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

By Ivetta Gerasimchuk, Richard Bridle, Tom Moerenhout, Tara Laan, Chris Charles, Elisa Asmelash on April 15, 2013

BiofuelsAt 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 9.3 - 10.7 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.

The Global Subsidies Initiative published an addendum to the report in August 2013. The Addendum corrects estimates of the size of EU subsidies to biofuels in 2011. It also presents the calculations in full.

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

Report details

Focus area
IISD, 2013