change server default enconding -Where to set JAVA_OPTS in catalina.sh for UTF8?

["Java Development Team" <java (at) tialios.gr>]

Hi everyone.
Iam trying to change server default enconding from ISO8859_1 to UTF8.
Till now I found 2 differrent solutions. 
The fisrt one is to use the following in my catalina.sh:
set JAVA_OPTS=-Djavax.servlet.request.encoding=UTF-8 -Dfile.encoding=UTF-8

Putting this line in the start of my catalina.sh I get 
Java not starting up, Tomcat not running. 
Does anyone know how to fix this , if any specific .jars needed etc...

The second one is to use filters which i will try if dont get any luck with the above which seems to be more efficient solution. 

Thank you
Zis