Second generation biofuels will be an attractive investment proposition, according to a new report released this week. The report, ‘The European Biofuels Challenge - Developments in European Union Policy and Industry Drivers’, says that quality not quantity will be the most considered factor when biofuels are being considered for production and use and that there will be a high premium placed on carbon savings and sustainability credentials for biofuels.

The report finds that only products with the most sustainable certification and standards will be able to sell at a premium. Similarly subsidies to non-sustainable products will cease, it says. There has already been significant investment in second generation biofuels plants in several countries within the EU, notably those that are trying to produce cellulosic ethanol and biofuel from algae.

The European Union has been under pressure from environmental groups who have been actively campaigning for it to reconsider its energy policies as biofuels made from food crops like corn or beet which have been implicated in the global rise of food prices as well as harming the environment.

“There is an increasing awareness that all biofuels are not equal. Research is pointing out that second generation biofuels could offer great benefits in the quest for alternative energy,” said Urmila Doraswami, the report’s author. “The biofuel industry is also taking its lead from the fact that ‘better’ biofuels need to be prioritised over ‘more’ biofuels and investment is reflecting this trend,” she added.

“The European Biofuels Challenge - Developments in European Union Policy and Industry Drivers” is a critical review of the debate concerning large-scale biofuel use and is available as a free download at http://www.reportbuyer.com/go/RBY00011.