European Court of Auditors: Foggy future for biofuels in the EU

• The EU allocated €430 million, mostly for research, but deployment of advanced biofuels is taking longer than expected
• EU biofuels policy lacks a long-term perspective
• Biofuels are not yet competitive and not always environmentally friendly, and production is limited by biomass availability issues 

The road ahead for biofuels is unclear and fraught with pitfalls, warns a report published today by the European Court of Auditors. The lack of a long-term perspective has affected investment security, while sustainability issues, the race for biomass, and high costs constrain the deployment of biofuels.

Biofuels are considered as an alternative to fossil fuels, the aim being to help reduce greenhouse gas emissions in the transport sector and improve the EU’s security of supply. For the 2014-2020 period, around €430 million in EU funding was allocated to research projects and the promotion of biofuels. But moving from initial laboratory research to the production phase can take at least a decade. On top of that, EU biofuels policy, legislation and priorities have often shifted, making the sector less attractive and impacting investors’ decisions.

“Biofuels are meant to contribute to the EU’s climate-neutrality objectives and enhance its energy sovereignty. With its current biofuels policy, however, the EU is driving without a map and runs the risk of not reaching its destination”, said Nikolaos Milionis, the ECA member who led the audit. 

The absence of a clear roadmap is an issue the EU auditors particularly highlight. Take, for example, aviation. The sector is difficult to electrify, and so advanced biofuels could be a good option for decarbonisation. The new ReFuelEU Aviation legislation adopted in 2023 set the required level of sustainable aviation fuel (SAF) – including biofuels – for 2030 at 6%, or about 2.76 million tonnes of oil equivalent. But at present, potential production capacity in the EU hardly reaches a tenth of that amount. And there is still no EU-level roadmap on how to speed up production, unlike in the US. The future of biofuels in road transport is also very much unclear. The heavy bet on electric cars, combined with the planned end of new petrol and diesel cars by 2035, could mean that biofuels have no large-scale future in road transport in the EU. 

The EU auditors also point to three main issues that biofuels are facing on the ground: sustainability, biomass availability, and cost.

The environmental benefits of biofuels are often overstated. For example, biofuels from feedstock that requires land to grow (and so may entail deforestation) may adversely affect biodiversity, soil and water. This inevitably raises ethical questions about the relative priorities of fuel and food. 

In addition, the availability of biomass limits the deployment of biofuels. The European Commission expected biofuels to increase energy independence. However, in reality, reliance on third countries (e.g. imports of used cooking oil from China, the UK, Malaysia and Indonesia) has soared due to rising demand for biomass over the years. The fact is that the biofuels sector competes with other sectors for raw materials, especially with the food sector, but also with cosmetics, pharmaceuticals, and bioplastics. 

Lastly, as biofuels are more expensive than fossil fuels, they are not yet economically viable. And emission allowances are currently cheaper than reducing CO₂ emissions by using biofuels, which fiscal policies in EU countries do not always favour.

All this means that the deployment of advanced biofuels is slower than expected. As required, all EU countries imposed obligations on fuel suppliers to ensure that the share of renewable energy was at least 10 % by 2020 in the road and rail transport sectors, and 14 % in all transport sectors by 2030. However, a majority of EU countries missed their targets in 2020, including Greece, Poland, Romania, France and Spain, to name but a few. 

Background information

Biofuels are defined in the latest EU Renewable Energy Directive as “liquid fuels for transport produced from biomass” and must meet certain sustainability criteria. In 2021, most biofuels consumed in the EU were crop-based (mainly ethanol and biodiesel). 

Special report 29/2023, “The EU’s support for sustainable biofuels in transport: an unclear route ahead”, is available on the ECA website.

Source

European Court of Auditors, press release, 2023-12-13.

Supplier

European Commission
European Court of Auditors
European Union

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