Policy regimes and funding schemes to support investment for next‐generation biofuels in the USA and the EU‐27

The production of next-generation biofuels both in the EU-27 and the USA involves producing biofuels beyond the conventional sugar, starch, vegetable oils, and animal-fat-based biofuels now produced commercially. Next-generation biofuels can be derived from non-food crops or agricultural residues, fast-growing trees, forestry, and municipal wastes, etc., and include (cellulosic) ethanol, butanol, methanol, dimethyl ether (DME), Fischer-Tropsch diesel, upgraded pyrolysis oils, microbial drop-in gasoline and diesel substitutes, and biofuels made from microbial oils and algae. The context of policy development for next-generation biofuels both in the USA and the EU-27 is based on the evidence that as demand for biofuels is growing and both the market and policies become more ambitious, a broader variety of feedstocks are needed to meet increasing production and use goals. At the moment, in both regions, policies to support conventional biofuels are still in place, but new strategies are being adopted at a fast rate to build a bridge from first-generation to next-generation biofuels and ensure sustainable supply. This paper presents the background and rationale for the current policy regimes and funding schemes in the USA and EU-27 in relation to next-generation biofuels, gives an update of the current market developments and provides a set of recommendations on the key issues that future policy formation should take into account to efficiently translate the ‘ambitious’ targets into a commercialization prospects. © 2013 Society of Chemical Industry and John Wiley & Sons, Ltd