member States were less than half way towards meeting their 2010 target 
for  electricity  from  renewable  energy  sources.  Several  Member  States  are  unlikely  to  meet 
their 2010 targets.  

Table 3: The likelihood of Member States meeting their 2010 electricity from renewable 
energy sources targets.  

Austria 
(cid:47) 

Belgium 
(cid:46) 

Bulgaria 
(cid:47) 

Cyprus 
(cid:47) 

Czech 
Republic 
(cid:47) 

Denmark 
☺ 

Estonia 
(cid:47) 

Finland 
(cid:47) 

France 
(cid:47) 

Germany 
☺ 

Expect to meet the target? 
Between  2004  and  2006  electricity  consumption  increased  by  4.7%  and  electricity  from 
renewable energy sources increased by 5.9%. However Austria still has a lower share in 2006 
than it did in 1997. 
Between  2004-2006  electricity  from  renewable  energy  sources  increased  by  over  one  and  a 
half  percentage  points,  and  it  is  over  half  way  towards  its  target.  Belgium  expects  to  have 
6900 GWh of electricity from renewable energy sources in 2010 and 95,670 GWh electricity 
consumption.  This  would  equate  to  7.2%  electricity  from  renewable  energy  sources, 
exceeding the 6% target.  
Between 2004 and 2006 electricity from renewable energy sources increased by 13% whilst 
total  electricity  consumption  increased  by  6.6%.  However,  the  share  of  electricity  from 
renewable energy sources has risen by less than half a percentage point and Bulgaria is still 
some way off from its target. 
Cyprus  aims  to  have  6%  electricity  from  renewable  energy  sources  by  2010  (4.5%  from 
biomass  and  1.5%  from  photovoltaics  and  some  wind  power).  However  in  2006,  0% 
electricity  came  from  renewable  energy  sources  and  between  2004  and  2006  Cyprus'  final 
electricity  consumption 
increased  by  10.7%.  Adequate  support  scheme  should  be 
implemented urgently together with eliminating administrative barriers to RES-E deployment. 
Transposition of Directive 2001/77/EC has been slow and short-term, support schemes have 
not  provided  a  stable  environment  for  investment  and  there  are  administrative  barriers  to 
further  deployment.  Between  2004  and  2006  electricity  from  renewable  energy  sources 
increased by 17%, whilst final electricity consumption increased by 4.5%, however progress 
towards the target is only 14%.  
Denmark  expects  to  have  33%  electricity  from  renewable  energy  sources  by  2010  (target 
29%). Between 2004-2006 Denmark's electricity from renewable energy sources decreased by 
1.1% whilst electricity consumption increased by 3.3%.  
Despite significant increases in the absolute quantity of electricity generated from renewable 
energy  sources,  growth  as  a  share  of  total  electricity  consumption  is  slow  and  progress 
towards the target limited.  
From  1997  to  2006  electricity  from  renewable  energy  sources  fluctuated  between  25  and 
27.1%  (target  31.5%).  Finland's  electricity  from  renewable  energy  sources  grew  by  2.1% 
between 2004 and 2006 whilst its electricity consumption grew by 3.3%. Finland will need to 
diversify its renewable energy sources in order to meet its 2010 target.  
Between 2004 and 2006 electricity from renewable energy sources increased by 1.8% whilst 
electricity consumption decreased by 0.24%. However, with a 2006 share still below that of 
1997, France is a long way from achieving its target.  
Germany  has  passed  its  12.5%  target.  Germany  is  strongly  committed  to  developing 
electricity from renewable energy sources which increased by 20.1% between 2004 and 2006 
whilst electricity consumption grew by 0.89%.  

EN 

12 

   EN 

 
 
Greece 
(cid:47) 

Hungary 
☺ 

Ireland 
(cid:46) 

Italy 
(cid:46) 
Latvia 
(cid:47) 

Lithuania 
(cid:47) 

Luxembourg 
(cid:46) 

Malta 
(cid:47) 

The 
Netherlands 
☺ 

Poland 
(cid:47) 

Portugal 
(cid:47) 
Romania 
(cid:47) 

Slovakia  
(cid:47) 

Slovenia 
(cid:47) 

Between 2004 and 2006 electricity from renewable energy sources increased by 21.1% whilst 
electricity  consumption  grew  by  4.5%.  In  line  with  earlier  estimates,  Greece  predicts  that 
electricity  from  renewable  energy  sources  will  grow,  but  with  less  than  10%  of  the  effort 
made towards the target, it seems unlikely that the target will be reached.  
Hungary has already exceeded its 3.6% electricity from renewable energy sources target (the 
lowest  in  the  EU).  Between  2004  and  2006  electricity  from  renewable  energy  sources 
increased  by  68.6%  whilst  final  electricity  consumption  increased  by  4.6%.  However,  it 
should be noted that the share decreased between 2005 and 2006 by 17.1%. More long term 
policies  are  needed  to  maintain  the  2010  target  achievement  and  to  ensure  favourable 
conditions for the post 2010 period. 
Between  2004  and  2006  Ireland's  electricity  from  renewable  energy  sources  increased  by 
63.5%  whilst  electricity  consumption  increased  by  7.8%.  Ireland  expects  to  meet  its  13.2% 
target but must make significant efforts to complete the remaining 53% of progress towards 
the target. 
Between  2004  and  2006  electricity  from  renewable  energy  sources  increased  by  2.5 
percentage points, however it still has to make 60% of the effort needed to reach its target.  
The  proportion  of  electricity  from  renewable  energy  sources  in  Latvia  is  decreasing.  Latvia 
will need to do substantially more if it is to meet its electricity from renewable energy sources 
target.  
Lithuania  expects  to  reach  its  target,  but  progress  to  2006  has  been  slow.  The  share  of 
electricity  from  renewabl  energy  sources  grew  by  0.4  percentage  points  between  2004  and 
2006, and over 90% of the effort to reach the target remains to be made.  
Uncertainty regarding the feed-in tariff regime and State Aid rules which have only recently 
been resolved, has slowed developments since 2005. Between 2004 and 2006 electricity from 
renewable energy sources increased by 15.8% and electricity consumption increased by 4.9%. 
Malta is very unlikely to meet the 2010 target as little attention has been given to electricity 
from renewable energy sources. Between 2004 and 2006 electricity consumption increased by 
3.6%. In 2006 the share of electricity from renewable energy sources was still 0%. Malta has 
committed to reviewing and increasing support mechanisms.  
Between 2004 and 2006 electricity from renewable energy sources increased by 42.4% whilst 
electricity  consumption  grew  by  2.5%.  Support  was  frozen  in  August  2006  creating 
uncertainty for investors; however the reintroduction of support in 2008 should ensure that the 
Netherlands meets its target.  
Due  to  increased  quota  obligations  and  higher  certificate  prices,  faster  growth  is  expected 
from 2007. However, in 2006 Poland only had 3.1% electricity from renewable energy (24% 
of  the  effort  needed  to  reach  its  2010  target),  with  less  than  once  percentage  points  growth 
between 2004 and 2006. 
In  2007  Portugal  set  a  national  target  of  45%  electricity  from  renewable  energy  sources  by 
2010 (their indicative target is 39%). However the current % is still below the reference year.  
Between 2004 and 2006, electricity from renewable energy sources increased by 1.7% whilst 
electricity consumption increased by 5.7%. More effort is needed in order to meet the  2010 
target  as  Romania's  share  of  electricity  from  renewable  energy  sources  has  decreased  since 
2000.  
Between  2004  and  2006  electricity  from  renewable  energy  sources  increased  by  19.5%  and 
electricity consumption increased by 1.2% but Slovakia is still some way off the target. New 
tariffs were set in 2008 so progress in 2008 should give better future growth. 
Slovenia will find it difficult to meet the 2010 target without major changes in investment and 
new  production  capacity  in  renewable  energy  sources.  Between  2004  and  2006  electricity 
from renewable energy sources increased by 0.4% whilst electricity consumption increased by 
4.7%; the share of electricity from renewable energy sources decreased.  

EN 

13 

   EN 

 
 
Spain 
(cid:47) 

Sweden 
(cid:46) 

Spain  expects  to  exceed  its  29%  target  by  2010.This  is  based  on  estimates  of  100  TWh  of 
electricity  from  renewable  energy  sources  from  a  total  337.4  TWh  electricity  consumption. 
However  between  2004  and  2006,  electricity  from  renewable  energy  sources  increased  by 
11.3% and electricity consumption increased by 8.2% - an increase in share of 0.5 percentage 
points, and Spain still needs to make 80% of the efforts to reach the target. That said, Spain 
increased  its  support  for  electricity  from  renewable  energy  sources  in  May  2007  therefore 
2008 data should give stronger future growth and improve the chances of Spain meeting its 
2010 target.  
.  Between 2004  and  2006  electricity  from  renewable  energy  sources  increased by  1.3%  and 
electricity  consumption  decreased  by  0.19%.  Sweden  is  on  tract  to  meet  its  target,  but  still 
needs to make 65% of the effort. 
Between 2004 and 2006, electricity from renewable energy sources increased by 28.6% and 
electricity  consumption  increased  by  1.1%.  However  the  UK  still  has  to  make  68%  of  the 
efforts needed  to  reach  its  target. There  are  significant  delays  in  connecting  electricity  from 
renewable energy sources to the transmission and distribution network and the UK needs to 
increase the speed of deployment substantially in order to meet the 2010 target. In February 
2008 there were 11GW of capacity in the planning system waiting for consent.  
Source:  information  from  Member  States'  reports  and  growth  rates  based  on  Eurostat  2006  data  (with 
normalised hydro generation).  
Key to "smiley" grades: % of progress from reference year (1997/2000) to 2010 target 

United 
Kingdom 
(cid:47) 

0-33%  
(cid:47) 

34-66%  
(cid:46) 

67-100+  
☺ 

In 2006, the Commission noted that the EU was not on track to meet its 21% electricity from 
renewable  energy  sources  target,  predicting  that  an  18-19%  share  of  electricity  from 
renewables sources would be achieved by 2010. This prediction was based on Member States' 
progress against their national indicative targets up to 2005.  

The  Commission  still  expects  all  Member  States  to  bring  forward  policies  in  order  to  meet 
their national indicative target. Indeed, given the new targets established for 2020, the 2010 
targets act as a necessary minimum interim sectoral target. Improvements to national support 
schemes  and  the  ongoing  integration  of  the  internal  market  should  facilitate  growth  of 
renewable  electricity  but  most  Member  States  still  need  better,  active  policies  to  ensure 
growth occurs. 

EN 

14 

   EN 

 
 
 
3. 

THE TRANSPORT SECTOR  

Article 4.2 of the Biofuels Directive states: 

"By  31  December  2006  at  the  latest  and  every  two  years  thereafter  the  Commission  shall 
draw  up  an  evaluation  report  for  the  European  Parliament  and  for  the  Council  on  the 
progress made in the use of biofuels and other renewable fuels in the Member States. 

This report shall cover at least the following: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

the  cost-effectiveness  of  the  measures  taken  by  Member  States  in  order  to  promote 
the use of biofuels and other renewable fuels; 

the economic aspects and the environmental impact of further increasing the share of 
biofuels and other renewable fuels; 

the  life-cycle  perspective  of  biofuels  and  other  renewable  fuels,  with  a  view  to 
indicating possible measures for the future promotion of those fuels that are climate 
and  environmentally  friendly  and  that  have  potential  of  becoming  competitive  and 
cost-efficient; 

the sustainability of crops used for the production of biofuels, particularly land use, 
degree of intensity of cultivation, crop rotation and use of pesticides; 

the assessment of the use of biofuels and other renewable fuels with respect to their 
differentiating  effects  on  climate  change  and  their  impact  on  CO2  emissions 
reduction; 

a review of further more long term options concerning energy efficiency measures in 
transport." 

It follows that the current reporting exercise needs to have two parts: progress in the use of 
biofuels  and  other  renewable  fuels  and  environmental  and  economic  impacts  (points  (a)  to 
(f)). 

For  the  first  part,  the  Commission  commissioned  PricewaterhouseCoopers  to  conduct  a 
review  of  Member  States'  data.  Member  States'  progress  reports  under  the  Directive  were 
analysed and a questionnaire was sent to Member States and stakeholders to collect additional 
data.  Based  on  this  work,  this  working  document  includes  new  analysis  of  Member  States' 
support schemes for biofuels. 

In preparing the second part, the Commission took account of the fact that the previous (2007) 
progress report focussed particularly on economic and environmental impacts. These impacts 
have, in addition, been the subject of extensive discussion as part of the examination of the 
proposed  Renewable  Energy  Directive.  The  agreed  text  of  that  Directive  includes  extensive 
monitoring  and  reporting  requirements  on  these  topics  which  will  certainly  lead  to  a 
substantial  increase  in  knowledge  and  understanding,  as  well  as  sustainability  requirements 
which  will  alter  the  impacts  of  the  biofuels  consumed.  For  that  reason,  while  this  report 
updates the economic and environmental analysis made in the last progress report, it does not 
undertake extensive new assessments. 

For all of this discussion it should be noted that "biofuels" is a subset of biomass, referring to 
liquid or gaseous fuel for transport produced from biomass. 

EN 

15 

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3.1 

Progress in the use of biofuels and other renewable fuels 

According to Member States' reports, in 2007 8.1 Mtoe (2.6%) of the total fuel consumed in 
transport in the EU was from biofuels. In 2007 biodiesel accounted for 6.1 Mtoe or 75% of 
renewable fuels in transport, of which 26% was imported. Bioethanol constituted 1.24 Mtoe 
or 15% of renewable fuels in transport of which 31% was imported, the remaining 10% being 
made  up  from  pure  vegetable  oil  consumed  in  Germany,  Ireland  and  the  Netherlands  and 
biogas in Sweden.  

As  in  the  previous  period,  there  was  no  reported  consumption  of  other  types  of  renewable 
energy  in  transport.  (The  use  of  hydrogen  from  any  source  remains  insignificant.  A  little 
electricity  is  used  in  road  transport,  a  part  of  which  could  legitimately  be  attributed  to 
renewable energy, but Member States preferred to classify this as electricity from renewable 
energy rather than as transport from renewable energy.)  

Germany, France, Austria, Sweden and UK remained the 5 largest biofuel consumers in 2006 
and 2007, consuming 87% and 81% of the total EU biofuels respectively.  

Table 4: Biofuel consumption and energy share for the EU 27 in 2005 – 2007.  

  Fossil fuel 
(Ktoe) (c) 

Biodiese
l (Ktoe) 

Vegetabl
e oil 
(Ktoe) 

Bio-
ethanol 
(Ktoe) 

Biofuel 
(Ktoe) 

Share 
(%) 

Total fuel 
(Ktoe) 

2005(a) 

2006 

2007(b) 

292876  

303125  

306295  

2277 

4082 

6091 

182.4 

648 

768 

552 

881 

1246 

3011 

5611 

8105 

1.02  

1.82  

2.58  

295901 

308751 

314400 

(a) EU 25 
(b) Cyprus and Finland's biofuel data is missing. Biofuel data for Belgium, Bulgaria, Czech Republic, Denmark, Germany, 
Greece,  Hungary,  Luxembourg,  Poland,  Portugal,  Slovakia  and  Spain  are  taken  from  EurObserver's  Biofuel 
Barometer15. 

(c) Fossil fuel data corrected with the last 6 year trend from Eurostat data on fossil fuel consumption in the transport sector 

where missing.  

(d) Sweden consumed 13.7 Ktoe of biogas in 2005, 14.6 Ktoe in 2006 and 24.07 Ktoe in 2007.  

The  following  table  shows  developments  in  the  share  of  domestically  produced  biofuel 
between 2005 and 2007. 

Table 5: Biofuel self-sufficiency in the EU27 (ratio of production to consumption in %). 

Biodiesel sufficiency ratio  
2007 
2006 
2005 
74 
91 
114 

Bioethanol sufficiency ratio 
2005 
83 

2006 
91 

2007 
70 

Biofuel sufficiency ratio 
2005 
109 

2006 
91 

2007 
73 

Note:  100%  implies  full  self  sufficiency;  a  higher  figure  implies  potential  for  export  of  biofuels;  and  a  lower 
figure means that some or all of biofuel consumption in a given Member State is met by imports.  

Source:  Source:  PwC  based  on  Member  States'  Reports,  EBB  and  EBio  (producer  data)  and  EurObserver's 
Biofuel Barometer 

It can be seen that the share of domestic biodiesel production, in particular, has been falling 
(and it can be expected that this trend continued in 2008). The overall balance for biodiesel 
changed from positive in 2005 with 14% (355 Ktoe) exported to negative in 2007 with 25.8% 
(1.8 Mtoe) imported. During the same period, the bioethanol deficit increased from 17% (171 
Ktoe) in 2005 to 31% (397 Ktoe) in 2007.  

The  main  reason  for  the  change  was  the  increasing  market  share  of  competitively  priced 
biofuel  for  import,  mainly  soy  oil  methyl  ester  (SME  B-99.9)  from  the  United  States  and 

15 

Biofuels Barometer, EurObserv'ER 49, June 2008 

EN 

16 

   EN 

 
                                                 
Argentina. The EU's estimated import of SME B-99.9 in 2007 was 1 million tonnes, up from 
90,000 in 2005. In both the US and Argentina, industry mainly serves the export market. The 
European Commission started a formal anti-dumping investigation in June 2008, which could 
lead  to  the  imposition  of  punitive  tariffs  on  SME  B-99.9  imports  from  the  United  States. 
Initial findings are expected in mid-March 2009.  

To meet the national targets that Member States have set themselves under the Directive, the 
consumption of biofuel and other renewable fuels would need to more than double over the 
next two years. Assuming that in 2010 the increase in fuel for transportation was the same as 
in 2000-2006 for each Member State and the ratio between bioethanol and biodiesel remained 
the same as the average observed in 2005-2007, the additional biofuel consumption would be 
approximately  10  Mtoe  (7.8  Mtoe  biodiesel  and  2.8  Mtoe  bioethanol).  The  additional 
estimated biofuel required in each Member State is indicated in the Table 6. 

Table  6:  Estimation  of  the  additional  biofuel  needed  to  reach  national  targets  in  2010 
(Ktoe). 

Annual rate 
of variation of 
the fuel 
consumption 
in the 
transport 
sector  

Estimated 
need of 
Fuel for 
the road 
transport 
sector in 
2010 
(KToe)  

2010 target 
share 
(national 
target as 
notified to 
Commission) 

Estimation 
Additional 
biofuel 
needed in 
2010 in 
KToe 

Estimation 
Additional 
biodiesel 
needed in 
2010 in 
KToe 

Estimation 
Additional 
bioethanol 
needed in 
2010 in 
KToe 

Austria 
Belgium (E) 
Bulgaria (E) 
Cyprus 
Czech Rep. 
(E) 
Denmark 
(E) 
Estonia 
Finland 
France 
Germany 
Greece (E) 
Hungary (E) 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
(E) 
Malta 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain (E) 
Sweden 
The 
Netherlands 
UK 
EU 27 

3.65 
-0.14 
7.02 
1.37 
6.03 

2.03 

5.26 
1.77 
-0.24 
-0.75 
2.76 
6.17 
4.92 
1.09 
7.45 
5.98 
5.35 

3.49 
1.99 
6.61 
1.43 
3.75 
3.76 
2.90 
3.55 
0.84 

1.17 

9335 
8414 
2725 
1080 
7787 

4555 

1050 
4328 
41571 
50006 
7114 
5430 
5303 
40827 
1360 
1420 
2757 

166 
11153 
8900 
5868 
2208 
1792 
36284 
8259 
10972 

41596 
322259 

5.75 
5.75 
5.75 
2.50 
5.75 

5.75 

5.75 
5.75 
7.00 
6.25 
5.75 
5.75 
5.75 
5.75 
5.75 
5.75 
5.75 

5.75 
5.75 
5.75 
5.75 
5.75 
5.00 
5.75 
5.75 
5.75 

5.00 

176 
393 
44 
27 
415 

256 

60 

1486 
-868 
329 
303 
284 
2171 
76 
14 
124 

8 
563 
345 
293 
74 
76 
1713 
108 
386 

1731 
10585 

171 
393 
20 
23 
414 

0 

50 

1192 
-799 
329 
4 
263 
2171 
60 
9 
121 

8 
231 
345 
293 
62 
73 
854 
33 
230 

1246 
7794 

4 
0 
24 
4 
1 

256 

10 

294 
-69 
0 
299 
21 
0 
17 
5 
3 

0 
332 
0 
0 
12 
3 
859 
75 
156 

484 
2791 

EN 

17 

   EN 

 
  
 
 
 
 
 
Source: Member States' reports on biofuel and from EUROSTAT data on fuel consumption from road transport 

3.2. 

