Biofuels are more environmentally friendly than fossil fuels but not necessarily sustainable. This article describes the legal power of the European Union (EU)—and the use of this power—to promote the sustainable use of the biofuels by formally binding criteria. The sustainability criteria laid down in the Renewable Energy Directive (RED) is analyzed, and explained is how it differentiates among biofuels on the basis of their environmental sustainability related to their processes and production methods. The use of these criteria has the twofold goal of making it possible to reduce greenhouse gas emissions caused by the use of fuels and to prevent the conversion of land characterized by high-carbon stock and high biodiversity for biofuel production. The EU rules do not prohibit trade of nonsustainable biofuels. The RED and the Fuel Quality Directive prohibit member states from counting nonsustainable biofuels as part of the fulfillment of their renewable energy obligations, and the European Community guidelines on environmental support are depriving the suppliers of nonsustainable biofuels from getting economic support. These EU rules may effectively eliminate the interest of the business in placing nonsustainable biofuels on the EU market. Thus, the EU exerts exterritorial jurisdiction by the way of the sustainability criteria. Only those sustainability criteria related to agroenvironmental practices are without effect on biofuel production outside the EU. The possible incompatibility of the EU rules and sustainability criteria with the World Trade Organization rules is discussed briefly. Mentioned are other examples of extraterritorial EU environmental criteria/schemes and several indications on the acceptance of such transnational protection of the environment.

Environmental Practice 15:50–61 (2013)