This paper presents an assessment of the potential impact of the EUs biofuel directive on European land use and biodiversity. In a spatially explicit analysis, it is determined which ecologically valuable land use types are likely to be directly replaced by biofuel crops. In addition, it is determined which land use types may be indirectly replaced by biofuel crops through competition over land between biofuel and food crops. Four scenarios of land use change are analyzed for the period 2000-2030 while for each scenario two policy variants are analyzed respectively with and without implementation of the biofuel directive. The results indicate that the area of semi natural vegetation, forest and High Nature Value farmland directly replaced by biofuel crops is small in all scenarios and differs little between policy variants. The direct effects of the directive on European land use and biodiversity therefore are relatively minor. The indirect effects of the directive on European land use and biodiversity are much larger than its direct effects. The area semi natural vegetation is found to be 3-8% smaller in policy variants with the directive as compared to policy variants without the directive. In contrast, little difference is found between the policy variants with respect to the forest area. The results of this study show that the expected indirect effects of the directive on biodiversity are much greater than its direct effects. This suggests that indirect effects need to be taken explicitly into account in assessing the environmental effects of biofuel crop cultivation and designing sustainable pathways for implementing biofuel policies. © 2010 Elsevier Ltd.