Support schemes 

This  section  analyses  the  different  measures taken  by  Member  States  to  promote  the  use  of 
renewable  fuels  in  transport.  Across  the  EU  there  are  both  general  support  measures  and 
specific support measures which apply to certain producers or users.  

General support measures 
Tax relief and obligations to blend are the two most common instruments16 used by Member 
States to promote biofuels, with important developments having taken place over the last two 
years.  In  2005-2006  all  Member  States,  except  Finland,  used  tax  exemptions  as  the  main 
support  measure,  while  obligations  to  blend  were  only  used  by  3  countries  (Austria,  France 
and  Slovakia).  Since  2007,  more  than  half  of  Member  States  (Austria,  Cyprus,  Czech 
Republic,  France,  Germany,  Italy,  Lithuania,  Luxembourg,  Portugal,  Romania,  Slovakia, 
Slovenia, Spain, Sweden, The Netherlands and United Kingdom) have adopted obligations to 
blend. In most cases, an obligation to blend was combined with partial but increasing levels of 
taxation (i.e. Austria and Greece for ethanol and Luxembourg and Portugal for biodiesel) or 
unchanged levels of taxation17 (i.e. The Netherlands).  

Some  countries  utilise  a  quota  mechanism  (Belgium,  France,  Italy,  Ireland  and  Portugal) 
where  the  amount  of  biofuel  benefiting  from  support  is  shared  amongst  different  suppliers 
through  calls  for  tender.  This  mechanism  allows  Governments  to  decide  the  amount  of 
biofuels that has to be supplied each year, thus creating some regulation of the market.  

Introducing obligations to blend in addition to existing tax relief has boosted biofuel growth 
in many Member States, leading to considerable progress towards 5.75% target. For example, 
the introduction of compulsory blending in 2007 led to a rapidly increasing share of biofuels 
in the Netherlands from 0.3% in 2006 to 2% in 2007. Some Member States claim that their 
obligations are not yet legally enforceable and therefore have not yet a strong influence on the 
market. They therefore maintain other support mechanism in parallel to the obligations. 

16 

17 

Surveys  of  policies  aiming  at  developing  biofuel  industry  and  consumption  are  common.  The  most 
comprehensive  are  the  reports  by  PREMIA,  ECN,  Kutas-Lindberg-Steenblik  (KLS,  by  IISD  of 
Geneve),  OECD  and  two  of  Intelligent  Energy  Europe,  i.e.  Refuel  and  Biodiesel  Chains  (BC),  plus 
notifications  of  State  Aid  to  the  Commission.  KLS  and  BC  (albeit  only  referring  to  biodiesel)  reports  are  very 
detailed.  These sources,  containing  useful  information  about  policies  and  instruments  sometimes  not  available  in 
the Member States' Reports, have been tapped on to integrate the information of the Member States' reports, which 
remain the most important source of information. [Please give complete references for all sources] 
In United Kingdom the level of rebate is fixed up to 2010 (20 pence/litre).  

EN 

18 

   EN 

 
                                                 
The following table summarises different biofuel support measures used by Member States. 

Table 8: General support measures: tax relief and obligations to blend. 

MS 
reports

Country

Period

Tax relieves

Timing reference

Obligation to 
mixture

National 
percentage 
share on the 
total EU 27 
conventional 
fuels 2007

National 
percentage 
share on the 
total EU 27 
all biofuels 
2007

2008 Austria

2005-2006

2007-2008
2007 Belgium 2005-2006
2007-2008
2005-2006
2007-2008
2005-2006

2007 Bulgaria

2007 Cyprus

2007

Czech Rep
ublic

2007 Denmark

2008 Estonia

2007 Finland

France

2008

Germany  

2007

2008 Greece

2007 Hungary

2008 Ireland

2008 Italy

2007-2008

2005-2006

2007-2008
2005-2006
2007-2008
2005-2006
2007-2008
2005-2006

2007-2008

2005-2006

2007-2008

2005-2006

2007-2008
2005-2006

2007-2008
2005-2006
2007-2008
2005-2006

2007-2008
2005-2006

2008 Latvia

2007-2008
2005-2006
2007-2008
2008 Lithuania 2005-2006
2007-2008

2007

Luxembou
rg

2008 Malta

2007 Poland

2007 Portugal

2008 Romania

2007 Slovakia

2008 Slovenia

2007 Spain

Sweden

2008

2008

The Nether
lands

2005-2006
2007-2008
2005-2006
2007-2008
2005-2006
2007-2008
2005-2006
2007-2008
2005-2006
2007-2008
2005-2006
2007-2008
2005-2006

2007-2008
2005-2006

2007-2008

2005-2006
2007-2008

2005-2006

2007-2008

2008

United 
Kingdom 2005-2006

2007-2008

EU - 27

x

x ↑
x
x

x

x

x

only pure↓
x
x
x
x

x

x

x

x

jan05-june07
from july07(BD)-
oct07(BE)

from nov06

from jun07

from 2007 to 2010

dec05-dec06

from Jan 2007

from Jan 2005

2005-2011

oct05-oct08
(yearly increasing obligations, up 
to 5,75%, already reached)

from 2007 to 2010 (increase up to 
2008, after the same at 2%)

 2007 to jan 2009 (yearly 
incr.obligations, up to 4 %)

from jan 2008 (yearly 
incr.obligations, up to 5,75 % in 
2010)

x
yearly increasing obligations, up to 
7 % in 2010

x trading

TGAP

TGAP

x trading

yearly increasing obligations: 6,75 
% in 2010, 8% in 2015

By yearly Finance 
Laws

From 2004 to nov 05

from 1jan08 no 
exemption

from 2006 to 2010

from April 2006

from 2007 to 2010

x trading

from jan 2007

from 2001

in 2006

from 2004

Apr 2004 - dec 06

from May 2007

From March 2006

From May 2007

From May 2006

from 1998

From 2003 to 2012

Exemption from CO2 
tax

Detaxation in 2006

From jan 2002 to dec 
2012

x
x

x

x

x
x
x
x

x

x
x

x

x

x ↓

x

x

x
x
x
x

x
x

x
x
x
x
x

x

x
x
x
x↑
x
x

x
x
x
x

x
x

x

x
x

x

x

x

x

It is proposed to introduce 
obligation in 2010

yearly increasing obligations (1% 
in 07, 2% in 08, up to 5,75 % in 
2010)

budget Law for 2007

not quantified

(indicative ?)

From May 2006

starting from 2006

Yearly increasing obligations (up 
to at least 5 % in 2010) till 2015

from 2009, yearly increasing 
obligations (up to  5,83 % in 2010) 
From April 2006 obligation for 
larger filling stations

Yearly increasing obligations (up 
to  5,75 % in 2010) 

2.7

2.8

0.7

0.3 n.a

2.1

1.4

0.3

1.3

13.3

16.7

2.1

1.5

1.2

12.5

0.4

0.5

0.8

0.0

3.4

2.4

1.8

0.6

0.5

4.5

1.1

1.4

0.4

0.1

0.0

0.0

17.6

49.5

1.0

0.1

0.3

2.2

0.0

0.8

0.4

0.0

1.2

2.0

0.5

0.2

0.2

10.9

4.6

2.5

4.0

13.1

4.5

3.0

4.3

100.0

100.0

x trading

From Apr 2008 (yearly increasing 
up to 5 % in 2010/11)

Source: MSs Reports; EBB, Biodiesel Chains (IEE); web news

EN 

19 

   EN 

 
 
It  is  hard  to  assess  which  general  instrument  is  more  successful  in  increasing  demand  for 
biofuels as many factors other that policy measures influence the dynamics of consumption. 
The  next  table  attempts  to  provide  some  analysis  by  putting  together  the  data  on  support 
measures and overall consumption trends. Due to lack of data, only an analysis of biodiesel 
could be provided.  

Table 9: Evolution of the biodiesel consumption in presence of different measures. 

2006 vs 2005

From tax relieves in 2005  to both 
measures (+ 8,8) in 2006
no consumption in 2005 and 2006

no consumption

Always tax relieves (+ 1)
no consumption
no consumption
no consumption
Always both: tax relieves and obligations to 
blend (+ 9,7)

Always tax relieves (+ 58,2)
From no measure in 2005 to tax relieves (+ 
2) in 2006
no consumption
Always tax relieves (0)
From no measure in 2005 to tax relieves 
(0) in 2006
Always tax relieves (0)
From tax relieves in 2005 to both measures 
(+ 0,3) in 2006

no consumption
no consumption
From no measure in 2005 to tax relieves (+ 
1) in 2006
From no measure in 2005 to tax relieves (+ 
3) in 2006

From no measure in 2005 to both 
measures (+ 0,6) in 2006
From tax relieves in 2005 to both measures 
(0) in 2007
Always tax relieves (+ 1,3)
From tax relieves in 2005 to both measures 
(+ 1,8) in 2006
From no measure in 2005 to tax relieves (+ 
0,6) in 2006
Always tax relieves (+ 4,5)

Austria
Belgium 
Bulgaria 
Cyprus

Czech Rep.
Denmark 
Estonia
Finland

France

Germany 

Greece 
Hungary 
Ireland

Italy
Latvia

Lithuania

Luxembourg 
Malta

Poland 

Portugal 
Romania

Slovakia 

Slovenia
Spain 

Sweden

The Netherlands
UK

Growth rate
2006-2005/
2005
%

2007 vs 2006 

Growth rate
2007-2006/
2006
%

72.2

89.3

41.6

43.8

100

50.7

99.8

57.1

83.3

85.5
80.5

Always both: tax relieves and obligations to blend 
(+ 2,1)
Always tax relieves (+ 3,8)

no consumption
From tax relieves in 2006 to obligations to blend (+ 
0,3) in 2007
no consumption
no consumption
no consumption
Always both: tax relieves and obligations to blend 
(+ 24,8)
From tax relieves in 2006 to obligations to blend (+ 
22,6) in 2007 

Always tax relieves (+ 1,4)
no consumption
Always tax relieves (+ 0,8)
From tax relieves in 2006 to obligations to blend 
(0) in 2007
Always tax relieves (+ 0,1)
Always both: tax relieves and obligations to blend  
(+ 1,2)
From tax relieves in 2006 to obligations to blend (+ 
1,4) in 2007
Always tax relieves (0,1)

Always tax relieves (-1)
From tax relieves in 2006 to both measures (+ 3,7) 
in 2007

Always both: tax relieves and obligations to blend  
(-0,6)
Always both: tax relieves and obligations to blend 
(+ 0,4)
Always tax relieves (10,9)
Always both: tax relieves and obligations to blend 
(+ 4,6)
From tax relieves in 2006 to both measures (+ 6,2) 
in 2007
Always tax relieves (+ 11,4)

14.7

19.9

51.5

14.6

41.1

67.0

55.3

78.7

68.3

88.9
51.0

Notes: the figure in brackets represents the absolute variation (in PJ)

Source: PwC based on Member States' Reports and EurObserver's Biofuel Barometer 

An  assessment  of  the  absolute  annual  change  in  the  consumption  of  biodiesel  for  each 
Member  State18  (2006  compared  to  2005  and  2007  compared  2006)  identified  two  main 
policy combinations: 

(a) 

Adoption of a simple tax relief having had no support measure in the previous year 
(only applicable for 2005-2006): this approach was adopted by countries with little 
practical  experience  in  biofuels  (such  as  Greece,  Portugal,  Italy);  countries  with 
experience  of  a  more  directly  supported  approach  through  funds  (such  as  Poland); 
and countries taking a more cautious approach (such as the Netherlands). There was 
little increase in biofuel consumption due to a decrease in indirect taxes in countries 

18 

The assessment excludes non consuming countries (plus Italy, for which there is inconsistency among 
figures). 

EN 

20 

   EN 

 
 
                                                 
with either no empirical habit or in countries accustomed to more incisive systems of 
support.  

(b) 

Adoption  of  a  tax  exemption  and  an  obligation  to  blend  having  had  no  support 
measure in the previous year; or adoption of both measures together, replacing just a 
tax relief.  

Specific support measures 

In  addition  to  general  support  measures,  some  Member  States  also  provide  support  for 
biofuels through specific measures. These policy instruments, including subsidies, often apply 
to either the production or the consumption phase of biofuels.  

The production phase includes measures relating to agriculture such as the production of feed 
stocks  and  to  industry  where  necessary  operations  to  achieve  the  intermediate  and  finished 
product are carried out19. The consumption phase includes measures relating to distribution of 
biofuels;  the  purchase  and  maintenance  of  cars  and  vehicles  utilizing  biofuels;  attempts  to 
increase  the  demand  for  biofuels  through  “green”  public  procurement;  and  campaigns  to 
increase  public  awareness.  The  following  table  summarises  the  Member  State's  different 
specific support measures20. 

19 

20 

Before possible blending with oil products such as fuel (as biofuels can also be utilised pure, according 
to the kind of vehicles which use them), or even as an additive or lubricant. This sub-item also includes 
the  blending  phase  (where  technically  there  are  no  specific  financial  interventions,  apart  from 
government policies which change the required percentage for blending).  
Policies  for  R&D are  not  considered  in  this  section  as  they  aim  to  influence  the  paths  of  technology, 
production and consumption of biofuels in the future, while this section focuses on policies referring to 
contemporaneous  production  and  consumption.  Of  course,  given  the  importance  of  R&D  policies  for 
biofuels of 2nd generation, they are considered later in the report.  

EN 

21 

   EN 

 
                                                 
Table 10: Support measures to specific sectors applied by Member States.  

Measures for 
farmers, other than 
set aside or energy 
crops

Industry

Distribution

Purchase / 
maintenance 
of cars

Green public 
procurement

x

x

x
x
x

x

2008 Austria

2007 Belgium

2007 Bulgaria

2007 Cyprus

Czech Rep
ublic

2007

2007 Denmark

2008 Estonia

2007 Finland

2008 France

2007 Germany  

2008 Greece

2007 Hungary

2008 Ireland

2008 Italy

2008 Latvia

2008 Lithuania

Luxembou
rg

2007

2008 Malta

2007 Poland

2007 Portugal

2008 Romania

2007 Slovakia

2008 Slovenia

2007 Spain

2008 Sweden

The Nether
lands

2008

United 
Kingdom

2008

2006
2007
2006 x   (2)
2007 x   (2)
2006
2007
2006
2007

2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006 x
2007 x
2006
2007
2006 x
2007 x
2006
2007
2006
2007
2006 x
2007 x

2006
2007
2006
2007
2006 x
2007 x
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007

2006
2007

2006
2007

x (1)

x (1)
x
x

x (3)

x (3)

x  (4)

x

x

x

x

x

x

x

x

x

x

x
x

x

x

x

(1)

(2)

(3)

(4)

According to a decree of May 11th 2006 car manufacturers are obliged to give detailed information to consumers of passenger cars. 
It includes the possibility to indicate if the car is warranted for biofuel use or not
The investment support for farmers under the the Flemish Agricultural Investment Fund refers to installations for the production of 
renewable energy sources.However it does not include production of biodiesel or bioethanol.

City of Brussels has installed 4 own tanks for storage for biofuels.

Tax relief (up to 1200 euro) for the cost of purchasing a new flexible fuel vehicle. It is aimed at the owners of captive fleets.

Source: PwC based on MS reports 
Agriculture  

EN 

22 

   EN 

 
 
 
In 2006 and 2007, most of the domestic production of biofuels is estimated to come from set-
aside areas and areas with energy crop aid21. In addition, EU farmers produce a considerable 
amount  of  feedstocks  for  biofuels  outside  any  specific  aid  scheme  related  to  non-food  or 
energy production. 

Table 11: Areas of energy crops within the energy crop aid and set aside scheme (mio 
ha) 

2004 
0.5 
0.3 
Source: European Commission. DG-AGRI 

Total non food land use on set-aside area 
Energy crop aid 

2005 
0.9 
0.6 

2006 
1 
1.3 

2007 
1 
2.8 

From  2004,  in  order  to  enhance  the  production  of  raw  materials  for  energy  production, 
farmers  have  been  eligible  for  the  energy  crops  aid  introduced  within  the  framework  of  the 
direct  payment  support.  Those  crops  are  supplied  essentially  for  the  production  of  biofuels 
and electric and thermal energy. The amount of aid (45€/ha) is now granted for a maximum 
guaranteed area of 2 million hectares. When the claimed area exceeds maximum guaranteed 
area, a reduction coefficient is established in order to respect budgetary ceiling. This was the 
case  of  the  year  2007.  According  to  the  CAP  health  check,  this  aid  will  be  abolished  from 
2010, as the premium has been effective only in very limited circumstances and has not been 
an incentive for production22. 

In addition, farmers were allowed to cultivate energy crops as well as other non-food crops on 
the land set-aside as an exemption from general set-aside obligation23. Under this provision it 
had to be ensured that raw materials harvested were not primarily used for human and animal 
consumption.  Around  1  million  hectares  of  such  land  was  cultivated  in  the  EU  for  energy 
purposes in the period 2005-2007. However, in 2008 the set-aside obligation was set to 0% as 
a  response  to  the  high  commodity  prices  in  2007/2008.  From  2009  compulsory  set  aside 
scheme is repealed as a part of Health check, as the CAP is completing its move away from 
steering agricultural production.  

Apart  from  these  two  market  instruments,  the  CAP  supports  bio-energy  including  the 
production and use of biofuels on and near farms through its Rural Development Policy. The 
Health Check increases funds available to address the new challenges, of which bioenergy is 
one, by 3.2 billion Euros in 2010 to 2013. 

Industry 

Industry support measures mainly relate to the localised transformation of the agro-industry. 
In Cyprus, a grant scheme (which can reach 40% or up to €680,000) finances investments for 
the production of biofuels for transport. In Latvia support of around €271 per 1,000 litres is 
given to biodiesel producers up until 2010. In Lithuania an aid scheme entitled “Aid for the 
Development  of  Production  of  Biodiesel”  promotes  the  use  of  biodiesel  for  6  years; 
manufacturers of rapeseed oil for the production of RME may benefit from direct aid and the 
overall  budget  is  around  €34  million.  In  Poland  the  “Long  Term  Biofuel  Promotion  Project 
2008-2014” is perhaps the most interesting, as it tries to improve the competitiveness of the 

21 

22 
23 

Comparison among years should be cautious: 2004/2005 refers to EU 15, 2006 includes EU 25, 2007 
tries to estimate the whole EU 27 supply.  
Impact Assessment, COM(2008) 306 final 
Set-aside  scheme  has  never  been  applied  in  new  Member  States  using  single  area  payment  scheme 
(SAPS). 

EN 

23 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
entire  biofuel  industry  chain:  cultivation,  production,  distribution  and  end-use  (one  of  the 
measures is corporation tax relief for industry). 

