Biofuels are increasingly being promoted as substitute fuels in the transport sector. Many countries are establishing support measures for the production and use of such fuels, in order to boost the development of the industry. Biofuels are expected to become increasingly competitive to conventional fuels, and to increase their share of the market, in the coming years. This development, where the production and consumption of these fuel types is expanded, is mainly driven by public policies, expressed through biofuels policy mandates or renewable energy goals. In 2009 the European Union adopted the Renewable Energy Directive. This directive contains, among other things, a goal of increasing the share of renewable energy in the transport sector to 10% by 2020. This proportion shall mainly be accomplished through the use of biofuels. The goal from the Renewable Energy Directive is ambitious, and the implementation of it is likely to have severe influence on the world’s biofuels scene, as the majority of crops for the production will have to be imported. Biofuels are promoted for three main reasons in the European Union. First of all they are promoted as a renewable energy source, since these fuels are regarded as carbon neutral, they do not increase the amount of green-house gases in the atmosphere. Biofuels are also promoted as an alternative energy source, as they constitute a measure to reduce the Community’s energy dependence. In addition, biofuels are seen as an innovative energy source, whose development contributes to the development of rural areas. At the same time are these three biofuels assumptions questioned by a growing critical literature that surrounds the policy. This thesis describes the development of the biofuels policy of the European Union. The policy area of biofuels was established more or less a direct consequence of the energy situation created by the oil crisis in the 1970s. Over the years the policy area develops from a Member State to a Community level competence, resulting in a common policy through the adoption of the Renewable Energy Directive in 2009. The development has also been of a policy field that is becoming increasingly complex as new concerns are introduced to the policy. The institutional characteristics of the EU system are influencing the development of the policy. Both regarding the placement of power either on Member State level, or at Community level, and regarding the framing of the policy in connection to the three policy areas to which it relates. The story of the development of the EU’s biofuels policy is also one where the influence from the surrounding context is important.