In Europe, most of the biofuel used in transportation is essentially sourced from biodiesel, which accounts for 78.2 % of the total energy content (10.9 mil­lion tons in 2011), as opposed to 21 % for bioethanol (2.9 million tons in 2011) (EurObserv’ER 2012).

Compared to USA and Brazil, and also to the European biodiesel sector, the EU fuel alcohol sector is rather small. Nowadays, the monthly production in USA is higher than the EU production per year. In 2008, a record in terms of imports in EU was registered. Total imports of bioethanol (fuel and non-fuel) are estimated to have reached 1.9 billion liters (increasing by 400 million compared to 2007), most of which (between 1.4 and 1.5 billion liters) came from Brazil (ePURE) (Shikida 2002; Ferreira Filho and Horridge 2009).

The EU is the world major player in biodiesel production with a share of 57 % of total world production in 2009. In the same year, biodiesel represented about 73 % of total biofuels produced in Europe (Biofuels-platform 2012).The European 2 Indirect land-use change (ILUC) can occur when land currently cropped for non-energy pro­duction is diverted for biofuel feedstock cultivation. The diverted crops must then be compen­sated for by converting other natural land, usually native systems (Ravindranath et al. 2009). Direct land-use change (dLUC) occurs when additional cropland is made available through the conversion of native ecosystems such as peatlands, forests, and grasslands, as well as by return­ing fallow or abandoned croplands into production. Particularly, when virgin land, such as rain­forest or peatland, is converted to agricultural land, the initial induced carbon losses can only be compensated after many decades of biofuels production (Ravindranath et al. 2009).

biodiesel industry consolidates its position at an international level despite a lower increase in its growth rate of production in 2010 when compared to previous years. For example, with a 9.5 million tons of biodiesel produced in 2010, EU bio­diesel production registered an increase of 5.5 % on the basis of the previous year. However, that stands below the increase in production of 17 % registered in 2009 and in the previous years (35 % in 2008). In 2011, the production decreased by 10 % when compared to 2010 (Fig. 5).

Currently, the production capacity of European biodiesel has reached approximately 22 million tons. The number of existing biodiesel facilities in July 2011 was 254 with a slight increase compared to 2009 due to the start of a few new production units (EBB 2011). This strong industrial basis is the result of considerable investments in biodiesel production planned before 2007. These investments are in reliance to the ambitious objectives for biofuels consumption given by EU authorities (EBB 2010). In 2011, Germany and France remained by far the leading biodiesel producing nations, while Spain confirmed its position of the third European biodiesel producer, ahead of Italy.

Within the EU, the first four largest biodiesel-producing member states that account for two-thirds of total production are Germany (33 % of total European pro­duction), followed by France (18 %), Spain (7 %), and Italy (5.6 %) (EBB 2013). Table 6 shows the biodiesel production and consumption of the countries of EU.

According to the European Biodiesel Board, in the first two-quarters of 2011, for the first time, the entire European production slightly decreased. Increased imports from third countries such as Argentina, Indonesia, and North America are mostly likely to have contributed to lessen European domestic production.

According to the EurObserv’ER (2012), biofuels consumption in transport con­tinued to increase in the UE at a slower pace though. It should stabilize at around 13.9 Mtoe in 2011 compared to 13.6 Mtoe of consumption in 2010. Thus, growth was only 2.7 % between 2010 and 2011, down from 13.9 % between 2009 and 2010, 24.6 % between 2008 and 2009, and 41.7 % between 2007 and 2008.

The biofuel market is very geographically concentrated, with a limited number of member states (Germany, France, Spain, Italy, UK, and Poland) representing over 78 % of EU-27 consumption.

The EU is the world’s largest biodiesel producer, consumer, and importer. The shift from tax incentives to mandates across Europe has been one of the key rea­sons for the growing amount of biodiesel imports. This shift can be attributed to a previous loss in fuel tax revenues for member states, causing a reduction of tax exemptions and compensation via mandates. Without tax exemptions, biodiesel was not price competitive against fossil diesel, even though the price of fossil

diesel increased. Under a mandate, fuel suppliers tend to opt for blending low-cost biofuels causing the increase of biodiesel imports (Ecofys 2011).

Imported biofuels in the EU come from a range of countries, with considerable changes in the list of countries from which the EU imported biofuels year by year, thus reflecting the impact that EU tariff preferences can have on such imports. This is demonstrated in Table 7 that depicts changes in EU biodiesel imports from 2008 to 2010 (European Commission, SEC 130 2011).

Looking at the trade volumes, in 2010, Argentina and Indonesia were the main exporters. The imports from USA and Canada reduced considerably regarding the previous years due to the application of the EU anti-dumping and countervailing duties for biodiesel.