Biofuel Subsidies

Biofuels—At What Cost? A review of costs and benefits of EU biofuel policies

Biofuels—At What Cost? A review of costs and benefits of EU biofuel policies (PDF - 4.25 MB)

Technical Annex (PDF - 469.03 KB)

Addendum (PDF - 276.67 KB)

Biofuels—At What Cost? A review of costs and benefits of EU biofuel policies analyzes a range of costs and benefits associated with European Union (EU) conventional biofuel policies. The study provides a comprehensive overview of economic and non-economic costs and benefits of the EU, quantifying them where possible using estimates available from public accounts, state-of-the-art literature and author calculations. The paper identifies the main cost of the industry as subsidy schemes, which in 2011 were estimated to be EUR 5.5 – 6.9 billion. The study examines the key benefits generated by the industry, including rural development, greenhouse gas emissions reductions, and improved energy security, concluding that the social benefits of EU biofuel policies in meeting these policy objectives has, in many instances, been marginal, unclear, or in need of greater monitoring and elaboration. The European Union’s proposed tightening of the current emission standard for passenger vehicles is discussed as an alternative, viable low-cost policy measure to achieve the public policy objectives for which biofuels are subsidized. The report provides recommendations to EU policy-makers on reforming subsidy policies and improving data recording in order to enhance the policy formulation process.

Accompanying this report is a Technical Annex that contains supporting research material and data.

Research Type: 
This article is part of the series Cost-Effectiveness Assessments.