Leaving  aside  the  contributions  that  many  governments  make  to  small  and  medium 
enterprises operating in poor regions or in rural areas, some aid is provided through regional 
entities.  For  example,  in  the  United  Kingdom  the  Scottish  Executive  and  the  Regional 
Development Agencies offer support to operators in the biofuels sector. 

Support  measures  for  the  distribution  sector  are  provided  in  a  few  cases  such  as  in  Sweden 
and the UK. As the Swedish Government relies on the largest filling stations respecting the 
obligation to blend, a subsidy of up to 30% of investment costs relating to the obligation to 
provide renewable fuels (under Act 2005: 1248) has been introduced. (However. this subsidy 
may not exceed the investment cost minus the lowest cost needed to fulfil the requirement). In 
the  UK,  the  Refuelling  Infrastructure  Grant  Programme,  managed  by  the  Energy  Saving 
Trust,  provides  grants  for  installing  alternative  refuelling  points,  including  biofuels  (but  not 
exclusively). According to the most recent Report (1 July 2008), the programme has assisted 
18 bioethanol (E85) refuelling stations and one E95 bioethanol station. 

Interventions are adopted in different Member States to help purchase and maintain specific 
cars  able  to  utilise  a  higher  biofuels  content  than  the  one  accepted  by  car  manufactures.  In 
Cyprus  there  is  a  tax  relief  of  €1,200  towards  the  cost  of  purchasing  a  new  flexible  fuel 
vehicle  (including  electric  and  hybrid  vehicles).  This  measure  aims  to  encourage  the  use  of 
biofuels in captive fleets, especially where fleet owners can produce biofuels from their own 
resources.  The  Irish  Government  has  introduced  Vehicle  Registration  Tax  (VRT)  Relief  for 
hybrid, flexible fuel and electric cars. This is in addition to lower rates of VRT for cars with 
lower emissions and will last until 31 December 2010. At the end April 2008 2,836 flexible 
fuel vehicles had been sold in the market. Maybe the most successful purchase policy is that 
of  Sweden  where  an  eco-friendly  car  sales  policy  offers  lower  taxes  and  subsidises  eco-
friendly cars24 purchased by private individuals. Anyone who bought a new eco-friendly car 
since April 2007 is entitled to a subsidy of SEK 10,000 (€ 93825). As a result, the proportion 
of eco-friendly cars among new car sales increased from 5% in 2005 to almost 30% in 2008.  

Public  procurement  programmes  and  programmes  to  raise  public  awareness  are  common  in 
many  countries.  However,  they  generate  few  “clean”  vehicles  and  often  no  room  is  left  to 
purchase  biofuels  through  continuative  long-term  contracts.  Of  course,  they  are  only  for 
demonstration purposes, as the size of the purchase is too small to provide a substantial outlet 
for the production of biofuels and is too small to trigger economies of scale in the industry.  

However, more active policies are pursued in Sweden and Poland. In Sweden from 2007, 85% 
of cars purchased or leased by state authorities must be eco-friendly and in Poland the “Long 
Term  Biofuel  Promotion  Project  2008-2014”  requires  government  departments  to  gradually 
replace  their  fleets  with  vehicles  able  to  use  liquid  biofuels.  Recognising  the  potential  of 
public procurement as a stimulus for clean vehicle deployment, the Commission proposed a 
Directive on the Promotion of Clean and Energy Efficient Road Transport Vehicles. This was 
adopted by the European Council and the Parliament during the month of October 2008. The 
Directive will shortly enter into force and will require public authorities to introduce energy 
consumption,  CO2  and  pollutant  emissions  as  mandatory  award  criteria  into  public 
procurement of vehicles. It applies to public authorities and publicly owned undertakings and 
to  undertakings  running  public  passenger  transport  services.  As  a  result,  not  only  the  initial 

24 

25 

This policy is applied to fuel efficient cars with CO2 emissions of no more than 120 g/km and vehicles 
that can run on alternative fuels, including biofuels. 
Currency conversion on 7 January 2009 

EN 

24 

   EN 

 
                                                 
first cost of a vehicle, but also the impact it creates during its lifetime on the environment, will 
be reflected in purchase decisions. Flexibility is provided for local authorities on the detailed 
implementation. 

Support policy costs 

Most of the measures Member States have adopted have imposed costs on governments and 
to a lesser extent on vehicle manufacturers, fuels distributors and consumers. The following 
table  attempts  to  compare  the  costs  and  benefits  of  the  two  most  common  general  support 
measures: tax exemptions and obligations to blend. 

Table  12:  Comparison  of  the  costs  and  benefits  of  tax  exemptions  and  obligations  to 
blend.  

Policy measures 

Strengths 

Weaknesses 

Tax exemptions 

•  Easy to implement; 

•  Loss of fiscal revenues; 

•  Few market risks; 

•  Risks  of  overcompensation  (if 

(production 
increases 
according  to  variations  in 
relative prices) 

• 

Incentive for innovation; 

•  Suitable  for 
development 

the  early  stages  of 

high tax reduction); 

•  Strongly dependent on the initial 
levels  of  the  excise  tax:  it  is 
effective  where  these  levels  are 
high 

•  Higher prices for consumers; 

•  Less incentive to innovate; 

•  Higher prices variability; 

•  Difficult 
monitor 

to 

implement 

and 

Blending obligations 

• 

produce 

increases 
(the 
from 
independently 
variations in relative prices) 

It 
injects 
agricultural 
subsequent 
significantly 
agricultural supply) 

certainty 
sector; 
increase 

into 
(unless 
in 
penalises 

the 
the 
prices 
the 

• 

It  does  not  involve  additional  costs 
for public budget; 

•  Suitable  for 

the  more  advanced 

stages of development 

Source: PwC based on MS reports 

It should be noted that in Table 12 the policy measures have been treated as alternatives for 
easier  analysis.  However,  very  often  they  are  implemented  simultaneously  and  therefore 
interact with each other: increasing the overall effectiveness. Obligations alone involve higher 
fuel  prices  at  the  pump,  but  at  the  same  time  they  give  certainty  to  investors  and  industry, 
while guaranteeing the achievement of the target. Excise tax exemptions are then introduced 
to compensate (in part or totally) the extra costs of biofuels, hence leaving the final price at 
the  pump  unchanged.  Conversely,  excise  exemptions  alone  would  keep  prices  at  the  pump 
lower, but they would not guarantee the achievement of the desired objectives (both in terms 
of percentage of blending and reduced CO2 emissions).  

A  tax  exemption  reduces  fiscal  revenues;  and  as  a  consequence,  lower  public  resources  are 
available  for  transfers  and  services.  This  loss  could  be  either  part-compensated  or  over-
compensated by the global social benefits (i.e. positive externality) of lower greenhouse gas 
emissions. 

In addition to the possible increase in the price of fuel for motorists (an increase which has 
been partially offset in some countries like France  and Sweden due to duty exemptions and 
other  income  support  measures)  the  lower  energy  content  of  biofuels  compared  to 
conventional fuels (the energy factor) should be factored in. According to the UK Department 

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for  Transport,  the  implementation  of  the  Renewable  Transport  Fuel  Obligation26  in  the  UK 
would  bring  about  an  additional  annual  disbursement  of  £15-20  (circa  €  16-2227)  and  £4-5 
(circa  €  4-528)  for  petrol  cars  and  diesel  cars  respectively,  travelling  an  annual  distance  of 
9,000 miles (circa 14,500 kilometres), due to the accrued amount of fuel needed to travel the 
same distance as compared to a conventional fuel-propelled car. The additional disbursement 
for motorists is expected to vary from country to country within the EU depending on which 
biofuel has a deeper penetration in each Member States' market and the actual percentage of 
blending. 

Conclusion 

As Table 13 shows, having both an obligation to blend and a tax relief in combination seems 
to be the most successful measure for achieving a significant increase in the consumption of 
biofuels.  However,  at  this  initial  stage,  it  should  be  monitored  over  the  next  years  that  the 
combination of the obligation and tax relief does not lead to overcompensation. 

Table 13: Average annual progress linked to different approaches. 

Shift in the measures used to support biofuels: 

Replacing a tax relief system with an obligation to blend and a tax relief. 
Remaining with just a tax relief. 
Remaining with both measures (tax relief and obligation to blend).  
Replacing a tax relief system with just an obligation to blend.  
Source: PwC based on MS reports 

Average annual growth rate of 
biofuels (%) 
70 
63 
49 
36 

26 
27 
28 

http://www.dft.gov.uk/pgr/roads/environment/rtfo/ 
Currency conversion on 7 January 2009 
ibid 

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3.3. 

Economic impacts 

The following economic impacts are covered: 

costs; 

security of supply; 

employment and GDP impacts; 

development and external relations; 

research and innovation. 

- 

- 

- 

- 

- 

Costs 

The biofuels progress report of 2007 estimated the cost (compared to fossil fuels) of a 7% or 
14% share of biofuels under various framework conditions. 

Estimates of the cost of a 10% share can be derived from these figures. These show that the 
extra  annual  cost  of  this  biofuel  use  in  2020  can  be  estimated  at  €8.8-11.2bn  (with  oil  at 
$48/barrel) or at €4.3-7.6bn (with oil at $70/barrel). 
These figures  are  based on  data from the authoritative JEC well-to-wheels study29. Updated 
cost  figures  from  this  source  are  expected  soon  but  are  not  expected  to  indicate  a  dramatic 
change in the picture. 

These data show how critically the cost of biofuel promotion depends on commodity prices. 
Even though 2008 saw record high oil prices, at times reaching 140$/barrel, preference here 
has  been  given  to  more  conservative  oil  price  assumptions.  The  same  goes  for  agricultural 
commodity prices which also reached high levels in spring 2008, but have since gone down.  

Overall,  the  introduction  of  biofuels  remains  more  costly  than  other  CO2-abatement 
technologies  in  other  sectors,  but  with  today's  technologies  it  still  remains  one  of  the  few 
available solutions to curb the growing CO2 emissions of the transport sector. It is essential 
for further technology development to aim to reduce the production costs of biofuels. 

Security of supply 

Security of supply has been one of the two principal reasons for adopting the EU targets for 
renewable  energy  use  in  transport,  alongside  the  greenhouse  gas  benefits.  Presently,  about 
88%  of  the  global  energy  mix  comes  from  depleting  fuels  and,  with  the  exception  of  the 
nuclear energy (6%), all are carbon-rich fossil fuels such as oil (35%), natural gas (21%), and 
coal (26%) (World Energy Statistics 2008, International Energy Agency (IEA)).  

Based on the data provided in Member States' reports, in 2007 the use of biofuels in the EU 
replaced  1593.1  million  litres  of  petrol  and  7729.9  million  litres  of  diesel.  Currently  that 
represents  less  than  3%  of  the  total  EU  fuel  consumption  in  road  transport.  The  target  for 
renewable  energy  in  transport  in  2010  has  been  set  at  the  level  of 5.75%,  but  with  the  new 
Renewable energy policy framework it will raise to 10% in the next decade.  

Several studies have estimated that from a strict supply-security perspective, increasing global 
demand for biofuels could reduce crude oil prices slightly. Banse et al. (2008) estimated that 
under  an  "increased  global  biofuel"  scenario  (with  a  10%  biofuel  target  in  the  EU  and 
comparable  targets  in  the  US,  Brazil,  South  Africa,  China,  India  and  Japan),  the  crude  oil 

29 

Well-to-Wheels  analysis  of  future  automotive  fuels  and  powertrains  in  the  European  context,  WELL-to-WHEELS  Report: 
http://ies.jrc.ec.europa.eu/WTW 

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price would decline by 1.5 per cent.30 Similarly, Dixon et al. (2007) estimated a decline in the 
world crude oil price of 4.5 per cent due to US biofuel policies31.  

Employment and GDP 
According  to  JRC  (2007)32,  achieving  the  EU's  2020  10%  renewable  transport  fuel  target 
would create additional employment estimated at €1.8 billion in distributed salaries over the 
2007- 2020 period. 

The  development  of  the  biofuels  industry  will  mostly  benefit  rural  areas.  The  Commission 
estimated in its previous biofuels progress report33 that a 10% biofuels market share produced 
from home grown feedstock would lead to a net increase in the EU of 150.000 jobs and an 
increase in EU GDP of at least € 25 billion, equal to 0.17% of current GDP.34 

The ongoing "EmployRES" study, commissioned by the Commission, has found that among 
all  renewable  energy  technologies  the  largest  employers  in  the  EU  were  the  biomass  and 
biofuels sectors (data on 2005)35. Out of a total 1.4 million people employed in the renewable 
energy  sector,  non-grid  biomass  use  accounts  for  600,000  employees,  biomass  grid  and 
biofuels contributed over 100,000 employees and biogas around 40,000. This is because the 
biomass  and  biofuel  sectors  are  more  labour  intensive  than  other  renewable  energy 
technologies. In addition, agriculture and forestry play an important role in supplying the fuel 
for  biomass  technologies.  Agricultural  activity  related  to  the  renewable  energy  sector 
generates  gross  value  added  of  well  over  €9bn  per  year.  The  value  added  from  increased 
renewable fuel use was estimated at around €14.6 billion in 2005 and the value added of the 
renewable energy sector overall is around €57 billion in 2005 or 0.5% of total EU-27 GDP 
A  recent  UNEP  and  ILO  report:  Green  Jobs36  estimated  that  in  2007  the  total  world 
investment  in  renewable  energy  reached  $66  billion,  equivalent  to  18%  of  all  energy 
investment and could reach $343 billion by 2020. These investments would translate into at 
least  20  million  additional  jobs  world-wide;  a  large  proportion  in  biomass  and  biofuels, 
including jobs in developing countries. This would make the sector a much larger source of 
employment  than  today's  fossil  energy  industry  (mining.  petroleum  extraction.  refining  and 
fossil power generation); which, in spite of rising production, has been shedding jobs due to 
technological advances.  

The  increase  in  biofuels  production,  apart  from  stimulating  agricultural  production  and 
research  and  development,  will  trigger  additional  investment  in  bio-refinery  plants  and  the 
adaptation  of  conventional  fuel  refineries  (new  facilities  for  storage  and  blending  purposes) 
and  petrol  filling  stations  (additional  tanks  and  new  pumps  for  pure  biofuels  or  high-
percentage  biofuel  blends).  These  investments  will  create  new  jobs  both  directly  (mostly  in 
bio-refinery  plants)  and  indirectly  through  the  investments  multiplier  effect.  Moreover, 

30 

31 

32 

33 

34 
35 

36 

Martin Base, Hans van Meijl, Andrzej Tabeau and Geert Woltjer Will EU biofuel policies affect global 
agricultural markets?, LEI, Wageniningen UR, 2008 
Dixon,  P.B.,  Osborne,  S.  and  Rimmer,  M.T.  The  economy  –wide  effects  in  the  United  States  of 
replacing crude petroleum with biomass, June, 2007 
Biofuels  in  the  European  Context:  facts,  uncertainties  and  recommendations  JRC  working  paper, 
December 2007 
Biofuel Progress Report, Review of economic and environmental data for the biofuels progress report, 
Commission Staff Working Document, Sec (2006) 1721. 
Renewable Energy Roadmap impact assessment. 
Employ RES project: Employment and economic growth of sustainable energies in the European Union 
led by Fraunhofer ISI (An ongoing study commissioned by European Commission , DG TREN). 
Green Jobs, by UNEP, ILO and others, produced by Worldwatch Institute, September 2008 

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personnel  already  employed  in  the  conventional  fuel  industry  will  need  re-training  to  deal 
with the handling, blending and commercialization of biofuels.  

Development and external relations 

As  noted  earlier,  it  is  likely  that  the  growing  biofuels  demand  will  be  met  in  part  through 
imports.  Prospective  access  to  European  markets  has  considerably  increased  developing 
countries' interest in biofuels. At the same time, rising food prices have also created concerns 
about the sustainability of biofuels production and its impacts on food availability in world's 
poorest  regions.  Although,  it  is  important  to  point  out  that  prices  have  subsequently  fallen 
back, at present it is not possible to predict with sufficient accuracy their future trends. 

The  rise  in  demand  for  biofuels  and  current  biofuel  support  policies  have  sometimes  been 
suggested as key factors in food price increases, especially in the wake of commodity price 
increases in the first half of 2008. In its Communication on high food prices37 adopted on 20 
May 2008, however, the Commission found that current EU biofuel production and the new 
2020 10% renewable transport fuel target had little impact on current global food prices. This 
was because biofuels use less than 1% of EU cereal production and long lead-times make it 
unlikely that they could have had an impact on today's prices. 

These findings were confirmed in another communication on Food Prices in Europe adopted 
on  December  2008  following  additional  analysis  on  the  reasons  behind  recent  food  price 
fluctuations.  In  this  communication  the  Commission  confirmed  that  that  the  surge  in 
agricultural  commodity  prices  resulted  from  a  combination  of  structural  and  temporary  factors, 
among which, the emerging biofuels market had a rather insignificant impact38.  

In  order  to  respond  to  the  food  price  concerns  and  to  create  additional  safeguards  against 
possible  negative  impacts,  the  newly  established  biofuels  sustainability  scheme  in  the 
Renewable  Energy  Directive  contains  a  set  of  monitoring  and  reporting  requirements, 
including  food  price  and  food  availability  impacts  in  the  EU  and  third  countries,  which  are 
significant sources of biofuel imports into the EU. 
According to Faaij39, bioenergy production will nearly always compete with food production 
including  feed.  However,  improved  bioenergy  production  systems  that  allow  for  synergies 
with  food  production  exist  and  can  provide  significant  benefits.  For  example,  intercropping 
jatropha with annual food crops can potentially increase food yields, while at the same time 
producing biomass for energy; and agro-forestry systems can deliver both food and biomass 
for construction, fibre and fuel use, as well as secure high levels of biodiversity.  

The  relationship  between  bioenergy  and  food  production  depends  on  developments  in  the 
agricultural  sector  and  consequent  variations  in  agricultural  productivity.  Higher  prices  for 
food products or strategies to stimulate development in agricultural management might lead to 
an  increase  in  agriculture  efficiency  as  increased  demand  leads  to  higher  investments.  As  a 
result, food production could improve using less of the resources at hand for the production of 
a given amount of bioenergy. 

37 

38 

39 

Commission's Communication Tackling the challenge of rising food prices, adopted on 20 May 2008, 
COM(2008) 321 final 
Commission's  staff  working  document  "Monitoring  prices  developments" 
(SEC(2008)2970) 
accompanying Communication on Food prices in Europe, adopted on 9 December 2008, COM(2008) 
821  
André Faaij: Bioenergy and global food security, 2008 

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In 2007, about one fourth of biodiesel and almost a third of bioethanol consumed in the EU 
was  imported.  Most  of  those  imports  came  from  Brazil  and  the  USA.  South  Africa  and  the 
Democratic Republic of Congo also exported some bioethanol to the EU.  

The  EU  has  developed  a  Free  Trade  Agreement  Partnership  with  a  bloc  of  East  African 
Countries by negotiating Economic Partnership Agreements (EPA) on a bilateral basis and the 
negotiation  of  an  EPA  is  underway  with  Tanzania.  EPAs  will  affect  policy  development  in 
those countries and the biofuels feedstock sector may be influenced. EPAs could be strategic 
for  the  EU  biofuels  policy,  given  the  remarkable  potential  of  East  African  Countries  to 
produce  jatropha.  Particularly  favourable  land  properties  and  climatic  conditions  for  the 
production  of  jatropha  are  already  attracting  Foreign  Direct  Investments  to  East  African 
Countries (Tanzania and Ethiopia in particular).  

Currently no specific classification and dedicated tariff lines exist for biodiesel and bioethanol 
The  former  is  classified  as  “other  chemicals.”  while  the  latter  is  an  agricultural  by-product. 
This situation could change in near future, if and once a dedicated tariff line is established for 
biodiesel. 

