The EU Renewable Energy Directive (EU-RED) established sustainability criteria for biofuels counted under the target of 10% renewable energy for transport. The main approach thus far to certify compliance with the sustainability criteria has been voluntary schemes that are submitted for approval to the European Commission.

Scant attention has been paid to the potential role of bilateral agreements in fulfilling the sustainability criteria, which could offer a more strategic approach. This paper examines the role and potential applicability and effectiveness of the bilateral option based on Article 18(4) of the EU-RED. Of special interest is the question of how bilateral agreements might provide a more flexible governance mechanism for meeting sustainability criteria in developing countries that export to the EU while also addressing more general land use policies and cross-sector linkages in natural resource management.

As there are no existing bilateral agreements related to biofuels in the EU, we draw some lessons from the examples of the EU Forest Law Enforcement Governance and Trade (FLEGT) initiative and EU Economic Partnership Agreements (EPAs). These examples together with the market experience to date suggest a useful role for bilateral agreements in more effectively addressing the sustainability of imported biofuels.

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