The aim of this target is to secure specific reductions in greenhouse gas emission associated with all aspects of production and use of energy used for road transport and non-road mobile machinery.

The contribution towards these targets from biofuels is expected to be significant [1]. Therefore, it is important that biofuel production is sustainable. In order to avoid negative side-effects both Directives (hereafter referred to as "the Directives") include the most comprehensive and advanced sustainability scheme anywhere in the world. They impose a number of sustainability criteria that economic operators need to meet in order for biofuels to be counted towards the legislative targets and qualify for support schemes [2]. These criteria aim at preventing the conversion of areas of high carbon stock and high biodiversity for the production of raw materials for biofuels. Moreover, they also require biofuels to achieve minimum greenhouse gas emission savings of 35% compared to fossil fuels. This requirement is progressive as it increases to 50% in 2017 and 60% in 2018 for new installations.

The sustainability criteria [3] may have an impact in commodity markets broader than biofuels, potentially enhancing sustainable production of agricultural raw materials as a side-effect. However, due to growing global demand for agricultural commodities there is a risk that part of the demand for biofuels will be met through an increase in the amount of land devoted to agriculture worldwide.

Therefore, the Directives require the Commission to report to the European Parliament and to the Council by 31 December 2010, reviewing the impact of indirect land-use change on greenhouse gas emissions and addressing ways to minimise that impact [4]. The report should, if appropriate, be accompanied by a proposal, based on the best available scientific evidence, containing a concrete methodology for emissions from carbon stock changes caused by indirect land-use change [5].

Although land-use change can have a wide range of positive and negative impacts (i.e. greenhouse gas emissions, biodiversity, social issues, etc), this report focuses on the consequences for the greenhouse gas emissions of biofuels, as required by the Directives. The Commission will analyse wider sustainability impacts associated with the promotion of biofuels in the Renewable Energy Directive's biennial reports to the European Parliament and the Council from 2012 onwards. Moreover, the Commission believes that it is important to tackle indirect land-use change for biofuels through a holistic approach considering, comparatively, the life-cycle sustainability of fuels used in the transport sector. This will also be considered in the forthcoming impact assessment.

1 The recently submitted National Renewable Energy Action Plans estimate that biofuels will represent around 9% of the total energy consumption in transport in 2020.

2 The sustainability criteria also apply to 'bioliquids' used for electricity or heating and cooling.

3 The Commission adopted in June 2010, two Communications aimed at facilitating the implementation of the sustainability criteria included in the Directives including through recognition of voluntary schemes.

4 The requirement in the Renewable Energy Directive also applies to bioliquids. As such, references to biofuels in this report will also apply to bioliquids where appropriate.

5 Article 7d(6) of Directive 2009/30/EC and Article 19(6) of Directive 2009/28/EC