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handle is hein.crs/crsajfc0001 and id is 1 raw text is: Order Code RS22404
March 16, 2006
CRS Report for Congress
Received through the CRS Web
European Union Biofuels Policy
and Agriculture: An Overview
Randy Schnepf
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Summary
Several different economic and environmental forces have converged in recent
years to generate growing interest in alternate sources of energy, including biofuels,
within the European Union (EU). The European Commission (EC) is using both
legislation and formal directives to promote biofuel production and use within the EU.
However, EU biofuel production is impeded by its high production costs relative to
fossil fuels. To date, the most important biofuel produced in the EU has been biodiesel
with an 80% share of biofuel production in 2004. Bioethanol has accounted for the
remainder. The major feedstock for EU biodiesel production is rapeseed oil, while
bioethanol is generally produced using a combination of sugar beets and wheat.
U.S. policymakers are closely watching EU biofuel developments, particularly for
any successful policy choices that might work in the United States. In addition, both the
production and use of biofuels have important long-run implications for EU agricultural
production and trade. This report briefly introduces some of the more salient
agricultural policies and issues related to EU biofuel production and use. This report
will be updated as events warrant.
Introduction
Various policy goals - reducing greenhouse gas emissions, boosting the
decarbonization of transport fuels, diversifying fuel supply sources and developing long-
term replacements for fossil oil while diversifying income and employment in rural areas
- have motivated the European Union (EU) to promote the production and use of
biofuels (i.e., transport fuels produced from renewable organic materials).
Between 1985 and 2004, road transportation (i.e., cars and trucks) fuel consumption
in Western Europe (primarily the EU) grew by nearly 50%. By 2000 the then EU-15 was
importing 75% of its petroleum needs with expectations for this import dependence to

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