Biofuels for transport had a long history prior to their formal introduction in the European Union by means of formal directives in 2003 and 2009. Dating back to years before the First World War, busses were already rolling in Paris on a mixture of ethanol and petrol. Between 1920 and 1950 the French continued using sugar-beetbased ethanol as a tool to improve energy independence and reduce trade deficits (Kutas et al, 2007 p. 15). Ethanol utilization as a fuel blend only fell once oil prices achieved record lows in the 1960´s, as large reserves started being tapped in the middle-east.
In the 1970s oil price shocks brought concerns about the European dependence on foreign energy, and the following decades saw many actions which started to change the biofuels panorama in Europe. By 1973 biodiesel research was already being conducted in Wieselburg, Austria, and in 1982 the country had its first pilot plant for biodiesel (producing fatty-acid methyl ester - FAME). After successful experiences with ethanol in Brazil, the first European directive which opened potential large markets for biofuels in Europe was the Council Directive 85/536/ECC, which authorized blends of 5% ethanol and 15% Ethyl Tertiary Butyl Ether (ETBE, a bioether) on petrol. The usage of bioethanol for blending, however, was hampered by the low prices of oil products which marked the late 1980s and most of the 1990s (the same reasons which dealt a blow to the Brazilian ethanol program during that time).
In tandem with the development of biofuels in Europe, carbon emissions were already consolidated in scholarly literature as the major causal factor behind climate change (Nordhaus, 1983; Daansgaard, 1993). Since the UN's Brundtland commission report from 1987, alternatives to de-carbonize the transport sector were in high demand, but the deployment of alternatives was hampered by a conjuncture of low oil prices. The following years in the 1990s were instrumental for the emergence of the modern environmental policy pursued by the EU, which became rooted in its commitment to the Rio-92 conference and later commitment to the Kyoto protocol. Early in that decade the first attempt at biofuel-promotion legislation at the EU level took place, while at national levels the adoption of technical standards for biofuels gained steam.