The current tariff regime on biofuel feedstock and biofuel also has some impact on the biofuel 
prices in the EU. Although the Most Favoured Nation (MFN) tariffs on ethanol are very high 
and  generally  higher  than  those  applied  to  biodiesel.  African,  Caribbean  and  Pacific  (ACP) 
countries  (except  South  Africa),  the  Least  Developed  Countries  (LDCs)  and  all  those 
countries eligible for the Generalized System of Preferences Plus (GSP+) tariffs can benefit 
from  duty  free  and  quota  free  access  to  the  EU  market  for  ethanol.  The  new  GSP  system 
(effective from January 2006) also allows Pakistan unlimited access to the EU ethanol market. 

Current biofuels imports are not subject to any formal sustainability requirements, although a 
number of voluntary certification systems do exist. This will change with the entry into force 
of the new biofuel sustainability scheme included in the Renewable Energy Directive. Biofuel 
producers,  fuel  distributors  and  Member  State  authorities  will  be  held  responsible  for  the 
entire production chain of biofuels, whether domestically produced or imported.  

Research, innovation and promotion of second generation biofuels 
According  to  the  IEA's  2006  World  Energy  Outlook40,  the  cost  of  producing  biofuels  has 
reduced by 5-10% over the last 10 years and the costs of producing bioethanol and biodiesel 
are expected to diminish by a further 25-50% and 20-25% respectively over the next 10 years. 
According to the same study, the cost of producing biodiesel in Europe is projected to drop 
from  US$0.60/litre  to  US$0.40/litre  by  2030  due  to  the  economies  to  scale  achievable  by 
using bigger plants. The cost of bioethanol production is projected to drop by around 30% by 
2030 compared to its cost of production in 2005. Such improvements depend on research and 
development and the rate of growth of the production capacity of biofuels plants.  

According  to  the  same  source,  the  cost  of  producing  second  generation  biofuels  (such  as 
enzymatic  hydrolysis  and  gasification  of  lingo-cellulosic  biomass)  is  likely  to  drop  to  $40-
50/barrel41  in  the  decades  to  come  making  biofuels  competitive  with  conventional  fuels  by 
203042. 

40 
41 
42 

Source: IEA, World Energy Outlook (2006). 
Source: IEA, World Energy Outlook (2006). 
The  price  of  crude  oil  that  has  been  assumed  in  the  WEO  (2006)  for  2030  (reference  scenario)  is  $ 
97,30 per barrel. 

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Another view can  be obtained  by assessing the demonstration plants that have been built in 
Germany to test the production of diesel via Fischer-Tropsch synthesis43. As of 2006, the cost 
of producing biodiesel through this technology was $0.90/litre, with the perspective to reduce 
it to $0.70-0.80/litre in the long-term44. 

Under the Sixth Framework Programme (2002-2006) almost €35 million were made available 
to support the research and development of biofuels, of which €5 million for the development 
of second generation biofuels technologies.  

In  the  Seventh  Framework  Programme  €59  million  have  been  allocated  for  biofuels  in  the 
first two calls in 2007 and 2008. The largest part of this amount - €51 million or 86% - has 
been allocated to 2nd generation biofuel technologies. Furthermore in 2009 an additional €15 
million will be allocated to bio refinery projects45. 

In  addition,  Member  States  support  national  research  programmes  in  biofuels  technologies. 
For  instance,  Denmark  has  focused  its  efforts  in  financing  research  in  ligno-cellulosic 
processes  to  produce  bioethanol  from  the  waste  from  agriculture,  forestry  and  the  timber 
industry.  Spain  has  launched  the  CENIT  biodiesel  initiative,  a  four-year  research  and 
development  project  managed  by  the  private  sector  and  financially  supported  by  the 
Government,  which  aims  to  identify  new  raw  materials  and  to  develop  new  processes  and 
technologies to produce biodiesel. 

3.4. 

Environmental impacts  

Assessment of the life-cycle greenhouse gas impact of biofuels 

The  analysis  presented  here  assesses  the  greenhouse  gas  savings  due  to  EU  biofuel 
consumption. 

The analysis was based on the most recent JEC data on typical greenhouse gas reductions.  

Member  States'  data  on  biofuel  production/consumption  were  disaggregated,  as  far  as 
possible, by feedstock46 and JEC typical greenhouse gas values were applied to determine the 
amount  of  greenhouse  gas  savings  for  each  type  of  feedstock  for  each  Member  State. 
Reflecting the future requirements of the Renewable Energy Directive, the analysis was done 
in duplicate, using both the energy allocation method and the substitution method to account 
for co-products.  

At  an  aggregated  level,  the  EU-27  had  a  biofuel  share  of  2.6%  in  2007  and  an  average 
greenhouse  gas  saving,  relative  to  the  fossil  fuels  replaced,  estimated  at  49%  (energy 
allocation method) or 48% (substitution method).  

43 
44 

45 

46 

See Kutas et al 
2nd  generation  biofuels  based  on  the  gasification  of  biomass  to  produce  liquid  fuel,  seem  to  be  a 
promising  way  to  obtain  significant  greenhouse  gas  savings.  Across  Europe,  different  Biomass  to 
Liquid  (BtL)  technologies  are  under  development.  Table  26  in  Annex  D  summarises  the  BtL  plant 
projects  planned  by  the  RENEW  project  partners.  Based  on  the  announced  plans  of  companies 
developing 2nd-generation biofuel facilities, the first fully commercial-scale operations could possibly 
commence  as  early  as  2012.  However,  given  the  complexity  of  the  technical  and  economic  issues 
involved, the first commercial plants are unlikely to be deployed before 2015. Therefore, at present, it is 
difficult  to  estimate  the  potential  greenhouse  gas  emissions  savings  from  increased  share  of  2nd 
generation biofuels. 
These  budget  allocations  only  refer  to  the  biofuel  and  biorefinery  support  projects  managed  by  DG 
TREN. A part of energy budget under Sixth and Seventh Framework programmes is managed by DG 
RTD.  
Source: PwC data based on Member State's reported feedstocks  

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Focusing  on  the  physical  savings  in  terms  of  CO2eq,  the  5611  ktoe  of  biofuels  consumed  in 
2006  and  8105  ktoe  consumed  in  2007  can  be  translated  into  greenhouse  gas  emissions 
savings.  The  life  cycle  greenhouse  gas  emissions  associated  to  traditional  fuels  is  83.8 
gCO2/MJ (energy allocation method). If the above mentioned coefficients are applied, in 2006 
and 2007 respectively 19.7-20.3 and 28.4-29.4 Mt CO2eq which would have been emitted in 
the atmosphere from fossil fuels, have been avoided. However this gross saving exaggerates 
the  benefits,  since  emissions  from  the  production  of  biofuels  should  be  deducted.  The  net 
saving  can  be  calculated  by  multiplying  these  gross  savings  by  the  average  percentage  of 
emissions saved by biofuels (48%-49%). One can then calculate the net savings achieved in 
the European Union from biofuels placed on the market and consumed: 

9.7 (energy allocation/substitution) Mt CO2-eq. in 2006  
14.1 (energy allocation) / 14.0 (substitution) Mt CO2-eq. in 200747.  

Land use 

Most biofuels are made from crops. The promotion of biofuels therefore leads to an increase 
in  demand  for  agricultural  commodities.  Such  increases  in  demand  can  be  met  through 
increased land use for agriculture or through increased yields from land already in agricultural 
use. If the increase in demand is partly met through land conversion and if the land converted 
has a high carbon stock, this process would lead to greenhouse gas emissions that offset the 
greenhouse gas benefits from the use of biofuels. 

In  the  EU,  arable  land  has  been  falling  out  of  agricultural  use  for  decades.  That  process  is 
continuing. In terms of land use, the main effect of EU biofuel consumption has been the re-
use of recently abandoned agricultural land, or a reduced rate of land abandonment. Recently 
abandoned  agricultural  land  does  not  have  a  high  carbon  stock.  It  follows  that  to  date.  EU 
biofuel  consumption  is  not  likely  to  have  caused  significant  damaging  land  use  change.  In 
fact, it is more likely to have brought benefits in this respect, since the crops used in the EU 
for biofuel production produce, at the same time, significant quantities of co-products that are 
used as animal feed. This mainly replaces animal feed from soya, which has been associated 
with damaging land use change notably in Latin America. 

For  the  future,  biofuels  from  certain  defined  types  of  high  carbon  stock  land  will  not  count 
towards  the  targets  in  the  Renewable  Energy  Directive  and  will  not  be  eligible  for  public 
support. Moreover, the greenhouse gas calculation methodology in the Directive will ensure 
that the carbon stock cost of converting other types of land is fully taken into account. Since it 
is expected that biofuels fulfilling the sustainability criteria will command a premium price, 
these measures will tend to increase producers' reliance on yield increases rather than land use 
increases to meet increased demand. 

This  does  not  rule  out  the  possibility  of  increased  demand  for  agricultural  commodities  for 
biofuels leading to an overall increase in the damaging conversion of land, even if the biofuels 
themselves do not come from this land. The Directive therefore requires the Commission to 
report, by 2010 at the latest, on how best to address this issue. 

Other environmental impacts of biofuels 

The  production  of  biofuel  feedstock  can  have  environmental  effects  beyond  the  impacts  on 
greenhouse gas emissions, such as impacts on biodiversity, water consumption, water quality 
and soil quality. The extent and character of these impacts varies according to factors such as 

47 

The figures are derived by the JEC method, which is not a real substitution method, which would not be 
possible to use for fuels produced in refineries. 

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agro-climatic make up; land-use patterns; feedstock; rainfall patterns; scale of production; and 
long and short time scales.  

Biodiversity  

Published  studies  on  the  biodiversity  impacts  of  growing  bio-energy  crops  are  diverse  and 
have  conflicting  results.  This  is  due  to  the  different  time  horizons  (short  or  long  term)  and 
scales of observation (local. regional or global) used. 

Therefore, the integral global impacts of biofuels on biodiversity depend mainly on the long-
term  positive  effect  of  reduced  future  climate  change  and  the  short-term  negative  effect  of 
land-use  change  for  large  scale  energy  crop  cultivation  rather  than  nature.  In  determining 
whether short-term losses can be balanced by long-term gains, uncertainties should be taken 
into account48. 
Water consumption  
The ideal study on biofuel impacts on water consumption does not exist as several diverging 
aspects  have  to  be  considered.  Water  availability  and  water  use  can  be  assessed  at  a  crop, 
farm, river basin, continental and global scale. Each scale has its own parameters for reliable 
calculations and estimates and its own assessment targets. Water use for bioenergy production 
has  to  be  compared  with  actual  water  use  and  existing  or  expected  bottlenecks  for  water 
availability need to be identified. As priority is often given to the other uses (food, domestic 
and industrial water use), all uncertainties and inaccuracies accumulate in the final assessment 
of the scope for energy crops. 

Different  studies  show  that  in  some  regions  abundant  water  availability  provides  ample 
opportunities  for  energy  crop  production,  while  water  scarcity  in  other  regions  is  seriously 
restricting any opportunity for energy crops.  

A  rough  estimate  of  available  blue  water  for  energy  crops,  based  on  global  water  flows,  is 
1,300  to  5,000km³,  depending  on  the  share  required  for  environmental  water  requirements 
(50-20%).  However,  whether  this  water  is  available  and  can  be  used  cannot  be  determined 
based  on  available  studies.  Future  change  in  rainfall  patterns  will  have  a  large  impact 
regionally49. 
Water pollution  
Producing more biofuels crops may affect water quality. For example, if (unlike the current 
EU  experience)  additional  demand  for  biofuels  were  to  be  met  by  converting  pastures  or 
woodlands into crop fields, this could exacerbate problems such as soil erosion, sedimentation 
and  excess  nutrient  run-off  into  surface  waters  and  infiltration  into  groundwater  from 
increased  fertilizer  application.  Pesticides  and  other  chemicals  can  wash  into  water  bodies 
negatively affecting water quality. However, it is worth noting that different biofuel feedstock 
differ  markedly  in  their  fertilizer  and  pesticides  inputs  per  hectare.  For  example,  high-
diversity  prairie  biomass  is  estimated  to  require  only  a  fraction  of  the  nitrogen,  phosphorus 
and pesticides required by maize with correspondingly lower impacts on water quality50.  

48 

49 

50 

Climate  change,  scientific  assessment  and  policy  analysis,  biomass  assessment,  assessment  of  global 
biomass  potentials  and  their  link  to  food,  water,  biodiversity,  energy  demand  and  economy,  Main 
report. January 2008. Editors Erik Lysen Sander van Egmond. 
Climate  change,  scientific  assessment  and  policy  analysis,  biomass  assessment,  assessment  of  global 
biomass  potentials  and  their  link  to  food,  water,  biodiversity,  energy  demand  and  economy,  Main 
report, January 2008. Editors Erik Lysen Sander van Egmond 
FAO, the State of Food and Agriculture, Biofuels: prospects, risks and opportunities, Rome, 2008. 

EN 

33 

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Soil resources 

Both land-use change and intensification of agricultural production on existing croplands can 
have  significant  adverse  impacts  on  soils,  but  these  impacts  (just  as  for  any  crop)  depend 
critically  on  farming  techniques.  Inappropriate  cultivation  practices  can  reduce  soil  organic 
matter  and  increase  soil  erosion  by  removing  permanent  soil  cover.  The  removal  of  plant 
residues  can  reduce  soil  nutrient  contents  and  increase  greenhouse  gas  emissions  through 
losses of soil carbon. In the EU, production of rape seed for biofuels has tended to diversify 
crop rotations, with beneficial effects. 

On  the  other  hand,  conservation  tillage,  crop  rotations  and  other  improved  management 
practices  can,  under  the  right  conditions,  reduce  adverse  impacts  or  even  improve 
environmental  quality  in  conjunction  with  increased  biofuel  feedstock  production.  Growing 
perennials  (such  as  palm,  short-rotation  coppice  or  sugar  cane)  instead  of  annual  crops  can 
improve soil quality by increasing soil cover and organic carbon levels. In combination with 
no-tillage and reduced fertilizer and pesticide inputs, positive impacts on soil resources can be 
obtained51. 
Air quality  
Prospective biofuels offer a number of distinct advantages relating to air pollution. Blending 
bio-diesel  with  conventional  diesel  in  engines  results  in  substantial  reduction  of  un-burnt 
hydrocarbons,  carbon  monoxide  and  particulate  matters  (the  only  negative  is  a  NOX  value 
which  is  higher).  Biodiesel  also  contains  no  aromatic  compounds.  Current  EU  diesel 
requirements  set  a  maximum  sulphur  content  of  10ppm.  There  is  no  clear  evidence  of  any 
increase in efficiency or reduction in GHG emissions. However the Commission is currently 
studying these issues. 

51 

FAO the State of Food and Agriculture, Biofuels: prospects, risks and opportunities, Rome, 2008. 

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Conclusion 

From an environmental perspective, it is estimated that. the current achieved net greenhouse 
gas  savings  achieved  in  the  European  Union  from  biofuels  placed  on  the  market  and 
consumed  (in  2006  and  2007)  amounted  to  23.8  Mt  CO2-eq.  This  takes  into  account  the 
estimated  impact  of  associated  land  use  change,  bearing  in  mind  that  most  EU  biofuel 
consumption has been fulfilled through the re-use of recently abandoned agricultural land or 
through slowing down the rate of land abandonment.  

Turning  to  broader  environmental  impacts,  biofuel  production  contributes  to  an  increased 
extent  and  intensity  of  agricultural  production  in  the  EU.  This  can  have  both  positive  and 
negative environmental effects. In particular, increased pressure on the use of land with high 
biodiversity value and soil carbon stock may be expected, together with a higher incentive to 
use  more  fertilizer  per  hectare.  On  the  other  hand  land  abandonment  should  slow  down, 
particularly in disadvantaged and environmentally sensitive rural regions. This should have a 
positive  effect  in  terms  of  erosion  and  fire  prevention,  landscape  and  biodiversity 
maintenance. The Commission is not aware of specific reasons for concern in relation to the 
impact  of  biofuels  in  this  respect.  However,  under  the  new  Renewable  Energy  Directive, 
economic operators and Member States will be required to report in more detail on the land 
use changes and other environmental impacts from increased production of biofuels.  

While this analysis confirms the positive impact of the policy to date, the last progress report 
made it clear that it is essential for the further expansion of biofuels to be accompanied by the 
introduction  of  appropriate  sustainability  criteria.  Such  criteria  are  included  in  the  new 
Renewable  Energy  Directive,  covering  minimum  requirements  for  greenhouse  gas  savings, 
requirements to avoid damaging land use change and reporting requirements covering a wide 
range of environmental and social issues. 

3.5. 

Further measures needed in the transport sector 

Under the provisions  of  Directive 2003/30,  this progress  report should review options other 
than biofuels for improving energy efficiency in transport. 

Any  measure  aimed  at  improving  the  environmental  performance  of  new  cars  (from 
increasing  their  energy  efficiency  to  substitution  with  hybrid,  electric  or  hydrogen  vehicles) 
will affect greenhouse gas emissions and fuel consumption of the new European car fleet. The 
average  number  of  new  registrations  between  2003  and  2007,  was  15.2  million  passenger 
cars/year  compared  to  a  stock  of  230  million  cars  in  2006.  Measures  aimed  at  reducing  the 
consumption  of  the  whole  stock  of  cars,  like  “eco-driving”,  increasing  car  occupancy  rates 
and  improving  traffic  infrastructures  have  a  larger  potential  in  terms  of  greenhouse  gas 
emission  and  fuel  saving,  but  require  a  coordinated  effort  at  local,  regional  and  central 
government levels in terms of policies, support and communication. 

The  following  table  provides  an  estimation  of  possible  greenhouse  gas  emissions  savings, 
fossil fuel savings and monetary cost and benefits of different "green transport" measures. 

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35 

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Table 14: Summary of options concerning energy efficiency measures in transport. 
Measure 
scope 

Monetary costs and benefits 

GHG saving 
(MtCO2) 

Measure detail 

New 
passenger 
cars 

Increasing the 
efficiency of ICE cars 
from 160 to 130 g 
CO2/km and from 6.4 
to 5.2 l/100 km 
consumption 
Hydrogen (only zero 
carbon hydrogen 
considered here) 

Electric Cars 

Hybrid vehicle. in the 
hypothesis of 50% 
penetration of new 
cars in 2012 (3.% of 
the whole stock) 

Eco-driving 

Whole 
passenger 
car stock 

Fossil fuel 
saving 
(Mtoe) 
1.2 to 1.76 in 
2012 

.Depending 
on how 
hydrogen 
will be 
generated. 

