The utilisation of biofuels is attracting growing support from the European Union and member states as a strategy to tackle climate change, enhance energy security, and contribute to regional development. This paper describes, compares, and analyses the markets for biofuels in Germany and the UK. The introduction of biofuels for transport in these member states provides contrasting pictures, and the success or failure of biofuels here is pertinent to the development and diffusion of biofuels across Europe. This paper concentrates on the socio-political context for the biofuels industry in Germany and the UK, discusses the lessons learned from the German and British experiences, and presents general conclusions for policy-makers that are predominantly relevant for the early stages of a biofuels industry. (c) 2006 Elsevier Ltd. All rights reserved.