The main goals of the European Union in the energy sector, including energy use in transport, are to meet the Kyoto Protocol objectives, double the share of renewable energy supply by 2010, improve energy efficiency, security and diversity of supply, enhance competitiveness of European industries and create jobs. So far, the EU has developed recommendations on energy policy goals but has not had a legal basis (competence) for energy policy per se — this has been the responsibility of Member States. This situation is about to be changed as energy shall now be recognized as an area of shared responsibility between the EU and Member States individually.

Bioenergy is projected to become a major contributor to the EU’s future primary energy mix. It already contributes about 60 per cent of the renewable energy share in the European Union and is believed to be the renewable energy with the largest growth potential. The White Paper on Renewable Energy (European Commission, 1997) estimates the contribution of biomass and waste in 2010 at 135 million toe, still representing about 60 per cent of the total primary renewable energy in the region.

A significant increase in biomass utilization will be needed to achieve this goal. This includes an additional 15 million toe from biogas exploitation, 30 million toe from agricultural and forestry residues, and 45 million toe from energy crops, requiring 10 million hectares out of the 77 million hectares of agricultural land in the EU. For comparison, it can be mentioned that EU-15 set-aside land for agriculture is about 9.5 Mha, which grew to 30 Mha with EU enlargement. It is also estimated that 18 million toe of biomass from energy crops will be used for the production of liquid biofuels (biodiesel and ethanol) in 2010. As a matter of fact, a recent directive on the promotion of biofuels for transport aims at facilitating their introduction (European Commission, 2003). The objective is to replace 2 per cent of fossil fuels in transport with biofuels by 2005, and 5.75 per cent by 2010.

Meeting the EU renewable energy targets for biomass obviously requires a significant amount of land and other resources. Over recent years, set-aside agri­cultural land has been of the order of 20 per cent, and between 10 and 15 per cent of this land has been devoted to nonfood crops. However, reform of the Common Agricultural Policy (CAP) will lead to reductions in the share of land set aside, though in absolute terms this is compensated by the expansion of the European Union. Enlargement of the EU can have significant implications for bioenergy, not least due to the implied increase in agricultural land. In addition, agriculture in accession countries is likely to witness significant improvements in efficiency as a result of increasing economic pressure and competition, thus farmers may welcome the diversification to nonfood energy crops. Oilseed rape covers about 80 per cent of the set-aside land devoted to nonfood crops in the EU, though its cover has decreased considerably in the last few years and the area covered by sugar beet (as a nonfood crop) and short rotation coppice (SRC) has been growing.

In 1998, about 438 000 ha of set-aside land were dedicated to crops for liquid biofuels production (340 000 ha of rapeseed, 68 000 ha of sunflower seed, 18 000 ha of cereals and 12 000 ha of sugar beet) and about 20 000 ha of SRC, mainly for heat generation via direct combustion. Fuelwood production continues to rise in the EU and better forest management and the establishment of new forests could contribute significantly more wood fuel, as is believed to be the case in Sweden (see also Ling and Silveira, Chapter 3). Large agricultural holdings (>100 ha) contribute more than two-thirds of the total land used for nonfood products, and more than half of the total land under incentive schemes. Nevertheless, land used to produce agricultural raw material for nonfood purposes covers less than 1 per cent of the total cultivated area of these holdings.

The Common Agricultural Policy (CAP) reforms have two goals: the first is an increasing market orientation of the sector, and the second is the reinforcement of structural, environmental and rural development aspects of sustainable agriculture (European Commission, 2002). Aspects that could favor bioenergy, such as the multifunctionality of agriculture, are amongst the principles driving agricultural policy in the EU today. Although there are no specific nonfood policies, a number of measures related to agri-environment and structural measures in particular, provide opportunities for the development of nonfood crops.

The role of the agricultural sector in reducing greenhouse gas emissions is gaining relevance. Agriculture contributed towards 11 per cent of the EU’s greenhouse gas emissions in 1990, mainly with CH4 and N20 emissions. The agricultural sector has been included in the European Climate Change Programme adopted by the Commission in March 2000 as an area for common action. The working group on agriculture recognizes not only the importance of reducing greenhouse gas emissions associated with agricultural activities, but also the importance of agriculture as a carbon sink and provider of renewable raw materials to the energy and industrial sectors (European Commission, 2001b).

To increase biomass contribution as a renewable energy source, reduce greenhouse gas emissions and promote sustainable rural development, there needs to be a better understanding of the economic and environmental implications of different biofuel chains, their role in an evolving energy sector, and in regional development. The promotion of bioenergy should then be driven by policies aimed at seizing the environmental and rural development benefits of bioenergy in an integrated manner.