Depending 
on where the 
electric 
energy is 
sourced 

3.7 to 5.4 in 
2012 

Up to 15 
MtCO2 
saved in 
2020 in the 
hypothesis of 
5% new cars 
fuelled by 
zero carbon 
Hydrogen 
Depending 
on where the 
electric 
energy is 
sourced 

2.7 to 3.9 
additional to 
1) 

0.36 to 0.53 
additional to 
1) 

50 MT as 
theoretical 
potential  

Long term 
effect of 7% 
saving under 
everyday 
driving 
conditions 
8 Mtoe57  

25 MT 

Increase of car 
occupancy rate 
(assumption of a 0.05 
increase of the Car 

Saving of up to 200€/year for drivers 
due to reduced consumption  
Additional cost of 3500€/car for the 
120gCO2 /kmtarget or 2500€/car for 
the 130gCO2/km over a period of 6 
year52 
Additional cost per vehicle of €5-
10000. 
Between €2 and €3 per 100 km53 

Electric vehicles may cost up 2-3 
times more than conventional ones. 
Cost may be greatly reduced by mass 
production. Batteries to be replaced 
every 2-3 year at the cost of €2300-
4000.54  
Additional cost per vehicle of around 
€3,100 
Saving of up to €280 year for drivers 
due to reduced consumption55  

Saving of up to 128€/tCO2 due to 
reduced consumption.56  

52 

53 

54 
55 

56 
57 

PwC calculation based on the assumption of an average mileage of 15000 km/y per vehicle and from ACEA 2007: 
Reducing co2 emissions from cars: towards an integrated approach 
EUCAR,  JRC,  CONCAWE  (2007),  Well-to-wheels  analysis  of  future  automotive  fuels  and  powertrains  in  the 
European  context;  DGTREN,  2003,  Hydrogen  Energy  and  Fuel  Cells  A  vision  of  our  future,  p.15; 
http://www.hyways.de/. HyWays presentation, 8 May 2007) 
Electric Auto Association Europe: http://eaaeurope.org/emissions_of_eas.html) 
PwC  calculation  obtained  by  comparing  the  average  performance  of  vehicles  belonging  to  the  most 
common and representative cluster in Europe with the performance of the hybrid model belonging to 
the  same  category  by  body  type  and  cubic  capacity:  Honda  Civic  Hybrid  as  2/4  Door  Sedan  up  to 
1500cc  and  Toyota  Prius  as  5  Door  Sedan  up  to  1500cc;  Sources:  Clean  Green  Cars  Website: 
http://www.cleangreencars.co.uk/,  Quattrouote  Website:  http://www.quattroruote.it/;  “Alternative  Fuels:  An 
Energy Technology Perspective” IEA/ETO. Hybrid Cars Website: http://www.hybridcars.com 
ACEA 2007: Reducing CO2 emissions from cars: towards an integrated approach 
PWC calculation on the basis of data from ICARO: (Increasing Car Occupancy): A Research And Demonstration 
Programme On Car-Pooling, European Commission DG VII, 1999) and from DG-TREN data (DG-TREN 2008.EU 
energy and transport in figures Statistical pocketbook 2007/2008 

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Occupancy Rate) 
Improvement of traffic 
lights  
1st generation 

Up to 2.4 
MT/y 58 
25.7 MT 

18.3 Mtoe59 

2nd generation 

In 2020 

Increase 
Biofuel 
consumption 
up to 5.75% 

Source: PwC  

In the two years since the last biofuels progress report, the Commission has taken a number of 
initiatives  to  make  the  European  transport  sector  greener.  The  new  CO2  emission  reduction 
strategy,  including  specific  targets  for  all  new  cars  sold  in  the  EU,  was  adopted  by  the 
Commission  on  31  January  200760.  On  the  same  date,  the  European  Commission  also 
proposed  to  revise  the  EU  Fuel  Quality  Standard.  Both  of  these  proposals,  which  were 
endorsed  by  the  Council  and  Parliament  in  December 2008, will  enable the EU  to  reach its 
long-established objective of limiting average CO2 emissions from new cars to 120 grams/km 
by 2012. This will not only reduce CO2 emissions by around 25% from 2008 levels but will 
also improve fuel efficiency, delivering substantial fuel savings for drivers.  

THE IMPLEMENTATION OF THE BIOMASS ACTION PLAN 

4. 
According to the latest data available from Eurostat61, 88 Mtoe of biomass was consumed for 
energy purposes (primary energy consumption) within the EU-27 in 2006, representing an 8% 
increase from 2005. In terms of final energy consumption, around 58 Mtoe was consumed in 
2006- around 5% of total energy consumption62.  

This achievement is still a long way from reaching the EU's biomass potential identified in 
the EU Biomass Action Plan.  

Biomass  for  electricity  (including  biogas)  and  biomass  for  transportation  fuels  have  grown 
faster  than  biomass  for  heat,  due  to  clear  targets  set  for  renewable  energy  used  in  transport 
and electricity. Electricity production using solid biomass has increased annually at a rate of 
around  10%  since  2004.  The  EU  owes  this  increase  principally  to  the  development  of 
electricity resulting from co-generation (combined heat and power) in Germany, Finland and 
Sweden and in particular to the use of biogas in cogeneration, which represented around 60% 
of electricity production from biogas in 200763. 

58 
59 

60 

61 
62 

63 

ACEA 2007: Reducing CO2 emissions from cars: towards an integrated approach 
PWC calculations based on GHG values contained in  the  EU  Commission  Proposal  for  a  Directive  on  the 
promotion of the use of energy from renewable sources (January 2008) 
Communication from the Commission to the Council and the European parliament, 2007. Results of the 
review of the Community Strategy to reduce CO2 emissions from passenger cars and light-commercial 
vehicles. 
2006 
Primary  energy  consumption  refers  to  the  consumption  of  energy  sources  like  biomass  before 
conversion  to  other  forms  of  energy  (electricity,  heat,  transport  fuel),  and  final  energy  consumption 
refers to energy consumed after conversion into other forms of energy and excludes the use of energy 
sources for non-energy purposes, such as self-consumption by power plants and losses.  
Biogas Barometer, No 186-2008 

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37 

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Availability of biomass 

4.1. 
Projections using modelling by PRIMES64 and Green X65 estimate that around 165-195 Mtoe 
of biomass would be used in 2020 to achieve the 20% renewables in primary energy target. 
The Environment Energy Agency (EEA) report of 200666 concluded that significant amounts 
of biomass can be theoretically available to support ambitious renewable energy targets. 190 
Mtoe  in  2010  and  235  Mtoe  in  2020  is  deemed  feasible  even  if  strict  environmental 
constraints are applied (e.g. no conversion of permanent grassland), although the report does 
not look at the economics of harvesting/producing the additional biomass resources or at the 
measures needed to ensure that this potential is realised.  

Many  other  studies  have  assessed  biomass  resource  availability  in  the  EU-27.  A  European 
Commission funded review of over 70 studies67 found that total 2020 potentials estimated for 
the EU-27 differ to a considerable degree: 76 Mtoe - 480 Mtoe. The wide range is mainly due 
to  ambiguous  and  varying  methods  of  estimating  biomass  production  and  different 
assumptions that influence potentials (such as land use for food and fibre purposes).  

Further  studies  are  being  carried  out  in  the  meantime,  in  particular  to  better  estimate  the 
potential wood supply in the EU. In addition, the increasing potentials and benefits for using 
biomass wastes and forest and agricultural residues and of new innovative processes such as 
bio-refineries should not be underestimated. However, any risks of overuse of forests should 
be  assured  and  all  EU  Member  States  have  signed  up  to  the  Ministerial  Conference  on  the 
Protection  of  Forests  in  Europe  (MCPFE),  where  the  guiding  principle  is  sustainable  forest 
management.  

Any  policy  or  action  plan  to  increase  the  use  of  biomass  must  therefore  ensure  a  certain 
degree  of  harmonisation  of  information  and  data  on  biomass  so  as  to  improve  the  accuracy 
and comparability of future biomass resource assessments. 

4.2. 

Actions taken to increase the availability and use of biomass 

National  biomass  strategies  have  a  key  role  in  achieving  the  20%  renewable  energy  target, 
ensuring  the  long-term,  sustainable  supply  of  biomass  resources  and  in  increasing  investor 
confidence in biomass and biomass technologies. One of the main actions identified in the EU 
BAP was to encourage Member States to develop national Biomass Action Plans. An expert 
group68 was set up in 2006 to discuss how to achieve a coherent and coordinated approach on 
bioenergy  and  to  share  experiences  on  national  approaches  to  data  collection,  on  support 
schemes etc. 

Another important element is addressing the different uses of biomass as these resources can 
be used for a variety of purposes and in a variety of ways, some of which are more efficient 
than others. The International Risk Governance Council69 agrees that the trade-offs involved 
in making decisions regarding bioenergy policies are context-specific and. Therefore, require 
different  approaches  in  different  countries.  Governments  therefore  must  design  and 

64 

65 
66 

67 

68 
69 

SEC(2008)85 Annex to the Impact Assessment accompanying the package of implementation measures 
for the EU's objectives on climate change and renewable energy for 2020 
COM(2006)848 Biomass Action Plan 
EEA  (2006)  "How  much  bioenergy  can  Europe  produce  without  harming  the  environment".  See  also 
UNECE/JWEE 2008 study on potential wood supply.  
Biomass  Energy  Europe  "Status  of  Biomass  Resources  Assessments  Version  1",  19  December  2008 
available at: http://www.eu-bee.com/  
For more information see: http://ec.europa.eu/energy/renewables/bioenergy/bioenergy_en.htm 
IRGC (2008) Risk Governance Guidelines for Bioenergy Policies 

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38 

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implement policies according to their energy needs, available resources (particularly land and 
water) and economic development. 

Activities  under  the  EU's  Forestry  Action  Plan  have  been  instrumental  in  bringing  forward 
proposals on necessary elements for a national action plans. In that context, the EU's Standing 
Forestry  Committee70  advocates  Member  States  to  develop  a  strategy  on  mobilisation  and 
efficient  use  of  wood71.  The  Commission's  Communication  on  innovative  and  sustainable 
forest  based  industries72  asks  that  Member  States  pay  attention  to  the  different  uses  of 
biomass when developing the national action plans.  

To account for the EU's new energy challenges the Health Check of the Common Agricultural 
Policy73  made  available  additional  funds  for  bio-energy  under  the  European  Rural 
Development Fund (EAFRD), an increase of 3.2 billion Euros for 2010-2013. By mid-2009, 
Member  States  will  have  to  revise  their  national  rural  development  plans  and  programmes 
taking  into  account  the  new  challenges,  including  biomass  for  energy  from  agricultural  and 
forestry sources. 

To date, only five Member States have officially submitted their national biomass action 
plans  to  the  Commission  (Estonia,  Ireland,  Netherlands,  Spain  and  the  United  Kingdom). 
Regional biomass plans have also been submitted by Scotland, by the Central Finland region, 
North Karelia and by Northern Ireland and the South-East region of Ireland.  

All the submitted biomass action plans seek to assess their biomass resources and potentials 
for  energy  production  from  forestry,  waste  and  agricultural  biomass.  However,  these 
resources and potentials can barely be compared since the data is presented in various units 
and in a non-standardised way.  

The  national  biomass  action  plans  propose  various  objectives  for  biomass  use  in  different 
sectors (electricity, heating and transport) but the relationship of these sectoral targets to the 
Member  State's  overall  renewable  energy  target  is  not  clear.  Measures  for  mobilising  new 
biomass resources are not given great consideration in any of the action plans, but on the other 
hand  the  importance  of  biomass  imports  is  acknowledged.  Such  an  approach  will  not  be 
sustainable at EU level, unless countries or regions can be sure that the biomass imports they 
rely on will be available. 

To  ensure  that  there  is  an  overview  of  the  availability  of  resources  and  of  measures  to 
promote  the  production  and  use  of  biomass  resources,  the  Commission  will  provide  a 
template  for  developing  renewable  energy  action  plans  by  June  2009.  In  particular,  it  is 
considered useful that the development of these plans is carried out with the involvement of 
relevant stakeholders at local, regional and national level. The regions which have submitted 
their biomass strategies have considered issues important at the local level, such as adequacy 
of  manpower  to  reach  objectives,  the  need  for  investments  in  equipment  and  logistics  and 
analysis of technologies that are suited to local conditions.  
The  "Intelligent  Energy  Europe  II  Programme"74  identified  good  practices  for  promoting 
bioenergy  in  EU  Member  States,  which  show  that  an  adequate  legal  framework  should  go 
hand  in  hand  with  appropriate  support  schemes.  Germany  uses  a  'market  incentive 
programme' for leveraging the installation of small-scale biomass heating systems, especially 

70 
71 
72 
73 
74 

http://ec.europa.eu/agriculture/minco/othco/forest/index.htm 
Report on mobilisation and efficient use of wood and wood residues for energy generation available at: 
COM(2008)113 
Regulations (EC) 72/2009, 73/2009, 74/2009 O.J. L30. 
http://ec.europa.eu/energy/intelligent/index_en.html 

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39 

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pellet boilers, while Sweden imposed a carbon tax to provide long term and stable incentives 
for bioenergy. France focuses on supporting specific regional programmes such as the “wood-
fuel and local authorities  programme", promoting regional development and mobilisation of 
wood  for  heating  purposes,  which  triggered  the  construction  of  1,764  wood  heating  plants 
(1,170 MW installed power). The success of these programmes is due to the continuity of the 
policy  and  support  schemes  by  the  state  and/  or  the  region75.  To  support  such  schemes  at 
regional and local level, approximately €1.7bn from Community funds under Cohesion policy 
will be mobilised for biomass investment between 2007 and 2013. 

4.3. 

Barriers to the uptake of bioenergy 

There are still several administrative barriers that hinder the development of bioenergy plants 
within EU Member States. The Commission carried out a study on benchmarking bioenergy 
permits76,  looking  at  the  length  of  time  it  takes  to  get  a  permit  in  the  EU  and  the  factors 
affecting  the  success  or  failure  of  getting  a  permit  (which  can  also  mean  authorisation  or 
license to perform an activity). While several countries have put in place integrated permitting 
procedures and apply the “one-stop shop principle", most bioenergy projects require several 
permits  steps  (in  France.  Italy  and  Germany,  1-4  permits  are  required,  whereas  in  Spain. 
Romania and Poland, around 6-8 permits are required).  

Most  individual  types  of  permits  and  licenses  across  Europe  take  a  relatively  short  time  to 
obtain (a few weeks). Hence, the long timeframes for getting permits are often caused by the 
serial nature of the various permits and cross-authorisation. In general, the land use permit (in 
case of land use change), the environmental permit, in case the project requires an EIA, the 
operational  permit  and  the  legal  process  (in  case  of  higher  appeal)  last  the  longest  and 
dominate the duration of the project. 

On  average,  gaining  a  permit  takes  about  two  years  or  three  years  for  the  larger  biomass 
projects which include an EIA. However, it has also been identified that many projects simply 
fail to get a permit. The permit application failure rate exceeds 30% for bioenergy plants. This 
is influenced by many factors, including the relative expense associated with obtaining all the 
necessary permits (in particular for biogas and co-digestion plants) but in general because of 
local objections. The legal process through which appeals or objections can be made often do 
not  have  mandatory  or  clear  timeframes.  Around  one  third  of  the  analysed  cases  failed 
because  of  local  objections  to  bioenergy  installations,  in  particular  to  co-firing,  biogas  and 
biofuels plants. 

The cost associated with getting a permit is not significant in most cases and permits for large 
power  plants  are  not  necessarily  more  expensive  than  for  small  size  plants.  Typically,  the 
costs are well below 1% of the investments with the exception of the dedicated biogas plants 
where  costs  are  in  the  order  of  1-5%  of  the  investment  costs.  However,  where  there  is  a 
complex  framework  of  legislative  acts,  the  applicant  sometimes  has  to  apply  for  several 
permits simultaneously in order to fulfil environmental, agricultural, tax, waste etc. permitting 
requirements, leading to high cumulative costs.  

It  is  therefore  recommended  that  a  clear  legislative  framework  is  developed  for  permitting 
procedures of bioenergy installations where the role of authorities and timeframes are clearly 
defined. Coordination between permitting bodies is also advised. 

75 
76 

BAP Driver – European Best Practice Report, available at: http://www.bapdriver.org/ 
Ecofys and Golder Associates: Benchmarking Bioenergy Permits, 2008 

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40 

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4.4. 

Implementation of the thirty-three actions of the Biomass Action Plan 

The Commission's Biomass Action Plan contained a number of actions to be undertaken by 
the  Commission  and  by  Member  States.  The  following  table  provides  a  summary  of  the 
actions and the state of their implementation. 

Action 
Heating and electricity 
1)  work 
towards  a  proposal  for 
Community  legislation  in  2006  to 
renewable 
the  use  of 
encourage 
energy, 
for 
including 
heating and cooling 

biomass, 

2)  examine  how  the  directive  on 
energy  performance  of  buildings 
(EPBD) could be amended to increase 
incentives  for  the  use  of  renewable 
energy 

to 

improve 

study  how 

the 
3) 
performance  of  household  biomass 
boilers  and  reduce  pollution,  with  a 
view  to  setting  requirements  in  the 
framework of the eco-design directive 

4)  encourage  district  heating  scheme 
owners 
them  and 
convert them to biomass fuel 

to  modernise 

5)  encourage  Member  States  that 
apply a reduced VAT rate to gas and 
electricity and to apply such a rate to 
district heating too 

the 
6)  pay  close  attention 
implementation  of  the  Directive  on 
electricity  from  renewable  energy 
sources 

to 

to 
7)  encourage  Member  States 
harness  the  potential  of  all  cost-
effective  forms  of  biomass  electricity 
generation 

8)  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 

State of implementation 

The  new  Renewable  Energy  Directive,  based  on  COM(2008)19, 
includes the heating and cooling sector. Each Member State will have 
to set sectoral targets and outline in their National Action Plans how 
they  plan  to  promote  the  heating  and  cooling  sector  and  the  use  of 
biomass to reach national renewable energy targets.  

The  new  Renewable  Energy  Directive  includes  an  obligation  for 
Member  States  to  increase  the  share  of  renewable  energy  in  the 
building sector and to, where appropriate, require minimum levels of 
renewable  energy  to  be  set  for  new  buildings  and  buildings 
recast  proposal, 
renovation.  The  EPBD 
undergoing  major 
COM(2008)780,  abolishes  thresholds  for  new  buildings  for  which 
minimum energy performance requirements will have to be met and 
reduces the threshold from 1000m² to 50m² for existing buildings.  

A  tendered  study  on  biomass  small-scale  solid  fuel  (including 
biomass)  boilers  was  launched  in  May  2007.  A  draft  implementing 
measure  will  be  developed  depending  on  the  outcome  of  this  study. 
The study can be followed at: http://www.ecosolidfuel.org/ 

The  Renewable  Energy  Directive  creates  incentives  to  switch  from 
conventional fuels to renewables to meet Member States' targets. The 
Directive also asks Member States to give guidance on incorporating 
district  heating  and  cooling  in  planning,  designing,  building  and 
renovating  industrial  or  residential  areas.  It  also  requires  Member 
States  to  assess  the  necessity  to  build  new  district  infrastructure  for 
heating  and  cooling  in  their  National  Action  Plans  and  where 
appropriate  take  steps  with  a  view  to  developing  a  district  heating 
infrastructure from biomass. 

Directive COM(2006)18 is under review and a Commission proposal 
to  streamline  VAT  rates  and  favour  reduced  rates  for  renewables  is 
due to be adopted in 2009. 

A progress report is included in this Communication  

The Renewable Energy Directive allows Member States to cooperate 
on  joint  projects  and  statistical  transfers  to  allow  Member  States  to 
meet  their  targets  in  the  most  cost-effective  way.  The  Commission 
produced  an  assessment  of  the  effectiveness  and  efficiency  of 
national support schemes (COM(2008)57). 
As  well  as  the  actions  identified  in  point  4,  the  co-generation 
Directive 2004/8/EC requires Member States to analyse the national 
potential  for 
the  application  of  high-efficiency  cogeneration, 
including for renewables. 

EN 

41 

   EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Transport biofuels 
9)  bring  forward  a  report  in  2006  in 
view  of  a  possible  revision  of  the 
an 
biofuels  Directive, 
impact assessment  

including 

The Renewable Energy Directive includes the transport sector and set 
a  minimum  target  of  a  10%  share  of  renewables  in  transport. 
Directive  2003/30/EC  will  be  repealed  and  the  new  Directive 
includes  sustainability  criteria  for  biofuels  and  the  promotion  of 
electric-cars  from  renewables  as  well  as  second-generation  biofuels. 
An Impact Assessment was carried out (SEC(2008)85). 

