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Subsidy modes, waste cooking oil and biofuel: Policy effectiveness and sustainable supply chains in China

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  • Zhang, Huiming
  • Li, Lianshui
  • Zhou, Peng
  • Hou, Jianmin
  • Qiu, Yueming

Abstract

Many countries are concerned with the waste-to-energy for economic development and societal welfare. This paper constructs a dynamic game model that, for the first time compares the incentive effects of four common subsidy modes on waste cooking oil supply for biofuel refining and sales of waste cooking oil refined products. The model considers the impact of preferential tax treatment, a raw material subsidy, a sales subsidy and an investment subsidy on the profits of biofuel enterprises and waste cooking oil recyclers. Results indicate that common approaches adopted in developed economies such as raw material price subsidies and finished products sales subsidies increase the profits of both biofuel enterprises and recyclers. On the contrary, investment subsidies, which are relatively common in some regions of China, increase the profits of recyclers, while reducing revenues achieved by biofuel enterprises. To promote the supply chain, policy should give priority to raw material price subsidies and finished products sales subsidies, and for investment subsidies, however, the government should be cautious.

Suggested Citation

  • Zhang, Huiming & Li, Lianshui & Zhou, Peng & Hou, Jianmin & Qiu, Yueming, 2014. "Subsidy modes, waste cooking oil and biofuel: Policy effectiveness and sustainable supply chains in China," Energy Policy, Elsevier, vol. 65(C), pages 270-274.
    • Handle: RePEc:eee:enepol:v:65:y:2014:i:c:p:270-274
    DOI: 10.1016/j.enpol.2013.10.009
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    Cited by:

    1. Zhang, Huiming & Xu, Zhidong & Zhou, Dequn & Cao, Jie, 2017. "Waste cooking oil-to-energy under incomplete information: Identifying policy options through an evolutionary game," Applied Energy, Elsevier, vol. 185(P1), pages 547-555.
    2. Wang, Zhanwu & Wang, Zhenfeng & Tahir, Nadeem & Wang, Heng & Li, Jin & Xu, Guangyin, 2020. "Study of synergetic development in straw power supply chain: Straw price and government subsidy as incentive," Energy Policy, Elsevier, vol. 146(C).
    3. Zhao, Yuanhao & Wang, Changbo & Zhang, Lixiao & Chang, Yuan & Hao, Yan, 2021. "Converting waste cooking oil to biodiesel in China: Environmental impacts and economic feasibility," Renewable and Sustainable Energy Reviews, Elsevier, vol. 140(C).
    4. Shi, Yi & Deng, Yawen & Wang, Guoan & Xu, Jiuping, 2020. "Stackelberg equilibrium-based eco-economic approach for sustainable development of kitchen waste disposal with subsidy policy: A case study from China," Energy, Elsevier, vol. 196(C).
    5. Gurunathan Manikandan & P. Rajesh Kanna & Dawid Taler & Tomasz Sobota, 2023. "Review of Waste Cooking Oil (WCO) as a Feedstock for Biofuel—Indian Perspective," Energies, MDPI, vol. 16(4), pages 1-17, February.
    6. Qiuyun Zhu & Xiaoyang Zhou & Aijun Liu & Chong Gao & Lei Xu & Fan Zhao & Ding Zhang & Benjamin Lev, 2022. "Equilibrium Optimization with Multi-Energy-Efficiency-Grade Products: Government and Market Perspective," Energies, MDPI, vol. 15(19), pages 1-23, October.
    7. Fan, Lurong & Wang, Binyu & Song, Xiaoling, 2023. "An authority-enterprise equilibrium differentiated subsidy mechanism for promoting coalbed methane extraction in multiple coal seams," Energy, Elsevier, vol. 263(PA).
    8. Zhang, Huiming & Zheng, Yu & Cao, Jie & Qiu, Yueming, 2017. "Has government intervention effectively encouraged the use of waste cooking oil as an energy source? Comparison of two Chinese biofuel companies," Energy, Elsevier, vol. 140(P1), pages 708-715.
    9. Zhang, Huiming & Aytun Ozturk, U. & Wang, Qunwei & Zhao, Zengyao, 2014. "Biodiesel produced by waste cooking oil: Review of recycling modes in China, the US and Japan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 677-685.
    10. Zhou, Yuanqi & Yang, Jinqiang & Jia, Zhijie, 2023. "Optimizing energy efficiency investments in steel firms: A real options model considering carbon trading and tax cuts during challenging economic conditions," Resources Policy, Elsevier, vol. 85(PA).
    11. Yuyin Yi & Jinxi Li, 2018. "Cost-Sharing Contracts for Energy Saving and Emissions Reduction of a Supply Chain under the Conditions of Government Subsidies and a Carbon Tax," Sustainability, MDPI, vol. 10(3), pages 1-33, March.
    12. Shi, Yi & Xu, Jiuping, 2023. "A multi-objective approach to kitchen waste and excess sludge co-digestion for biomethane production with anaerobic digestion," Energy, Elsevier, vol. 262(PA).
    13. George Halkos & Kleoniki Natalia Petrou, 2019. "Analysing the Energy Efficiency of EU Member States: The Potential of Energy Recovery from Waste in the Circular Economy," Energies, MDPI, vol. 12(19), pages 1-32, September.
    14. Cho, Sangmin & Kim, Jihyo & Park, Hi-Chun & Heo, Eunnyeong, 2015. "Incentives for waste cooking oil collection in South Korea: A contingent valuation approach," Resources, Conservation & Recycling, Elsevier, vol. 99(C), pages 63-71.
    15. Fan, Lurong & Ma, Ning & Zhang, Wen, 2023. "Multi-stakeholder equilibrium-based subsidy allocation mechanism for promoting coalbed methane scale extraction-utilization," Energy, Elsevier, vol. 277(C).

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