Biofuels—At What Cost?

The report argues that EU biofuel policies, particularly those supporting conventional food-based biofuels, are not cost-effective and often fail to meet their stated public good objectives. It finds that significant public subsidies—estimated between EUR 5.5 and 6.9 billion in 2011—support an industry where benefits are increasingly captured by non-EU suppliers rather than EU farmers. The analysis highlights that conventional biofuels can lead to net increases in greenhouse gas emissions when indirect land use change (ILUC) is considered and contribute to higher global food prices. The report suggests that tightening vehicle emission standards to 95 gCO2/km by 2020 would be a significantly cheaper and more effective way to abate carbon emissions than subsidizing biofuels. It recommends phasing out support for food-based biofuels and implementing a 5 per cent cap on their contribution to renewable energy targets.

• In 2011, the European Union provided between EUR 5.5 and 6.9 billion in subsidies to the biofuels sector, with ethanol receiving between 0.15 and 0.21 euro cents per litre and biodiesel receiving between 0.32 and 0.39 euro cents per litre.
• The benefits of EU biofuel support are increasingly captured by non-EU suppliers; in 2010-2011, only about half or less of the EUR 1316 billion annual market value went to EU farmers.
• Biofuel policies contribute to higher global prices for agricultural commodities, particularly oilseeds and vegetable oils, which can increase costs for food and animal feed consumers by between EUR 100 million and EUR 4 billion annually.
• When accounting for indirect land use change (ILUC) using a central factor, first-generation biofuels would save a maximum of 0.5 per cent of total EU-27 road transport emissions by 2020, and biodiesel may actually cause net emission increases.
• Tightening passenger vehicle emission standards to 95 gCO2/km by 2020 is significantly more cost-effective than biofuel subsidies, with abatement costs of EUR 133233 per tonne of CO2 avoided, nearly 20 times cheaper than biofuels under central ILUC factors.
• The water footprint of biofuels consumed in the EU is estimated at approximately 82 km3, with 39 km3 sourced from European water resources, which is roughly equivalent to the combined annual discharge of the Seine and Elbe rivers.
• Biofuel production has led to biodiversity loss through land-use change; for example, in Germany, at least 55,000 hectares of grassland were lost to maize conversion between 2003 and 2009.
• The EU's energy security benefits from biofuels are limited and projected to decline; while biofuels scored 75/100 for energy security in 2010, this is expected to drop to 42/100 by 2050.
• Employment benefits are poorly documented and often not located in the poorest rural areas; only 31 per cent of ethanol and 35 per cent of biodiesel jobs were located in EU Convergence Regions.
• Biofuel production is highly sensitive to feedstock prices, as raw materials account for approximately 90 per cent of biodiesel and 70-80 per cent of ethanol production costs.

APA

Charles, C., Gerasimchuk, I., Bridle, R., Moerenhout, T., Asmelash, E., & Laan, T. (2013). Biofuels—At What Cost? International Institute for Sustainable Development. https://www.iisd.org/gsi/sites/default/files/biofuels_subsidies_eu_review.pdf

Chicago

Charles, Chris, Ivetta Gerasimchuk, Richard Bridle, Tom Moerenhout, Elisa Asmelash, and Tara Laan. Biofuels—At What Cost? International Institute for Sustainable Development, 2013. https://www.iisd.org/gsi/sites/default/files/biofuels_subsidies_eu_review.pdf.

Wikipedia

{{cite report |last1=Charles |first1=Chris |last2=Gerasimchuk |first2=Ivetta |last3=Bridle |first3=Richard |last4=Moerenhout |first4=Tom |last5=Asmelash |first5=Elisa |last6=Laan |first6=Tara |title=Biofuels—At What Cost? |publisher=International Institute for Sustainable Development |date=April 2013 |url=https://www.iisd.org/gsi/sites/default/files/biofuels_subsidies_eu_review.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{charles2013biofuelsat, author = {Charles, Chris and Gerasimchuk, Ivetta and Bridle, Richard and Moerenhout, Tom and Asmelash, Elisa and Laan, Tara}, title = {{Biofuels—At What Cost?}}, institution = {International Institute for Sustainable Development}, year = {2013}, month = apr, url = {https://www.iisd.org/gsi/sites/default/files/biofuels_subsidies_eu_review.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }