The European Landscape for Biofuels in the Transport Sector

Publication Date	May 2007
Publisher	Datamonitor
Product Type	Brief
Pages	26
ISBN Number	not applicable
Product Code	DAT05155

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Summary

Introduction

Biofuels are experiencing strong growth across Europe. As a result the manufacturers and retailers of biodiesel and bioethanol, as well as other industry stakeholders, need to be aware of the varying penetration rates within member states. This brief assesses the fiscal, economic and market based factors that are encouraging the use of biofuels across six major European markets.

Scope

An analysis of the legislation surrounding biofuels, both at the European Union and national level, and how it has affected demand for the product.
An assessment of the current production and availability of biofuels at service stations in six key European markets and how this is likely to change.
Insight into the roles played by different stakeholders within the biofuels sector in each market including agriculture, fuel producers, fuel suppliers and automotive manufacturers.
An understanding of what is driving consumer demand for biofuels, including the main tax rebates as well as other consumer-driven factors.

Highlights

Alongside support from the EU, Germany and Sweden have long been proponents of biofuels at a national level. In order to promote biofuels use, their respective governments offer an array of incentives, many of which are being adopted by other member states. Examples include reductions on fuel duty, free car parking and exemptions on road charges.

France and Germany have the largest production capacity for biofuels in Europe, whilst biofuels consumption and the associated supply network is most significant in Germany and Sweden. Unlike Germany, Sweden produces a relatively small amount of biofuels at 123,000 tonnes per annum, making it heavily reliant on imports to satisfy demand.

The high level of importance placed on environmental issues by European consumers is likely to be a key driver for biofuels over the next few years; a Datamonitor survey revealed that over half of consumers in all of the major European countries, apart from Italy, agreed that "it is important to buy socially responsible products".

Reasons to Purchase

Understand the key legislative drivers of the biofuel industry and assess their impact on production levels and motorist demand.
Compare bioethanol and biodiesel capacity, production and consumption levels across six European markets and identify the key manufacturers.
Uncover the size of the biofuels service station network in selected markets and identify the key retailers of bioethanol and biodiesel.

Content

Catalyst
Summary
Analysis
- Alongside support from the EU, governments in Germany and Sweden have long been strong proponents of biofuels
- The EU's Biofuels Directive has been the principal supranational driver for the uptake of biodiesel and bioethanol
- The EU's Energy Crop Premium has helped spur the cultivation of crops for the production of biofuels
- Strong political support for the use of biofuels has led to the highest uptake in Sweden and Germany
- Germany's socialist/green coalition was a key factor in making it Europe's largest consumer of biofuels
- Multi-faceted support for the use of biofuels in Sweden has led to high penetration
- Political commitment and partnerships with agriculture have made France a leading consumer of biofuels
- Poor implementation of targets for biofuels in Spain and Italy has led to limited uptake
- The UK government's scepticism of biofuels has restrained consumption
- In member states obligations on fuel retailers to sell biofuels will be a significant market driver going forward
- In member states obligations on fuel retailers to sell biofuels will be a significant market driver going forward
- The biofuels market in Germany has been aided by a strong production base, filling station network and vehicle availability
- The capacity to produce biofuels is strongest in France and Germany
- Germany has the largest production base for biofuels in Europe, but is having to reduce output
- Sweden's high level of biofuels utilization is heavily reliant on imports
- In France, enthusiasm from agriculture and industry has created a strong production base for biofuels
- The UK's production base is small and is suffering from overcapacity
- Italy and Spain are significant producers of biofuels despite limited consumption at the national level
- The retail network for high blended biofuels is strongest in Germany and Sweden
- Ethanol is widely blended into regular fuels in Sweden
- Availability of biofuels in France and Germany is amongst the highest in Europe
- The network for biofuels is set to grow rapidly in Spain and Italy
- Biodiesel and bioethanol are only available at a minority of UK service stations
- Swedish car manufacturers are the most enthusiastic supporters of biofuels
- Swedish and French car manufacturers have been the most supportive of biofuels
- German car manufacturers have shown mixed enthusiasm for biofuels
- Tax rebates and increasing environmental concern have been key in boosting demand for biofuels in Germany and Sweden
- The adoption of biofuels has been most successful in countries with generous fiscal incentives such as Sweden
- Users of biofuels in Sweden, Italy and Spain benefit from the highest levels of tax relief
- Consumers in Germany, the UK and France benefit from partial tax rebates on biofuels
- The high level of importance placed on environmental issues in Germany and Sweden have influenced biofuel sales
Appendix
- Definitions
- Sources
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
List Of Figures
- Figure 1: Germany put 0.65% of its non-fallow farmland under the Energy Crop premium scheme in 2004
- Figure 2: Germany consumed more than 2,000 million litres of biodiesel in 2005
- Figure 3: 98% of the biofuel used in Sweden in 2005 was bioethanol
- Figure 4: France consumes almost equal amounts of biodiesel and bioethanol
- Figure 5: The UK only used 120 million litres of biofuel in 2005
- Figure 6: Biofuel obligations
- Figure 7: Germany's biodiesel production grew by over 60% between 2004 and 2005
- Figure 8: Sweden produced 122,000 tonnes of bioethanol in 2005
- Figure 9: France produced 492,000 tonnes of biodiesel in 2005
- Figure 10: The UK produced 51,000 tonnes of biodiesel in 2005
- Figure 11: OKQ8 has 214 sites retailing E85 in Sweden
- Figure 12: Total UK has 331 sites retailing biodiesel in the UK
- Figure 13: Saab, Volvo and Citroen are strong supporters of biofuels
- Figure 14: Selected German car brands have demonstrated enthusiasm for biofuels
- Figure 15: Opting for green energy is one behavioural aspect of rising environmental attitudes