10) encourage Member States to give 
second-
treatment 
favourable 
generation 
biofuels 
biofuels 
obligations 

to 
in 

The Renewable Energy Directive gives a bonus to second generation 
Biofuels:  they  will  count  twice  towards  any  national  biofuels 
obligations. 

promoting 

forward  a 

legislative 
11)  bring 
proposal 
public 
procurement  of  clean  and  efficient 
vehicles,  including  those  using  high 
blends of biofuels 

the 

12)  examine  how  biofuel  use  can 
count 
emission 
reduction targets for car fleets 

towards  CO2 

13)  pursue  a  balanced  approach  in 
ongoing 
agreement 
negotiations  with  ethanol-producing 
countries/regions 

trade 

free 

to 

14)  propose  amendments 
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 

15)  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 

16)  ask  the  relevant  industries  to 
explain  the  technical  justification  for 
practices  that  act  as  barriers  to  the 
introduction of biofuels 

17)  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 

A directive on public procurement of clean and efficient vehicles was 
agreed  at  first  reading  in  October  2008,  based  on  the  Commission's 
proposal  COM(2007)817  and  Member  States  have  18  months  to 
transpose it.  

The proposed Regulation for setting emission performance levels for 
passenger cars, based on COM(2007)856, was agreed in co-decision 
procedure in December 2008. It considers that the target for reducing 
CO2  emissions  to  130g  CO2/km  can  be  achieved  by  new  vehicle 
motor  technology  and  a  further  reduction  of  up  to  10g  can  be 
delivered by alternatives, such as sustainable biofuels. 

In  negotiating  Free  Trade  Agreements, 
is 
undertaking  trade  sustainability  impact  assessments  to  ensure  a 
balanced approach. 

the  Commission 

CEN (European Standardisation Committee) has a mandate to amend 
the standard EN 14214. 

The  Fuel  Quality  Directive  98/70/EC  was  amended  in  co-decision 
procedure, taking into account these issues. 

The  Commission  carried  out  a  study  of  a  wider  scope,  looking  at 
benchmarking and permitting procedures and barriers for various bio-
energy plants: co-firing, biofuels, biogas and combustion. The results 
of 
at: 
http://ec.europa.eu/energy/renewables/studies/index_en.htm  

available 

study 

the 

are 

for  Environment  and  Sustainable 
including  Energy  support 
countries: 

The  Thematic  Programme 
Management  of  Natural  Resources 
sustainable 
in 
energy 
http://ec.europa.eu/europeaid/where/worldwide/environment/index_e
n.htm  
The  dedicated  EU-ACP  Energy  facility  finances  similar  projects: 
http://ec.europa.eu/europeaid/where/acp/regional-

developing 

projects 

EN 

42 

   EN 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
cooperation/energy/cfp/cfp_en.htm  
The  Global  Energy  Efficiency  and  Renewable  Energy  Fund 
(GEEREF)  also  allocated  specific  funds  for  projects  in  developing 
countries 

A  biofuels  strategy  was  adopted  by  the  Commission  in  2006 
(COM(2006)34)  and  since  then  biofuels  strategies  were  further 
the  Renewable  Energy  Road  Map 
developed 
(COM(2006)848) 
the  Renewable  Energy  Directive 
(COM(2008)19).  

through 

and 

The costs and environmental impacts of biofuels are monitored on a 
biannual basis through Directive 2003/30/EC and will continue to be 
monitored through the renewable Energy Directive 

related TREN tender project is ongoing with CEN participation 

The Commission services consider that the risk of overcompensation 
is low, and will consider the issues on a case-by-case basis  

The CAP Health Check has abolished from 2010 specific support for 
energy crops, as the premium has been effective only in very limited 
circumstances and has not been an incentive for production73. 

Rural  development  funds  are  used  in  some  cases  to  support  such 
measures. 

18)  bring  forward  a  communication 
dealing  specifically  with  biofuels 
early in 2006 

to 

steps 

improve 
19) 
Take 
understanding  of 
the  costs  and 
environmental impacts of all transport 
fuels, including conventional biofuels  

20)  take  steps  to  promote  the  use  of 
ethanol 
in  diesel  blends  and  or 
engines 

21)  look  for  solutions  to  the  problem 
of  overcompensation 
for  biofuels 
under tax exemptions 
Cross-cutting issues 
22)  assess  the  implementation  of  the 
energy crop scheme  

23)  finance  a  campaign  to  inform 
farmers  and  forest  holders  about  the 
properties  of  energy  crops  and  the 
opportunities they offer 

24)  bring  forward  a  forestry  action 
plan  in  which  energy  use  of  forest 
material will play an important part 

The Commission adopted Communication COM(2006)302 on an EU 
Forest Action Plan, whose implementation is currently undergoing a 
mid-term review. 

25)  review  the  impact  of  the  energy 
use  of  wood  and  wood  residues  on 
forest based industries 

how 

consider 

the  waste 
26) 
framework 
could  be 
legislation 
amended to facilitate the use of clean 
wastes as fuel 

The  Standing  Forestry  Committee  has  formulated  an  opinion  which 
inter  alia  advocates  Member  States  to  develop  a  strategy  on  the 
mobilisation  and  efficient  use  of  wood  and  the  Commission's 
Communication on innovative and sustainable forest based industries 
(COM(2008)113) asks Member States to pay attention to the different 
uses  of  biomass  when  developing  National  Action  Plans.  The 
Renewable  Energy  Directive  requires  Member  States  to  outline 
measures  to  be  taken  to  develop  existing  biomass  resources  and 
mobilise new biomass resources for different uses.  

The  revised  waste  framework  directive  was  adopted  in  co-decision 
procedure in June 2008. A supplementary consultation was launched 
on  bio-waste  management  (COM(2008)811)  to  consult  about  waste 
management options for bio-waste including collection (separately or 
with mixed waste), anaerobic digestion and composting, incineration, 
and land-filling. 

27)  review  how  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 

The  proposed  revision  of  Regulation  (EC)  No  1774/2002  on  animal 
by-products  (COM(2008)345)  aims  to  clarify  the  application  of 
Community  Legislation  on  industrial  emissions  to  the  burning  of 
animal  by-products  as  a  fuel.  A  clearer  and  more  streamlined 
to  a  more 
approval  procedure  could  significantly  contribute 
widespread  use  of  animal  by-products  as  an  energy  source,  while 

EN 

43 

   EN 

 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
encourage 

the 
for  Standardisation 

European 
28) 
Committee 
to 
speed  up  work  on  standards  for  the 
quality of biomass fuels 

29)  explore  how 
to  develop  a 
European  spot  market  in  pellets  and 
chips 

preserving  the  current  high  level  of  protection  of  public  and  animal 
health in the Community.  

CEN  TC  343  activities  on  "refuse  derived  fuels"  are  ongoing 
according  to  an  EC  mandate.  Another  tender  TC  335  ongoing  on 
solid biomass fuel standards. 

Projects  have  been  carried  out  under  the  Intelligent  Energy  Europe 
programme  (e.g.  EuBioNet  II,  BioXChange).  Information  can  be 
found at: http://ec.europa.eu/energy/intelligent/projects/index_en.htm  
Standardisation  related  issues  are  covered  by  the  6th  Framework 
Programme  on  research  and 
technological  development,  e.g. 
BioNorm  II,  which  is  related  to  CEN  TC  335  activities  on  solid 
biofuels. More information is available at: http://www.bionorm2.eu/  

30)  encourage  Member  States 
to 
establish  national  biomass  action 
plans 

Three  expert  meetings  were  held  and  5  National  Biomass  Action 
Plans have been submitted to date. More information is available at: 
http://ec.europa.eu/energy/renewables/bioenergy/national_biomass_a
ction_plans_en.htm  

31)  encourage  Member  States  and 
regions  to  ensure  that  the  benefits  of 
biomass  are  taken  into  account  when 
preparing 
strategic 
their  national 
reference  frameworks  (NSRF)  and 
operational  plans  (OPs)  under  the 
rural 
cohesion  policy 
development policy 

and 

the 

30b)  consider  how 
sustainability  criteria  for 
biofuels production and utilisation 

to  develop 
transport 

Research 
32)  continue 
development  of 
“Biofuel technology platform”  

to  encourage 

an 

the 
industry-led 

Around €8.15 billion or 2.6% of total financial resources were 
allocated to energy projects under the structural and cohesion funds, 
of which €6.34 billion were allocated to renewable energy and energy 
efficiency. Biomass projects make up around 22% of this total. More 
information at: 
http://ec.europa.eu/regional_policy/atlas2007/index_en.htm  

The  Health  Check  of  the  Common  Agricultural  Policy  identified 
renewable energy as one of the new challenges for agriculture. It will 
increase the funds available (EAFRD) for the new challenges by 3.2 
billion Euros for 2010-2013. By mid-2009, Member States will have 
to  revise  their  national  strategy  plans  and  their  rural  development 
programmes  taking  into  account  the  new  challenges.  Co-financing 
rates are increased for measures addressing the new challenges. 

The  Renewable  Energy  Directive  sets  binding  sustainability  criteria 
to  be  applied  to  all  biofuels/  bioliquids  consumed  in  the  European 
Community  whether  or  not  they  are  domestically  produced  or 
imported  

The  biofuel  technology  platform  was  launched  in  June  2006  and 
continues 
found  at: 
http://www.biofuelstp.eu/  

information  can  be 

to  operate.  More 

Ongoing,  the  work  programmes  under  the  Seventh  Framework
Programme  are  updated  annually.  For  more 
information  see:
http://cordis.europa.eu/fp7/home_en.html 

into 

33) consider how best to take forward 
research 
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 and to research into 
second-generation biofuels. 

EN 

44 

   EN 

 
 
 
 
 
 
 
 
 
  
 
 
 
ANNEX  A:  MEMBER  STATES'  SUPPORT  SCHEMES  FOR  ELECTRICITY  FROM  RENEWABLE 

ENERGY SOURCES. 

Details of national schemes, drawn from Member States' reports. 

Austria 

Price Regulation (feed-in tariff): since 2003 support has been based on a standardised feed-
in tariff system. In 2006 feed-in tariff support was reduced from 13 years to 10 years plus two 
years at a reduced rate. The feed-in rates were also reduced. The feed-in tariffs for 2007 were: 

Belgium 

•  Wind: 7.55€ct/kWh for 10 years plus 2 years at a reduced rate 

•  Solid Biomass: 11.10-15.65€ct/kWh for 10 years plus 2 years at a reduced rate 

•  Liquid Biomass: 6-12.50€ct/kWh for 10 years plus 2 years at a reduced rate 

•  Biogas: minus 30% for 10 years plus 2 years at a reduced rate 

•  Landfill gas: 4.05-5.95€ct/kWh for 10 years plus 2 years at a reduced rate 

•  Geothermal: 7.30€ct/kWh for 10 years plus 2 years at a reduced rate 

•  PV: 30-46€ct/kWh for 10 years plus 2 years at a reduced rate 

•  Small hydro tariffs due to be set by 31 December 2007. Tariffs for plants constructed by 

31 December 2007 (dependent on output) were between 3.15-6.25€ct/kWh.  

Subsidies: there is €4bn available to support new green electricity generating systems. €1bn 
of this was added in 2006, of this 30% is for wind, 30% is for solid biomass, 30% is for biogas 
and  10%  is  for  all  other  green  electricity  generating  stations  excluding  hydropower.  Up  to 
€50m is available for medium-scale hydropower (10-20MW).  

L'Etat fédéral (competency for offshore electricity from renewable energy sources).  
Green  certificate  system  with  guaranteed  minimum  prices  according  to  the  electricity  from 
renewable  energy  sources  type.  There  is  an  obligation  to  buy  all  electricity  from  renewable 
energy sources. Theoretically, green certificates can be sold in other Belgian Regions but the 
Federal  Estate  claims  that  the  Regions  do  not  recognise  the  certificates  at  the  moment.  The 
minimum prices are guaranteed for 10 years (20 for offshore wind). The tariffs are:  

•  offshore wind ≤216 MW €107/MWh or €90/MWh for further capacity;  

•  onshore wind €50MWh;  

•  hydro power €50MWh;  

•  Solar power €150MWh; and  

•  other €20MWh.  

Income  tax  reduction:  people  who  invest  in  energy  efficiency  measures  (notably  solar 
thermal and solar PV) are entitled to a 40% income tax reduction (up to €3,380). Businesses 
can  also  benefit  from  an  income  tax  reduction  if  they  produce  electricity  from  renewable 
energy sources. 
Photovoltaics on public buildings: the aim is to have 1km² of PV. €2m funding is available.  
Wind  power  zone  (200km²)  created  in  2004  in  the  North  Sea  (2000MW  potential).  In  2008 
there will be new legislation to limit the additional costs due to distance for wind parks. The 
State  already  provides  up  to  €25m  for  under-sea  cable  for  each  project  ≥216MW  and 
guarantees the security of investment if an authority stops a development.  
Wallonia  
Green certificate scheme with a quota obligation. Green certificates are issued for each MW 
of electricity from renewable energy sources. The quotas are: 7% in 2007; 8% in 2008; 9% in 
2009; 10% in 2010; 11% in 2011 and 12% in 2012.  
If quotas are not met there is a fine of €100 per certificate (however under certain conditions 
quotas can be reduced). The minimum guaranteed price for a green certificate is €65 this is 
guaranteed  for  15  years.  (The  2006  median  market  price  was  €91.58).  Additional  green 
certificates over and above the quota are sold at the market price. Green certificates granted 

EN 

45 

   EN 

 
 
 
outside Wallonia are valid following mutual recognition. There will be a review of 2010-2012 
quotas by 1 September 2009. Quotas for 2013 onwards will be set after 1 January 2010.  
Private sector subsidies: up to 40% of investment (minimum is €25,000) for the production of 
energy from renewable sources.  
Public  sector  subsidies:  amounting  to  30%  of  TVAC  with  a  possible  10%  bonus  if  the 
amount of electricity from renewable energy sources can be calculated on site.  
Flanders 
Green certificates issued for each MW of electricity from renewable energy sources. There is 
an  annual  quota  which  rises  annually  to  6%  electricity  from  renewable  energy  sources  in 
2010. There is a fine of €125 per MW if the quota is not met. (25% of electricity from plants 
20-100GWh  and 50% of  electricity  from  plants  over  100GWh  is  exempt  from  the  scheme). 
There  is  a  minimum  price  guarantee  for  10  years  at  €80  per  Green  Certificate  for  wind, 
biomass and biogas; and €450 for 20 years for solar.  
Grants: are available for electricity from renewable energy sources projects, calculated on the 
basis  of  incremental  costs  of  a  traditional  installation.  Subsidies  vary  depending  on  the 
technology and higher subsidies are available for small to medium sized businesses.  
Brussels 
Green certificates are issued for each MW of electricity from renewable energy sources for 10 
years  of  a  plant's  operation.  PV  gets  4  certificates  per  MW  for  the  first  20m²  installed,  3 
certificates  for  the  next  40m²  and  2  for  the  rest  of  the  capacity.  Green  certificates  for  bio-
methanisation are calculated on the basis of the organic waste collected in the perimeter of the 
plant (the number of certificates is limited to 2 per MW). In 2007 the market price was around 
€92 for a green certificate and Elia (the system operator) guarantees €150/MWh (Elia's price 
for  electricity  from  renewable  energy  sources  varies  according  to  the  market).  Green 
certificates can be freely traded and are valid for 5 years from the date of issue. The quotas for 
electricity from renewable energy sources are: 2.5% in 2008; 2.5% in 2009; 2.75% in 2010; 
3% in 2011 and 3.25% in 2012.  
There is a fine of €100 per MW if the quota is not met. 
Subsidies: for PV a subsidy of up to €3,000 per house is available (third sector organisations 
get 40%). Third sector and business electricity from renewable energy sources operators are 
also entitled to a 40% subsidy for wind or biomass projects. 

Bulgaria 

Price  regulation  (preferential  prices):  there  is  an  obligation  to  purchase  electricity  from 
renewable energy sources at preferential prices (except for hydropower over 10MW). These 
prices  apply  to  all  electricity  from  renewable  energy  sources  generating  capacity  put  into 
operation by 31 December 2010 and are set annually. The March 2008 prices were:  

•  hydro <10MW 97.12 BGN/MWh;  

•  wind 139.96-185.96 BGN/MWh;  

•  PV 718-782 BGN/MWh;  

•  Biomass <5MW 164-215 BGN/MWh.  

A  market  mechanism  to  promote  electricity  from  renewable  energy  sources  and  thermal 
energy will be submitted for approval to the Council of Ministers no later than 31 December 
2011.  

Loans: public-private-partnerships partly funded by the Kozloduy International Fund (KIF), 
the  European  Bank  for  Research  and  Development  (EBRD)  and  the  European  Investment 
Bank  (EIB).  A  KIF  loan  of  €25.2m  generates  an  EBRD  loan  of  €105m.  Electricity  from 
renewable energy sources projects are entitled to up to 20% of their costs. The Enterprise for 
Management of Environmental Protection Activities (under the Ministry of Environment and 
Water) also provides interest-free loans of up to 70% for small hydropower plants.  

Cyprus 

Price  regulation  (fixed  price):  the  Electricity  Authority  of  Cyprus  is  obliged  to  buy 
electricity from renewable energy sources at 3.7 CYP/kWh (6.29€ct/kWh). A new price is due 
to be set at the beginning of 2008.  

Subsidies: a fund for electricity from renewable energy sources projects is provided from  a 
levy of 0.0013 CYP/kWh (0.0074€ct) on electricity consumption.  

EN 

46 

   EN 

 
 
 
 
 
•  For wind  projects  up  to  30kW businesses  get  up  to  40%  of  their  costs  up  to €41,006.43 
and  CY  citizens  get  55%  up  to  €51,258  per  unit.  The  electricity  is  then  sold  at  6.32 
€ct/kWh.  

•  For windmills businesses get 40% up to €17,086 and CY citizens get 55% up to €25,629 

per unit.  

•  For  installation/replacement  of  solar  thermal  water  heating  businesses  get  30%  up  to 

€17,086 and CY citizens get 45% up to €25,629.  

•  For installation/replacement of solar thermal space heating and cooling systems businesses 

get 40% up to €85,430 and CY citizens get 55% up to €117,466 per unit.  

•  New/replacement  domestic  solar  systems  get  up  to  €170.86  for  thermosyphonic  systems 

and up to €341.73 for forced circulation.  

•  For space heating using biomass CY citizens get 55% up to €18,795. For PV under 20kW 
there are two options. Option A businesses get 40% up to €47,840.84 and CY citizens and 
not-for-profit  organisations  get  55%  up  to  €64,926.85.  Electricity  would  then  be  sold  at 
14.18€ct/kWh  (Subsidy  of  20.5€ct/kWh  minus  6.32€ct  is  14.18€ct/kWh).  Option  B: 
businesses would sell electricity at 27.17€ct and households and other entities would sell it 
at 31.95€ct/kWh.  

•  For  desalination  using  renewable  energy:  small  to  medium  sized  businesses  get  30%  in 
regional  aid  plus  de  minimis  aid  which  in  total  should  not  exceed  40%  of  total  costs  of 
€170,860.  

•  For hydro small to medium sized businesses get 30% in regional aid plus de minimis aid 
which  in  total  should  not  exceed  40%  of  total  costs  of  €102,516.  Electricity  is  sold  at 
6.32€ct/kWh.  

•  For Geothermal heat pumps businesses can get 30% of costs up to €170,860. Households 

and non-profit organisations can get up to €15,377.  

•  For biomass 10-40% of costs can be covered depending on the size of the installation and 

the size of the enterprise up to €683,441. Electricity is then sold at 6.32€ct.  

Additionally grants and subsidies of between €123-152m are expected by 2010 for renewable 
energy and energy conservation.  
In 2007 the cap for photovoltaic power was lifted from 5kW to 20kW. [It is unclear whether 
there are caps for other electricity from renewable energy sources technologies].  

