1. Introduction

This chapter aims to address the EU's approach to regulating the sustainability of biofuels. Biofuels were promoted in the EU firstly to reduce dependence on oil imports and to increase energy security and later the EU emphasised the CO2 emission saving benefit as the reason for substituting oil with biofuels. The probiofuel policy was finally entrenched in legal instruments since 2003, and it is claimed that the switch to biofuels has been responsible for achieving a three-fold objective of GHG emission reduction, energy security, and rural employment and development. More importantly, with mounting concerns about the negative impacts of biofuels, the EU began to stress the sustainable production of biofuels and established a set of sustainability criteria particularly for biofuels (and bioliquid) in the legislation, which was declared by the European Commission as the ‘most comprehensive and advanced’ binding sustainability scheme of its kinds in the world. Thus, it is of particular interest for this thesis to analyse the sustainability scheme, examining what sustainability criteria are set forth and how comprehensive and advanced they are to ensure the sustainability of biofuels.

To analyse the EU's approach, the regulation regarding demand, supply, and trade of biofuels is examined at the EU level, and it is questioned whether this regulation inclusively takes into account sustainability concerns in environmental and socio-economic dimensions. The EU regulator can establish biofuel measures which may directly drive or constrain the demand, supply, or trade of biofuels, within the competences stipulated in EU law. Thus, this chapter concentrates on the regulatory measures related to the demand, supply, and trade of biofuels as provided for in EU law, and examines to what extent they aim to avoid or minimise the potential adverse effects on sustainability.

Moreover, compared to national law, the EU has a ‘multi-level’ regulatory framework. Hence, if the measure at the EU level is not inclusive for addressing both the environmental and socio-economic concerns, it will further be examined whether the EU's measure leaves room for lower authorities – the Member States – to adopt complementary or stricter sustainability criteria for biofuels. This question calls for an analysis of the extent of harmonisation (or approximation) of the sustainability criteria for biofuels.