Only a few years ago, biofuels were viewed by some in the European Union (EU) as perhaps the best way to improve security of supply, reduce greenhouse gas emissions, and offer new sources of income to people dependent on agriculture. It was the new kid on the block, lauded by politicians, and greeted with much positive media coverage. More recently, however, the practical difficulties and the hard economic realities of biofuels production and its use have become the focus. It begs the question: just what will biofuels offer to the EU's energy future?

This question was certainly being asked following the early July vote recommending reduced biofuels by members of the European Parliament environment committee. Last year EU leaders backed a goal of taking 10 percent of European transport fuel from renewable energy sources by 2020, with biofuels expected to be the main source. The new proposal is for between and eight and 10 percent of energy for transport to come from renewable sources by 2020, with an interim target of four percent by 2015.

To some it might not seem like much of a shift, but the committee also stressed the importance of incorporating of electric or hydrogen cars into the target and added that a thorough review would be required in 2015 before the EU could progress to the eight to 10 percent mark by 2020. It has led to many commentators suggesting that it is perhaps a sign that the EU is backpedaling somewhat on what it sees biofuels achieving.

Whilst the European Commission has been quick to underscore that the vote “was not the official opinion of the European Parliament”, the main committee working on the directive —the energy and industry committee—can certainly be expected to take a lead from the environment committee's amendments. One obviously feeds into the other.

The committee's vote comes at a time of mounting evidence about the current impact of biofuels on food prices, people, the environment and biodiversity. And this had lead to rumblings of unease among a number of EU member states. France, which currently holds the EU presidency, has said that establishing strict environmental and social criteria for biofuels imports was more important than meeting the 10 percent target, and in Germany, the government has scrapped tax breaks for green fuels.

Concerns surrounding biofuels were also highlighted in the recent Gallagher Review of biofuels, commissioned by the UK government and put together by the independent Renewable Fuels Agency. The report concluded that while there is a future for a sustainable biofuels industry, the introduction of biofuels should be “significantly slowed” until controls are in place to limit the negative effects of their production.

It stressed that feedstock production must avoid agricultural land that would otherwise be used for food production, because the displacement of existing agricultural production, due to biofuel demand, is accelerating land-use change and, if left unchecked, will reduce biodiversity and may even cause greenhouse gas emissions rather than savings. It added that a slowdown will also reduce the impact of biofuels on food commodity prices, notably oil seeds, which have a detrimental effect upon the poorest people.

The review indicated that “current evidence suggests that the proposed EU biofuels target for 2020 of ten percent of energy is unlikely to be met sustainably … we therefore propose targets for renewable transport fuels of between five and eight percent for the EU for 2020.” This is even lower than that recommended by the European Parliament environment committee.

It is clear that very few are saying that biofuels have no place in the EU's energy future. The key issue is sustainability, and in this regard there are many questions. This is obviously not an exhaustive list, but does offer an overview of some of the concerns. Can international regulations be agreed upon that guarantees crops will only be cultivated, produced, and distributed in such a way that the climate and local societies benefit? To what extent are, and may, biofuels targets contribute to higher food prices? What policies can mitigate the potential negative indirect effects of biofuels? What is the role of the public and private sectors? And what is the role for first generation and second generation biofuels? The last question is one being increasingly raised as some are already viewing second generation biofuels, comprising a variety of technologies that use such things as plant waste or crops that do not compete with food production, as some form of panacea. Given the experience with first generation, perhaps this is wrong?

They certainly offer hope as this type of technology will allow biofuels to be produced from any plant material, meaning there would be no conflict between the need for food and the need for fuel. Nevertheless the technology is in its infancy and costs still need to come down. And the Gallagher Review also stressed that they can take up more land than the crops currently used.

It all points to the importance of making sure that the biofuels industry takes the best from what is available today, and makes certain that what is brought to the market in the future meets the new set of criteria laid out. The focus now is not only on energy security, reducing greenhouse gas emissions and its farmers, but on making sure land-use change is beneficial to all and does not result in food insecurity. It is a plethora of goals, all of which feed into the future of biofuels in the EU.

Going forward, slower biofuels penetration can be presumed, rather than the initial presumed fast dash. Perhaps this is the way for any nascent industry, an early boom, and then a period of reflection. This certainly looks true in the EU. The Policymaker's initial love affair with biofuels appears to be over and the reality that biofuels may not be as big a part of the future as originally thought is beginning to sink in. Fossil fuels can be expected to remain dominant in both the power generation and transportation sectors for the foreseeable future, and where biofuels currently fit in is as a growing, but very much supporting energy source.