Czech 
Republic 

Guaranteed  prices  for  electricity  from  renewable  energy  sources  over  15  years.  Electricity 
from  renewable  energy  sources  producers  can  choose  between  minimum  feed-in  tariffs  or 
green  bonuses  (surcharges  on  the  market  price  for  electricity).  The  tariffs  for  new  plants 
decrease by 5% each year. In 2006:  

•  small  scale  hydro  got  1690-2398  CZK/MWh  from  the  feed-in  tariff  or  640-1340 

CZK/MWh from green bonuses.  

•  Wind got 2460-3020 from the feed-in tariff or 1950-2690 CZK/MWh from green bonuses.  

•  Biomass  got  2340-3375  CZK/MWh  from  the  feed-in  tariff  and  1220-2255  CZK/MWh 

from green bonuses.  

•  Biogas got 2670-3040 CZK/MWh from the feed-in tariff or 1550-1920 CZK/MWh from 

green bonuses.  

•  Geothermal  got  4500  CZK/MWh from  the  feed-in  tariff  or 3510  CZK/MWh  from  green 

bonuses.  

•  Solar got 6410-13460 from the feed-in tariff or 1275-5700 from the green bonus.  

Subsidies:  30%  of  capital  costs  up  to  CZK  2.8m.  (For  non-profit  organisations  and  public 
bodies up to 90% is available).  
There  are  also  two  EU  Structural  Aid  programmes:  Industry  and  Enterprise  Operational 

EN 

47 

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Denmark 

Estonia 

Programme  gave  up  to  46%  of  capital  costs  up  to  CZK  30m;  the  Infrastructure  Operational 
Programme from the European Regional Development Fund provides up to 75% but no more 
than CZK 10m. A project could also be funded by a State Environmental Fund taking support 
up to 90% of costs.  

Subsidies:  for  onshore  wind  have  increased  and  there  will  be  several  new  tenders  for 
2x200MW  offshore  wind  farms.  There  was  also  an  increase  in  the  subsidy  for  biomass  and 
biogas. The self-sufficiency rule for waste incineration at power stations has been repealed.  

Fixed price and guaranteed purchase: from 2007 network operators were obliged to buy all 
electricity from renewable energy sources at a fixed price of 1.15 EEK/kWh. (Therefore the 
mandatory purchase price rose by 42% and network operators were no longer just obliged to 
purchase electricity from renewable energy sources to cover network losses).  

In addition to the purchase obligation electricity from renewable energy sources producers can 
also receive aid of 0.84 EEK/kWh for electricity sent to the grid and sold. The duration of the 
aid scheme was also extended to 12 years (it had previously been 7-12 years but only up until 
2015).  

There is a restriction on wind energy from 2009: only the first 400GWh in a calendar year can 
receive  aid  and  only  the  first  200GWh  is  entitled  to  the  purchase  obligation.  All  further 
electricity must be sold on the open market.  

Germany 

Price  regulation  (fixed  prices):  higher  than  market  prices  for  electricity  from  renewable 
energy  sources  which  differ  depending  on  the  type  of  electricity  from  renewable  energy 
sources. For biomass, the fee structure is based on the plant's size and there are various bonus 
payments  for  using  renewable  sources  or  timber  remains  from  forestry;  new  technology;  or 
operating on a Combined-Heat and Power basis. There are incentives for modernising hydro 
plants over 5MW.  

The  next  EEG  Review  (Erneuerbare  Energie  Gesetz)  will  reassess  the  tariffs  for  electricity 
from renewable energy sources based on the current state of development and profitability. It 
is  also  expected  to  include  new  incentives  to  make  hydro  more  popular.  This  is  due  in 
December 2007 and will provide the basis for a further review of the Act in 2008.  

The Government has given initial indications of suitable sites for wind farms. There is a pilot 
geothermal plant which has been in operation since 2004. Three more plants are expected to 
come on line before the end of 2007.  

Greece 

Price regulation (feed-in tariff): with a 10 year guarantee which can be extended by up to 10 
years upon a producer's unilateral declaration to the responsible Operator. The prices for 2007 
were: 

•  Offshore wind got 92.82 €MWh 

•  PV got 452.82 €MWh if interconnected and 502.82 €MWh for non-connected islands 

•  Solar (other than PV) ≤5MW got 252.82 €MWh if interconnected and 272.82 €MWh if on 

a non-connected island.  

•  Solar (other than PV) ≥5MW got 232.82 €MWh if connected and 252.82 €MWh if on a 

non-connected island.  

•  Onshore  wind,  hydro  up  to  15MW,  geothermal,  biomass,  biogas  and  others  got  75.82 

€MWh for interconnected systems and 87.42€MWh for non-interconnected islands.  

Subsidy  for  electricity  from  renewable  energy  sources:  public  aid  is  provided  for  capital 
electricity from renewable energy sources investments of 20, 30 and 40% depending on which 
zone  of  Greece  the  electricity  from  renewable  energy  sources  system  is  in.  The  grant  is 
increased by  10% for  medium  businesses and  20% for small  businesses.  For  investments  in 
solar and wind the grant amounts to 40% of costs (including any mark-up).  

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Spain 

Finland 

France 

2nd  (2002)  and  3rd  (2004)  Community  Support  Frameworks  funding  for  electricity  from 
renewable  energy  sources  totalled  respectively  €196.40m  with  a  total  public  expenditure  of 
€79.9m and €735.79m with a public expenditure of €252.70m.  

Subsidy  for  PV:  currently  being  developed  based  on  public  aid  from  domestic  and 
Community resources under the National Strategic Reference Framework. 

Premiums  for  electricity  from  renewable  energy  sources  which  depend  on  the  size  of  the 
plant and the type of electricity from renewable energy sources.  
The financial incentive for biomass used to produce electricity was increased.  
The  Renewable  Energies  Plan  2005-2010  allocated  €6.2m  for  solar  thermal  projects  from 
2006 onwards.  
From 2006-2010 there is aid for PV not connected to the grid via the Autonomous Regions 
and tariffs, incentives and premiums for connected PV.  
Tax benefits: the introduction of emissions trading in 2005 prompted changes to the support 
schemes  in  Finland.  Tax  benefit  for  electricity  generated  from  wood  and  wood-based  fuels, 
waste gas from metallurgical processes and chemical reaction heat were discontinued in early 
2007. (Subsidies for wind, small hydro, recycled fuels, forest processed chips and biogas was 
retained).  
Subsidies: for renewable energy investments in the emissions trading sector were suspended 
other  than  for  innovative  technology  projects.  Aid  continues  to  be  granted  outside  the 
emissions trading sector. Aid for wind energy investment is only available for projects using 
innovative technology.  
Feed-in  tariff:  a  Bill  including  a  feed-in  tariff  for  biogas  plants  under  20MW  is  due  to  be 
submitted  to  Parliament  during  the  Spring  2008  session.  The  scheme  will  include  field 
biomass, slaughterhouse waste, various manures or municipal waste as fuel.  
The use of new support schemes or a possible extension of existing ones (i.e. feed-in tariff) 
will be reconsidered if the current measures fail to promote electricity from renewable energy 
sources  sufficiently.  Finland  is  preparing  a  Climate  and  Energy  Strategy  which  should  be 
ready by 2008.  
Price regulation (tarif d'achat) obligation to buy electricity from renewable energy sources. 
There  is  a  guaranteed  price  (higher  than  the  market  price)  which  electricity  from  renewable 
energy sources producers are entitled to. This price is guaranteed for 15-20 years depending 
on the type of electricity from renewable energy sources. In 2006 and 2007 the prices were 
adjusted  to  reflect  the  costs  of  investment  and  exploitation.  Bonuses  can  also  be  granted  to 
take  account of positive  effects  on  air  quality,  reducing CO2  and  the development  of  future 
technologies.  Only  wind  farms  which  are  in  identified  zones  are  entitled  to  support.  These 
zones are defined on the basis of the community concerned, so not just the potential for wind 
power but also taking account of the environment, historical monuments and protected sites.  
The tariffs are: 

•  Hydro for 20 years at 6.07ct€/kWh plus a bonus of 0.5-2.5 ct€/kWh for small installations 

and a bonus of 0-1.68 ct€/kWh in winter.  

•  Biogas for 15 years at 7.5-9 ct€/kWh with a bonus for energy efficiency at 0-3 ct€/kWh 

and a 2 ct€/kWh bonus for methanisation.  

•  Onshore  wind  for  15  years:  8.2  ct€/kWh  for  10  years  and  2.8-8.2  ct€/kWh  for  5  years, 

according to the site.  

•  Offshore wind for 20 years: 13 ct€/kWh for 10 years and between 3-13 ct€/kWh for the 

next 10 years, according to the site.  

•  PV for 20 years. In Metropolitan France get 30 ct€/kWh plus a bonus of 25 ct€/kWh for 
grid integration. In the overseas departments it is 40 ct€/kWh plus a bonus of 15 ct€/kWh 
for grid integration.  

•  Geothermal  for  15  years.  In  Metropolitan  France  it  is  12  ct€/kWh  plus  an  energy 
efficiency  bonus  of  0-3  ct€/kWh.  In  the  overseas  departments  it  is  10  ct€/kWh  plus  an 
energy efficiency bonus of 0-3 ct€/kWh.  

Invitations to tender (appels d'offres) for wind, biomass and biogas, producers benefit from 
a fixed price agreed through the contract.  

EN 

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Hungary 

Ireland 

Italy 

Lithuania 

Crédit  d'impôt  a  reduction  of  up  to  40%  of  tax  on  equipment  used  for  electricity  from 
renewable energy sources development.  
Price  regulation:  there  are  fixed  prices  for  electricity  from  renewable  energy  sources 
dependent  on  the  type  of  technology  and  the  season  (electricity  from  renewable  energy 
sources  affected  by  the  weather  has  a  fixed  price  but  electricity  from  renewable  energy 
sources not affected by the weather has a seasonal price to keep its average price at the same 
amount).  The  prices  are  amended  annually  according  to  the  rate  of  inflation.  Mandatory 
acceptance  is  valid  for  the  return  of  a  given  investment.  The  highest  starting  value  for  a 
subsidised price is 26.46 HUF/kWh as of 1 January 2008.  
Investment  subsidies:  the  Energy  Conservation  programme  is  a  competitive  tender  system 
for  energy  conservation  including  electricity  from  renewable  energy  sources.  In  2007  2.6bn 
HUF  was  granted  as  subsidies  and  16bn  HUF  was  loaned  on  favourable  terms.  The 
Environmental  and  Infrastructure  Operative  programme  and  EU  Structural  Funds  provided 
3.35bn  HUF  of  subsidies  for  electricity  from  renewable  energy  sources  in  2004-6.  More 
funding  is  available  for  2007-2013.  The  New  Rural  Development  Strategic  Plan  supports 
biomass and biogas. 
Loans: the Energy Conservation Fund grants loans with favourable interest.  
Ireland is in the process of replacing its quota based tendering programme with a feed-in tariff 
programme. (Feed-in tariff was approved by the European Commission in September 2007).  
The measures being taken to achieve the objectives have undergone various amendments, all 
with the aim of strengthening policy in favour of renewables.  
Purchase  obligation  and  feed-in  tariffs  for  electricity  from  renewable  energy  sources 
approximately 3 times higher than the average electricity sale price from the Ignalina Nuclear 
Power Plant. The prices are guaranteed until 2020 and are adjusted according to inflation. In 
2007 they were:  

•  hydro <10MW 5.79 ct€/kWh;  

•  wind 6.37 ct€/kWh;  

•  biomass 5.79 ct€/kWh.  

On  1  January  the  feed-in  tariffs  will  be  revised  and  augmented.  For  plants  commissioned 
before 1 January 2008 that use Biofuels to generate electricity will receive 6.37ct€/kWh and 
those  commissioned  after  1  January  2008  will  receive  6.95ct€/kWh.  (As  of  1  January  the 
purchase price of electricity is 5.79ct€/kWh).  
Lithuania Environmental Investment Fund (funded by 30% of an environmental pollution 
tax)  provides  soft  loans  for  projects  to  reduce  the  impact  of  economic  activities  on  the 
environment.  The  maximum  loan  per  project  is  1.5m  LTL  over  a  maximum  of  5  years. 
Subsidies must not exceed 350,000 LTL (per recipient, per 3 years) to a maximum of 70% of 
the costs. 
Ministry  of  Agriculture  and  Rural  Development  Programme  for  2007-2013  promotes 
wind  farms  under  250kWh  on  farmland  provided  the  electricity  is  used  in  agricultural 
processes. Up to 40% of costs are available (or 50% for young farmers who meet prescribed 
criteria).  
Price  regulation:  compulsory  purchase  for  hydro,  wind,  biogas  and  biomass.  There  are 
annual quotas for the compulsory purchase of electricity from renewable energy sources for 
the 2007-2010 period. The compulsory purchase of electricity from renewable energy sources 
from biomass plants up to 4MW; and biogas and hydro power plants up to 5MW; and wind 
farms under 0.25MW price formulae are applied.  
Wind farms over 0.25MW use a tendering process in which the lowest-price principle applies. 
(A call for tender was issued on 5 March 2008 and closes on 30 December 2008 the starting 
price has been set at LVL 70.2804/MWh). For biomass plants over 4MW the selling price is 
set by the Public Utilities Commission. The price of electricity from renewable energy sources 
which  operators  do  not  have  the  right  to  sell  within  a  compulsory  purchase  framework  is 
determined by agreement between the operator and any electricity market.  

Latvia 

Luxembourg  Feed-in Tariff and a purchase obligation for wind, hydro, biomass and biogas.  

Malta 

There  is  an  aid  regime  for  LU  citizens  who  produce  electricity  from  renewable  energy 
sources.  
Financial  support  mechanism  capital  grants  of  25%  of  the  purchase  price  for  micro-wind 
turbines up to 3.7kW (maximum grant €233); 20% grant for solar PV installations between 1-
3.7kWp  (maximum  grant  €1,166  with  an  additional  €582  for  every  additional  kWp  (±5%) 

EN 

50 

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above 1kWp and the cost of installing the metre to operate the plant has been waived).  
Net  metering  for  electricity  from  renewable  energy  sources  electricity  with  a  spill  tariff  of 
7ct€/kWh for any excess electricity fed into the grid.  
Malta published a draft renewable energy policy for public consultation in August 2006 (an 
energy policy consultation was also launched in 2006). The Renewable Energy policy will: set 
goals;  put  appropriate  support  schemes  and  regulatory  measures  in  place;  and  encourage 
investment and public participation.  
A call for expressions of interest for a deep offshore wind farm (75-100MW) was issued in 
2006  on  a  public,  private  partnership  basis.  It  is  unlikely  that  such  a  project  would  be  built 
before 2010.  

Netherlands  Decree on promoting sustainable energy production: subsidy provision for electricity from 
renewable  energy  sources.  Each  year  the  Minister  for  Economic  Affairs  sets  a  maximum 
budget  for  the  subsidies.  Guaranteed  prices  for  10  years  although  this  time  period  can  be 
shortened  or  lengthened.  The  subsidy  covers  the  actual  unprofitable  tip  of  electricity  from 
renewable energy sources.  
Energy research subsidy: the budget is set annually and is allocated via a tender process.  
Energy Investment Allowance: a tax incentive scheme allowing electricity from renewable 
energy sources projects to deduct a certain percentage of the purchase value from the taxable 
profits.  
Green Investment: a electricity from renewable energy sources investor can obtain finance 
from a fund on favourable terms (1-2% below project financing).  
Green  certificates  obligation  energy  companies  selling  electricity  are  required  to  present  a 
certain  number  of  green  certificates  or  pay  substitution  fees.  There  is  an  obligation  to  buy 
electricity from renewable energy sources at the average market price.  
Grants and preferential loans are available from the National Environment Protection and 
Water Management Fund and provincial funds for electricity from renewable energy sources 
investments.  
The Infrastructure and Environment Operational Fund supports construction or capacity 
expansion  of  wind,  hydro  up  to  10MW,  biogas  and  biomass  projects  and  heat  generating 
stations using solar or geothermal energy.  
Tariffs for electricity from renewable energy sources:  

Portugal 

Poland 

•  Wind 74-75€/MWh;  

•  hydro 75-77€/MWh;  

•  PV 310- 317€/MWh;  

•  solar-thermal 267-273€/MWh;  

•  PV microgeneration 355-470€/MWh;  

•  biomass 102-109€/MWh;  

•  biogas 102-117€/MWh;  

Romania 

•  municipal waste incineration 53-54€/MWh;  

•  wave (demonstration to commercial) 76-260€/MWh.  

In 2005 a public tender was issued for 1,800MW to be supplied from wind farms. In 2006 a 
public tender was issued for 100MW to be supplied from 15 forest biomass plants. Contracts 
for 922MW of new hydro were issued at a cost of €1bn. A licence was awarded for a 76GWh 
PV plant. Operation commenced on the world's first wave-power plant (4MW).  
Obligatory  quota  system  and  a  green  certificate  trading  scheme:  a  green  certificate  is 
provided  for  each  MW  of  electricity  from  renewable  energy  sources  and  can  be  traded  in  a 
competitive  market (prices must fall between €24-42 up to 2012). Annual obligatory quotas 
for green certificates have been established up until 2012. Wind, solar, geothermal, biomass, 
wave  and  hydro  ≤10MW  are  eligible.  The  quotas  for  electricity  from  renewable  energy 
sources  are:  0.7%  in  2005;  2.22%  in2006;  3.74%  in  2007;  5.26%  in  2008;  6.78%  in  2009; 
8.3% in 2010-2012.  
If a supplier acquires more GCs than necessary to meet the quota they can sell them to another 
supplier (this is at the price the seller acquired them at). In 2007 the average sale price of a GC 
on the market was €42. [This is the highest price that they can be sold at].  

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Sweden 

Slovenia 

Quota system electricity certificate scheme extended until 2030.  
Market introduction aid for wind power. Ares of national interest for wind power have been 
designated. Aid for municipal wind power planning. Four national wind power coordinators 
have been nominated. New planning targets for wind up to 2020 are being considered. 
Price regulation: electricity from renewable energy sources producers can choose between a 
guaranteed price (according to a uniform annual price), independent sale on the market, or a 
uniform  annual  premium  (a  single  or  dual  tariff  settlement  can  also  be  chosen).  The  tariffs 
(not including 20% VAT) are:  

•  hydro  annual  price  0.05938-0.06155  €/kWh  or  annual  premium  of  0.02182-

0.02399€/kWh;  

•  biomass annual price 0.09118-0.09410€/kWh or annual premium 0.05362-0.05654€/kWh; 

•  wind annual price 0.05863-0.06072€/kWh or annual premium 0.02107-0.02316€/kWh; 

•  geothermal annual price 0.05863 or annual premium 0.02107; 

•  solar annual price 0.37419 or annual premium 0.33663; 

Slovak 
Republic 

other  electricity  from  renewable  energy  sources  annual  price  0.12089  or  annual  premium 
0.08333. 

Fixed  purchase  prices  for  up  to  12  years.  Network  operators  must  preferentially  purchase 
electricity from renewable energy sources to cover their losses. The electricity from renewable 
energy sources prices from April 2008 are:  

•  hydro 2000-8410 SKK/MWh;  

•  solar 8410 SKK/MWh;  

•  wind 2000-2940 SKK/MWh;  

•  geothermal 3680 SKK/MWh;  

•  biomass 2190-3600 SKK/MWh; and  

•  biogas 2630-4310 SKK/MWh.  

If a electricity from renewable energy sources plant constructed after 1 January 2005 received 
state or EU aid the tariffs reduce as follows:  

•  30% aid leads to a 4% reduction;  

•  40% to an 8%;  

•  50% to a 12%; and  

•  above 50% to a 16% reduction. 

