Biofuel support policies in Europe: Lessons learnt for the long way ahead

Biofuel consumption in the EU is growing rapidly but major efforts will need to be undertaken if the EU's objectives for 2010 and beyond are to be achieved. This article analyses the strengths and weaknesses of different biofuel support policies based on the experiences gained in pioneering countries and explores scenarios for their possible impacts in the long-term. It comes to the conclusion that important pre-conditions such as fuel standards and compatibility with engines are in place or being introduced on an EU-wide basis. Current and future policy support therefore focuses on creating favourable economic or legal frameworks to accelerate the market penetration of biofuels. The ambitious targets endorsed in terms of biofuel market shares require the implementation of efficient policy instruments. At the same time, large consumption volumes and the advent of innovative production technologies make it possible for Member States to promote specific types of biofuels, depending on their main objectives and natural potentials. This will require complementary instruments such as subsidies for production facilities, user incentives or feedstock subsidies.