European Union Biofuels Policy and Agriculture: An Overview

Publication Date: March 2006

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Energy

Type:

Abstract:

Several different economic and environmental forces have converged in recent years to generate growing interest in alternate sources of energy, including biofuels, within the European Union (EU). The European Commission (EC) is using both legislation and formal directives to promote biofuel production and use within the EU. However, EU biofuel production is impeded by its high production costs relative to fossil fuels. To date, the most important biofuel produced in the EU has been biodiesel with an 80% share of biofuel production in 2004. Bioethanol has accounted for the remainder. The major feedstock for EU biodiesel production is rapeseed oil, while bioethanol is generally produced using a combination of sugar beets and wheat.

U.S. policymakers are closely watching EU biofuel developments, particularly for any successful policy choices that might work in the United States. In addition, both the production and use of biofuels have important long-run implications for EU agricultural production and trade. This report briefly introduces some of the more salient agricultural policies and issues related to EU biofuel production and use. This report will be updated as events warrant.