EU Biofuels Investment Development: Impact of an Uncertain Policy Environment
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Although in 2009 the Renewable Energy Directive set mandatory targets for all Member States to achieve a minimum 10% share of renewable energy in transport fuel by 2020, in September 2012 the European Commission proposed to amend these, proposing to cap at 5% the contribution of first generation biofuels ( based on sugar, cereals and vegetable oils ) . Since then there has been extensive discussion within the European institutions about the future direction this policy framework should take. The discussion within both the European Council and with in the European Parliament has been highly polarised and hitherto inconclusive. Much of the emphasis of the discussion has been focused on the understandable concern relating to the potentially adverse impacts of feedstock production for biofuels on both the environment and food security. This has led to a preoccupation with issues related to indirect land use change (ILUC) and more generally on the proposals to cut back on what are generally termed first generation or conventional biofuels using readily available agricultural feedstocks.
While these issues clearly merit attention, little discussion has focused on the question of the investment needed to supply 5% of EU transport sector energy from renewable sources other than conventional biofuels or indeed what the drivers for such investment are. This is in part based on the assumption that the investment will follow from whatever policy targets are set and indeed by the belief that the supposed current biofuels investments boom needs to be altered to funnel money towards advanced biofuels . It is against this background that this Special Study contributes to the ongoing debate on the future of biofuels support policy and whether we can expect any significant investment in the sector in the medium term without agreement on the future direction of EU biofuels policy.
- Author:
- Agra CEAS
- Type:
- Report
- Link:
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(287 kb)