Abstract/Summary

The development of biofuels has been one of the most visible and controversial manifestations of the use of biomass for energy. Biofuels policies in the EU, US and Brazil have been particularly important for the development of the industry in these three important markets. All three have used a variety of measures, including consumption or use mandates, tax incentives and import protection to promote the production and use of biofuels. Despite this, it is uncertain whether the EU will achieve its objective of a 10 per cent share for renewables in transport fuels by 2020. The US is also running into difficulties in meeting consumption mandates for biofuels. Questions are being raised about the continuation of tax credits and import protection. Brazil has liberalised its domestic ethanol market and adopted a more market-oriented approach to biofuels policy, but the management of domestic petroleum prices and the inter-relationship between the sugar market and ethanol production are important factors affecting domestic consumption and exports. In both the EU and the US an ongoing debate about the benefits of reliance on biofuels derived from food crops and concern about the efficacy of current biofuels policies may put their future in doubt.