Benefit-Cost Analysis of Biodiesel Production in Korea

The purpose of this study is to take a close look at Korea‘s biodiesel developing trends and assess economic feasibility based on benefit-cost analysis. This study finally presents directions to actively promote the biodiesel in Korea. The role of bio-energy is significantly emphasized due to the continuous rise in oil price and environmental problems. According to some researches that have considered various factors such as breed, productivity, production costs and levels of technology, the most feasible bio-ingredients are rape and barley. By means of the benefit-cost analysis, rape has positive values in the net profits when considered with indirect benefits. Also, it is estimated that rape is feasible when produced in place of barley for double-cropping. Soybean is feasible when cultivated in fallow grounds. When all factors are taken into consideration, the government's support has to be continued in order to reduce a burden of production costs at the initial stage of the biofuel's introduction. It is necessary to develop technology to minimize environmental impact and the requirement of grain production to the extent of the existing cultivation system. Moreover, considering the characteristics of each crop and a detailed strategy on each crop for improving productivity and reducing production cost are required.