R&D, demonstration and incentive programmes effectiveness to facilitate and secure market introduction of alternative motor fuels

May 2007

The PREMIA project aims at supporting the European Commission's on-going work on alternative fuels. It provides input into the revision of the biofuels directive and discusses long-term, cost effective policy framework to support the market transition from conventional to alternative fuels for road transport.
The assessment of measures and market conditions related to biofuels introduction in various European member states thus forms a key element of the PREMIA project. The project analysed the production and consumption of biofuels, price evolutions (both for fossil and biofuels), feedstock production, the active policy measures and market conditions (e.g. position of car manufacturers, number of dedicated biofuel fuel stations) in different member states as the experiences gained are very valuable for the future deployment of biofuels all over Europe. This is summarized in chapter 5.
As the right mix of policy instruments for a wide market introduction for biofuels can only be found by looking both at the assessment of past policies while at the same time answering some forward-looking questions, the PREMIA project also looked at the following questions:
What is the state of technology and should there be a special support on some technologies (chapter 2)?;
How far developed is the EU biofuel market (chapter 3)?;
What are the key drivers for biofuel support and how best to achieve them (chapter 4)?;
What are the conditions that influence a member state’s potential and interest in producing and consuming biofuels (chapter 4)?
In order to answer these questions, PREMIA grouped countries based on their economic strength, the energy situation and their suitability in growing bioenergy crops as well as the importance of the agricultural sector for the economy. In addition, possible future policy options were assessed based on the PREMIA biofuel model (Annex 4). This estimates the level of biofuel penetration for different levels of fossil fuel prices and different policy options, taking into account the impacts of biofuel production on the energy and agricultural markets (e.g. through increasing feedstock prices), as changing the level of production and consumption can lead to a reaction of the economy.

By: Premia

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