Impacts of the EU biofuel target on agricultural markets and land use: a comparative modelling assessment

The Renewable Energy Directive (2009/28) and the Fuel Quality Directive (2009/30) include criteria for sustainable biofuel production and procedures for verifying that these criteria are met. The consequent growth in biofuel production may lead to higher agricultural production in the EU and is also likely to trigger indirect land use changes worldwide. There is strong public debate about the extent of the total reduction in greenhouse gas emissions due to switching from fossil fuel to biofuel, especially once account is taken of the global land-use change implications of higher EU imports of biofuel or biofuel feedstocks, and of reduced exports of EU food crops.

The European Commission (EC) must deliver an assessment of the impacts of EU biofuel policies to the European Parliament and the Council in 2010. To underpin this assessment, various research activities have been carried out by different Commission services. This report presents the results of an agro-economic impact analysis prepared by the Institute for Prospective Technological Studies (IPTS) for DG Agriculture and Rural Development (DG AGRI), with the aim of analysing the impacts of EU biofuel policies on agricultural production, trade and land use within and outside the EU, up to the year 2020.

The integrated Agro-economic Modelling Platform (iMAP), coordinated by IPTS in cooperation with DG AGRI, provides an appropriate infrastructure for carrying out this analysis. It directly supports the three models - AGLINK-COSIMO, ESIM and CAPRI – that are used in this exercise. These partial-equilibrium, agro-economic models are robust, scientifically acknowledged tools for simulating policy changes within the agricultural sector. They depict agricultural policy measures in detail and can be used to identify policy impacts on, inter alia, supply and demand, trade flows, domestic and world markets. In addition, since indirect land use change in third countries is triggered by price signals transmitted via market interactions, these models have the potential to present an economically consistent global picture of land use change impacts.