United 
Kingdom 

Renewables Obligation on all electricity suppliers in GB to supply a specific proportion of 
electricity from electricity from renewable energy sources or to pay a penalty buy-out price. 
The quota  is 7.9%  in 2007/08  augmenting in  steps  to 15.4% by  2015  (it  will  remain  at  that 
level  until  2027).  Certificates  are  issued  for  each  MW  of  electricity  from  renewable  energy 
sources produced. Banding of the Renewables Obligation will be introduced to bring forward 
technologies  currently  further  from  commercial  deployment  such  as  offshore  wind,  marine 
and tidal and Advanced Conversion Technologies.  
Exemption from Climate Change Levy electricity from renewable energy sources producers 
do not have to pay.  
Capital grants 
Some  support  is  available  to  small  hydro  under  the  Low  Carbon  Buildings  Programme. 
£600m over 10 years will be provided by BP, Caterpillar, EDF, E.ON, Rolls Royce, Shell and 
the UK Government to the Energy Technologies Institute for wave and tidal power.  
The  Research Council  Energy  Programme's  budget  is  expected  to rise  to over £70m  p.a. by 
2007-2009.  
The UK is carrying out a feasibility study for a tidal power development in the Severn Estuary 
which could provide up to 5% of the UK's electricity.  

Source: Member States' 2007 Reports 

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52 

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ANNEX  B:  REVIEW  OF  THE  PROGRESS  IN  DIFFERENT  RENEWABLE  ELECTRICITY 

TECHNOLOGIES 

This data is drawn from Member States' reports, with graphs from Eurostat/Fraunhofer ISI " 
Electricity  from  renewable  energy  sources  2006  breakdown  of  normalised  renewable 
electricity in 2006".  

Wind power 

Electricity generation from wind in the EU-15 Member States from 1990 to 2006.  

]
h
W
G

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i

d
n
w
m
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n
o
i
t
a
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t
i

c
i
r
t
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e
E

l

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Electricity generation from wind in the EU-12 Member States from 1990 to 2006. 

]
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[

i

d
n
w
m
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f

n
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a
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t
i
c
i
r
t
c
e
E

l

500

450

400

350

300

250

200

150

100

50

0

LU

FI

IE

BE

FR

SE

AT

GR

PT

IT

UK

NL

DK

ES

DE

HR
BG
MT
CY
LT
SI
SK
HU
EE
CZ
LV
PL

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

EN 

53 

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At the end of 2006 Germany was the world leader in wind power with 18,685 wind turbines 
operating at a combined capacity of 20,622 MW producing 30,500 GWh of electricity, equal 
to  5%  of  Germany's  total  electricity  consumption.77  In  2006  wind  power  in  Germany 
accounted  for  41.3%  of  total  electricity  from  renewable  sources.  Wind  power  development 
will continue in Germany with an increased focus on offshore wind. 

In  2006,  nearly  two  thirds  (61%)  of  Denmark's  electricity  from  renewable  energy  sources 
came from wind power (6,108 GWh). This accounts for 16.8% of Denmark's total energy. It 
should be noted that 2006 was a poor year for wind in Denmark. In 2005 6,613.8 GWh were 
produced which accounted for 62% of electricity from renewable energy sources or 17.5% of 
total  electricity  consumption.  Subsidies  for  onshore  wind  farms  were  increased  in  February 
2008. 1300 MW of new wind farms capacity is expected by 2012.  

Other  Member  States  which  have  significantly  developed  wind  power  generation  over  the 
past few years include: 

•  Spain with a wind-based growth in 2006 of 18% (1820 MW new capacity); and  

•  the  Netherlands  who  have  already  achieved  their  2001  goal  to  build  1500  MW  of  wind 

power by 2010; and is now aiming to install 4000 MW by 2011.  

And the following Member States have significant plans for new wind capacity: 

•  Belgium  has  identified  a  200km2  zone  for  offshore  wind  farm  which  could  potentially 

provide 2,000 MW. 

•  Construction  has  started  on  Europe's  largest  onshore  wind  farm  (322  MW)  in  Scotland. 
Construction  of  450  MW  of  offshore  is  also  underway.  A  further  2.5GW  has  been 
consented, including the world's largest offshore wind farm (1GW).  

•  Luxembourg  envisages  increasing  its  wind  power  fifteen-fold  to  meet  its  2010  target  of 
5.7%  electricity  from  renewable  energy  sources.  (There  were  58  GWh  in  2006  which 
accounted  for  21%  of  electricity  from  renewable  energy  sources  and  0.7%  of  total 
electricity consumption).  

The  following  Member  States  have  put  limits  on  the  amount  of  electricity  produced  from 
wind power:  

•  Estonia will have a limit on wind power from 2009. Aid will only be available for the first 
400  GWh  per  annum  and  the  purchase  obligation  will  only  apply  to  the  first  200  GWh. 
Electricity produced above these limits will be sold at market price. This is because there 
are  no  power  stations  which  can  be  rapidly  regulated  in  Estonia.  In  order  to  cover  peak 
loads and extend the use of wind power. 

•  Hungary  has  a  limit  of  330  MW  for  wind  power  due  to  problems  in  regulating  the 

electricity system.  

•  Wind power generation almost doubled in Czech Republic between 2005 and 2006 to 49.4 
GWh  (in  2006  there  was  43.5  MW  of  installed  capacity).  However,  the  Czech  Republic 
views that there should be no more than 600-700 MW installed wind power capacity as it 
increases the need for backup sources and the large-scale constructions create bottlenecks 
and congest lines. Therefore, rising installed capacity will be accompanied by a reduction 
in financial support.  

77 

In the first half of 2007 there were 19,024 turbines with a total capacity of 21,283 MW 

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54 

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Solar Photovoltaic and Thermal electric 

]
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[

V
P
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o
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a
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e
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i
r
t
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e
E

l

2,500

2,000

1,500

1,000

500

0

1990

1992

1994

1996

1998

2000

2002

2004

2006

LU

FI

IE

BE

FR

SE

AT

GR

PT

IT

UK

NL

DK

ES

DE

Electricity generation from PV in the EU-15 Member States from 1990 to 2006 

Germany has the largest PV market in the world. At the end of 2006 Germany had the most 
installed  PV  (2,831  MW  or  2,000  GWh)  with  a  fourfold  production  increase  between  2004 
and 2006.  

As  of  2006,  Spain  has  the  second  most  installed  capacity  within  the  EU-27  with  144  MW. 
Spain's Renewable Energies Plan (2005-2010) aims to install 363 MW of solarvoltaic energy 
(10  times  that  of  December  2004)  in  order  to  reach  a  target  of  400  MW  by  2010.  Between 
2006-2010  investment  aid  is  available  for  PV  isolated  from  the  grid  and  operating  aid  is 
available for PV connected to the grid.  

The Portuguese Government has granted a licence for a 76 GWh per annum PV power plant 
which will be the largest in Europe.  

Luxembourg aims to have 80 GWh of PV by 2010. Due to financial support scheme there was 
a boom between 2002 and 2004 from 1.6 MW to 23.5 MW. (In 2006 there were 23.7 MW).  

Greece expected to have 1.3 MW of registered Photovoltaic capacity by early 2008. However, 
there are many non-registered PV systems as they are exempt from the licensing obligation. 
On  the  basis  of  electricity  sales  Greece  estimates  that  the  total  installed  capacity  of  PV 
systems by early 2008 would be 5 MW.  

EN 

55 

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Biomass 

Electricity generation from solid biomass, biogas and municipal solid waste in the EU-27 
Member States from 1990 to 2006 

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n
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t
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t
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e
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s
s
a
m
o
B

i

l

Biowaste

Biogas

Solid biomass

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

In 2006, Germany produced the most electricity from renewable energy sources from biomass 
of  the  EU-27  with  17,900  GWh  providing  3.3%  of  total  electricity  consumption  (27%  of 
Germany's total electricity from renewable energy sources).  

Other  Member  States  which  have  significantly  developed  biomass  generation  over  the  past 
few years include: 

•  Sweden  who's  energy  certification  scheme  has  been  extremely  effective  in  increasing 
production of existing biomass-fuelled plants (3,440 GWh increase) and has stimulated the 
construction of new plants (721 GWh increase) between May 2003 and Sept 2007. 

•  The  Flanders  region  of  Belgium  where  55%  (1,638  GWh)  of  electricity  from  renewable 

energy sources came from biomass in 2007.  

And the following Member States have significant plans for new biomass capacity: 

•  The UK's largest biomass plant was commissioned in 2007 (44 MW).  

•  To  meet  its  2010  target  (5.7%)  Luxembourg  envisages  increasing  its  biogas  production 

208-fold.  

•  In  Denmark  as  of  February  2008  increased  subsidies  for  biomass  and  biogas.  The  self 
sufficiency rule for waste incineration has been repealed. A 700,000 tonne use of straw and 
timber is expected by 2011 equivalent to an increase in the total RE share of 1.2 percentage 
points. 

The following Member States have had problems with increasing electricity from renewable 
energy sources from biomass: 

•  In  Finland,  there  have  been  problems  regarding  authorisation  for  recycled  fuel  plants. 
Construction  halted  due  to  repeated  appeals  against  environmental  and  construction 
permits following the entry into force of the Waste Incineration Directive. Finland intends 
to seek a uniform interpretation to the Directive. Further to this, in Finland the introduction 
of emissions trading in 2005 prompted changes to the subsidy mechanisms for electricity 

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from  renewable  energy  sources.  The  tax  benefit  for  wood,  wood-based  fuels,  waste  gas 
from metallurgical processes and chemical reaction heat were discontinued in early 2007. 

•  In  Czech  Republic  biomass  is  the  most  technically  exploitable  renewable  energy  source. 
However,  biomass  forestry  for  energy  purposes  is  only  effective  up  to  a  range  of  50km 
from  the  proposed  site  of  use.  Biomass  is  also  limited  by  the  area  of  land  available  on 
account  of  food  security.  In  2006  285  GWh  was  supplied  to  the  grid  from  biomass  (up 
from 210 GWh in 2005). There is also a lack of feed-in tariff stability for the use of energy 
crops for electricity and heat in Czech Republic.  

•  In  Spain  the  expansion  of  biomass  could  not  take  place  in  2006  as  an  expected  Royal 
Decree  was  not  published.  The  lack  of  suitable  incentives  has  prevented  biomass 
development over recent years due to an expectation that there will be substantial changes 
in remuneration for biomass projects.  

Hydro 

In  2006,  349,000  GWh  were  produced  by  hydropower  in  Austria.  (The  average  annual 
generation  is  slightly  more  at  364,000  GWh).  Austria  noted  that  in  the  future  hydro  power 
will be significantly influenced not only by climatic changes but also by the implementation 
of  the  Water  Framework  Directive  (2006/60/EC).  The  intensity  of  future  requirements  for 
decommissioning hydro generating stations and residual water flow may lead to a 5-15% fall 
in hydro power production in Austria.  

In 2006, in Germany, 21,636 GWh was produced from hydro plants (98% of which are under 
5MW). This accounts for 3.5% of total energy supply.  

In  2007  80.5%  of  Bulgaria's  electricity  from  renewable  energy  sources  came  from  large 
hydropower (2,827.1 GWh) and 17.8% from small hydropower. Therefore only 1.7% of RES 
came  from  a  source  other  than  hydro-  wind  power.  In  the  same  year  84.5%  of  Romania's 
electricity from renewable energy sources came from hydro (13,467 GWh). 

In Spain the increase in hydropower is behind schedule with 53MW and 54 MW increases in 
2005 and 2006 respectively compared to an objective of a 127 MW increase per year.  

Hydro and climate conditions 

When  calculating  Member  States'  electricity  from  renewable  energy  sources  the  European 
Commission uses normalised data based on the amount of hydro produced in an average year. 
This  is  important  because  hydro  generation  in  can  fluctuate  significantly  year  on  year.  For 
example, in Finland year or year differences in the amount of hydropower produced can be as 
much as 30-50%.  

Most  renewable  energy  comes  from  hydroelectricity  in  Lithuania  (79%  from  hydro  plants 
over 10MW and 13% from hydro plants under 10MW). The electricity production increases 
in April when tidal waters are used. However, in the summer when the water levels in rivers 
and  ponds  drop  the  amount  of  energy  produced  is  significantly  reduced,  and  in  some  cases 
completely terminated. 

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Geothermal 

Electricity  generation  from  geothermal  sources  in  the  EU-15  Member  States  from  1990  to 
2006 

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6,000

5,000

4,000

3,000

2,000

1,000

0

AT

DE

FR

PT

IT

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Italy  produces  the  most  geothermal  electricity  in  the  EU-27.  In  2005  there  was  711  MW 
installed  capacity  which  produced  5,325  GWh.  The  same  installed  capacity  produced  an 
additional 202 GWh in 2006 (5,527 GWh) and in 2007 5,569 GWh were produced. 

Wave and tidal 

In Portugal the first wave-power plant with a capacity of 4 MW is operational.  

A  feasibility  study  is  underway  in  the  UK  on  a  barrage  in  the  river  Severn  which  could 
produce up to 5% of UK electricity. 

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ANNEX C: BIOFUEL ENERGY SHARE  

Member State 

Biofuel share 
2003 (%) 

Biofuel share 
2004 (%) 

Biofuel share 
2005 (%) 

Biofuel share 
2006 (%) 

Biofuel share 
2007 (%) 
4.23 
1.07 
4.82 
No data  
0.50 

0.42 

0.00 

0.05 

1.09 

1.00 

0.00 

0.00 

0.00 

0.97 
3.75 

0.93 
0.00 

0.06 
0.00 

0.06 
0.00 

3.54 
0.01 
0.41 
No data 

0.00 
0.00 
0.11 
0.67 
1.21 
0.00 
0.00 
0.00 
0.50 
0.22 
0.00 

0.00 
0.00 
0.11 
0.67 
1.72 
0.00 
0.00 
0.00 
0.50 
0.07 
0.02 

0.15 
0.12  
0.02 
1.77 
6.32 
0.75 
0.28 
0.09 
0.46 
0.22 
1.72 

Austria 
Belgium (*) 
Bulgaria (*) 
Cyprus 
Czech 
Republic (*) 
Denmark (*) 
Estonia 
Finland 
France 
Germany 
Greece (*) 
Hungary (*) 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
(*) 
Malta 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain (*) 
Sweden 
The 
Netherlands 
UK 
EU 27 
(a) EU 25 
Source:  Member  States  2006  and  2007  reports,  except  (*)  data  for  2007  which  is  from  EurObserver  Biofuels 
Barometer 

0.14 
0.06 
No data 
3.57 
7.35 
1.21 
0.20 
0.6 
0.46 
0.14 
4.35 

0.582 
0.92 
1.02 
0.00 
0.69 
0.275 
0.53  
3.10  

1.08 
0.68 
2.54 
0.79 
2.53 
0.83 
1.11 
4.00 

0.07 
0.05 
0.51 
0.33 
0.72 

0.15 
0.06 
0.38 
2.28 

0.14 
0.00 
0.35 
1.32 

0.35 
0.44 
2.23 

0.52 
0.48 
0.00 

0.10 
0.30 
0.00 

0.02 
0.49 
0.00 

0.0378 
0.5(a) 

0.04 
0.7(a) 

0.45  
1.82 

0.18 
1.02 

0.84 
2.58 

0.026 

2.00 

0.01 

0.03 

0.02 

0.29 

0.02 

0.00 

0.02 

1.46 

78 

0.03% in volume terms, equating to 0.26% in energy content, assuming 100% biodiesel. 

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ANNEX D: MAIN PLANNED AND EXISTING 2ND-GENERATION BIOFUEL FACILITIES IN EUROPE 

Country 

Austria1 

Place / 
COMPANY 
Gϋssing 

Technology 

Denmark1 

Denmark1 

Finland1 

France3 

France1 

France1 

Germany2 

Germany2 

Germany2 

Germany2 

- 

- 

- 

cereal-to-biofuel 

demonstration  plant  of 
the FT synthesis 
pilot 
facility 
pilot  plant  producing 
lignocellulosic ethanol 
syndiesel 
plant 
using  forest  residue  and 
pulp/paper waste 
pilot facility 

Kalundborg 
GENECOR 
Bornholm 
BIOGASOL 
Varkaus 
STORA 
ENSO 
Pomacle-
Bazancourt 
(Marne) 
FUTUROL 
PROJECT 
not yet defined  pilot  plant  producing 

pilot 

lignocellulosic ethanol 
pilot plant using Fischer-
Tropsch technology 

- 

Bure 
(Lorraine) 
AXENS 
α-plant 

Pilot plant converted to a 
Fisher-Tropsch  unit 
in 
2002 
first 
plant (β-plant) 

commercial  BtL 

standard production plant 

- 

Freiberg 
UET/CHORE
N 
CHOREN 

Karlsruhe 
FZK 

- 

Pyrolysis pilot plant 

Sweden2 

Hofors 

Sweden2 

Skogall 

Pilot  and  demonstration 
black  liquor  gasification 
plant 
pressurized  (15  bar)  air-
blown pilot plant 

Sweden2 

Pitea - Sodra 

30 

pressurized, 
oxygen-blown 
development gasifier 

bar 

in 
operation 
NO 
in future 
NO 
in future 
NO 
in future 
NO 
end of 
2008 
in 2008 

NO 
in future  
NO  
in future 

1997/199
8 

Capacity / Production 
(Current or Forecast)  
 This demonstration plant will be big enough to 
refuel a fleet of vehicles in the city of Güssing 
4.500 tons of cellulosic ethanol per year 

8.000 tons of cellulosic ethanol per year 

100 tons of cellulosic ethanol per year 

15.000 tons per year 

several tons of FT until 2005 

YES 
from 2007 

45 MW (360 barrel per day) 
from 2008: 15000 t/a of BtL 

NO 
2011 
YES  
end of 
2007 
1987 

built in 
1994 
modified 
in 1997 
YES 
2005 

200.000 t/a BtL (5000 barrels per day) fuel 

capacity of 500 kg biomass per hour (2 MW) 

0.5 MW 

1 MW 

3 MW 
Volvo is planning a test fleet of about 15 heavy 
duty  trucks  to  be  ready  for  the  end  of  2009. 
DME  for  this  fleet  is  planned  to  be  produced 
from  gas  from  the  DP-1  plant  in  Piteå  which 
then  will  be  equipped  with  a  pilot  plant  for 
DME production with a capacity in the order of 
4-5 tons/day 
25,000 tons/year of fuel grade DME equivalent 
to ~17,000 t diesel/year 

The production calculated for all Swedish plants 
at the end of 2020 is almost 600.000 Ton diesel 
Oil Equiv. Per year  

Sweden2 

Sweden2 

Sweden2 

Sweden2 

not yet defined  BLGMF  (Black  Liquor 
for  Motor 

Gasificator 
Fuel) 

not yet defined  2 BLGMF demonstration 
plants 
not yet defined  3 small BLGMF plants 

end of 
2010 

end of 
2010 

2014- 
2018 

not yet defined  5 large BLGMF plants 

2012 - 

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Country 

Place / 
COMPANY 

Technology 

Sweden1 

Spain1 

The 
Netherlands1 

Örnsköldsvik - 
SEKAB 
Babilafuente  - 
ABENGOA 
BIOENERGY 
Sas  Van  Gent 
- 
ROYAL 
NEDALCO 

pilot  plant  producing 
lignocellulosic ethanol 
pilot  plant  producing 
lignocellulosic ethanol 

pilot  plant  producing 
lignocellulosic ethanol 

in 
operation 
2020 
YES 
2005 
YES 
2007 

Capacity / Production 
(Current or Forecast)  

100 tons of cellulosic ethanol per year 

4000 tons of cellulosic ethanol per year 

in future   160.000 tons of cellulosic ethanol per year 

Source : 
1) IFP Innovation Energy Environment Panorama 2008 -“2nd generation pilot biofuel units worldwide 
2) Renewable Fuels for advanced Powertrains, Final Report. Renew 2008 
3) FUTUROL PROJECT 

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