Market organizing in the European Union's biofuels market: Organizing for favouring, acceptability, and future preferences

Abstract

Abstract Market creation as such is a relevant policy instrument in sustainability transformations that merits further examination. The regulatory creation of the European Union (EU) biofuels market has been a highly contested policy instrument, largely because of its atypical nature, as biofuels became one of the most controversial renewable energies. This paper combines the literature of market organization and meta-organizations as conceptual lenses to analyse the dynamics and challenges of market creation through policy-making with sustainability goals. A longitudinal qualitative analysis of the EU biofuels market in 2003–2015 is conducted to examine contested policy-making and heterogeneous implementation as two key elements shaping the dynamics and outcomes of market organization. The analysis shows that market organization developed as three organizing schemes—favouring a product group, specifying acceptability for the product group, and establishing preferences within the product group—that redefined market boundaries and signalled innovation incentives but potentially undermined the policy goals of market growth. The findings show that this reorganization produced intertemporal discrepancies and tensions between conflicting policy aims, which partly explain the previously observed inconsistencies within transnational market-creation policies. Accordingly, the market organization and meta-organization literature are proposed as useful conceptual tools to analyse sustainability-driven market creation policies.