IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v14y2010i8p2426-2433.html
   My bibliography  Save this article

Market penetration of biodiesel

Author

Listed:
  • Szulczyk, Kenneth R.
  • McCarl, Bruce A.

Abstract

This research examines in detail the technology and economics of substituting biodiesel for diesel #2. This endeavor examines three areas. First, the benefits of biodiesel are examined, and the technical problems of large-scale implementation. Second, the biodiesel production possibilities are examined for soybean oil, corn oil, tallow, and yellow grease, which are the largest sources of feedstocks for the United States. Examining in detail the production possibilities allows to identity the extent of technological change, production costs, byproducts, and greenhouse gas (GHG) emissions. Finally, a U.S. agricultural model, FASOMGHG was used to predict market penetration of biodiesel, given technological progress, variety of technologies and feedstocks, market interactions, energy prices, and carbon dioxide equivalent prices. FASOMGHG has several interesting results. First, diesel fuel prices have an expansionary impact on the biodiesel industry. The higher the diesel fuel prices, the more biodiesel is produced. However, given the most favorable circumstances, the maximum biodiesel market penetration is 9% in 2030 with a wholesale diesel price of $4 per gallon. Second, the two dominant sources of biodiesel are from corn and soybeans. Sources like tallow and yellow grease are more limited, because they are byproducts of other industries. Third, GHG prices have an expansionary impact on the biodiesel prices, because biodiesel is quite GHG efficient. Finally, U.S. government subsidies on biofuels have an expansionary impact on biodiesel production, and increase market penetration at least an additional 3%.

Suggested Citation

  • Szulczyk, Kenneth R. & McCarl, Bruce A., 2010. "Market penetration of biodiesel," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(8), pages 2426-2433, October.
  • Handle: RePEc:eee:rensus:v:14:y:2010:i:8:p:2426-2433
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364-0321(10)00146-2
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lewandrowski, Jan & Peters, Mark & Jones, Carol & House, Robert & Sperow, Mark & Eve, Marlene & Paustian, Keith, 2004. "Economics of Sequestering Carbon in the U.S. Agricultural Sector," Technical Bulletins 184317, United States Department of Agriculture, Economic Research Service.
    2. Heng‐Chi Lee & Bruce A. McCarl & Dhazn Gillig, 2005. "The Dynamic Competitiveness of U.S. Agricultural and Forest Carbon Sequestration," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(4), pages 343-357, December.
    3. Schneider, Uwe A. & McCarl, Bruce A., 2005. "Implications of a Carbon-Based Energy Tax for U.S. Agriculture," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(2), pages 1-15, October.
    4. Uwe Schneider & Bruce McCarl, 2003. "Economic Potential of Biomass Based Fuels for Greenhouse Gas Emission Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(4), pages 291-312, April.
    5. Konyar, Kazim & Howitt, Richard E., 2000. "The Cost Of The Kyoto Protocol To U.S. Crop Production: Measuring Crop Price, Regional Acreage, Welfare, And Input Substitution Effects," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-21, December.
    6. RICHARD M. Adams & DARIUS M. Adams & JOHN M. Callaway & CHING‐CHENG Chang & BRUCE A. Mccarl, 1993. "Sequestering Carbon On Agricultural Land: Social Cost And Impacts On Timber Markets," Contemporary Economic Policy, Western Economic Association International, vol. 11(1), pages 76-87, January.
    7. Lewandrowski, Jan & Peters, Mark & Jones, Carol Adaire & House, Robert M. & Sperow, Mark & Eve, Marlen & Paustian, Keith H., 2004. "Economics Of Sequestering Carbon In The U.S. Agricultural Sector," Technical Bulletins 33569, United States Department of Agriculture, Economic Research Service.
    8. Barnwal, B.K. & Sharma, M.P., 2005. "Prospects of biodiesel production from vegetable oils in India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 9(4), pages 363-378, August.
    9. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39, pages 137-137.
    10. Srivastava, Anjana & Prasad, Ram, 2000. "Triglycerides-based diesel fuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 4(2), pages 111-133, June.
    11. Bruce McCarl & Darius Adams & Ralph Alig & John Chmelik, 2000. "Competitiveness of biomass‐fueled electrical power plants," Annals of Operations Research, Springer, vol. 94(1), pages 37-55, January.
    12. J. Callaway & Bruce McCarl, 1996. "The economic consequences of substituting carbon payments for crop subsidies in U.S. agriculture," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(1), pages 15-43, January.
    13. Antle, John M. & Capalbo, Susan Marie & Mooney, Sian & Elliott, Edward T. & Paustian, Keith H., 2001. "Economic Analysis Of Agricultural Soil Carbon Sequestration: An Integrated Assessment Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(2), pages 1-24, December.
    14. Antle, John M. & Capalbo, Susan M. & Johnson, James B. & Miljkovic, Dragan, 1999. "The Kyoto Protocol: Economic Effects of Energy Prices on Northern Plains Dryland Grain Production," Agricultural and Resource Economics Review, Cambridge University Press, vol. 28(1), pages 96-105, April.
    15. Duffield, James A. & Shapouri, Hosein & Graboski, Michael S. & McCormick, Robert & Wilson, Richard, 1998. "U.S. Biodiesel Development: New Markets for Conventional and Genetically Modified Agricultural Products," Agricultural Economic Reports 34029, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kumar, Sunil & Chaube, Alok & Jain, Shashi Kumar, 2012. "Critical review of jatropha biodiesel promotion policies in India," Energy Policy, Elsevier, vol. 41(C), pages 775-781.
    2. Silitonga, A.S. & Atabani, A.E. & Mahlia, T.M.I. & Masjuki, H.H. & Badruddin, Irfan Anjum & Mekhilef, S., 2011. "A review on prospect of Jatropha curcas for biodiesel in Indonesia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(8), pages 3733-3756.
    3. Chakrabarti, Mohammed Harun & Ali, Mehmood & Usmani, Jafar Nazir & Khan, Nasim Ahmed & Hasan, Diya'uddeen Basheer & Islam, Md. Sakinul & Abdul Raman, Abdul Aziz & Yusoff, Rozita & Irfan, Muhammad Fais, 2012. "Status of biodiesel research and development in Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4396-4405.
    4. Palash, S.M. & Kalam, M.A. & Masjuki, H.H. & Masum, B.M. & Rizwanul Fattah, I.M. & Mofijur, M., 2013. "Impacts of biodiesel combustion on NOx emissions and their reduction approaches," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 473-490.
    5. Maung, Thein A. & McCarl, Bruce A., 2013. "Economic factors influencing potential use of cellulosic crop residues for electricity generation," Energy, Elsevier, vol. 56(C), pages 81-91.
    6. Szulczyk, Kenneth R. & Badeeb, Ramez Abubakr, 2022. "Nontraditional sources for biodiesel production in Malaysia: The economic evaluation of hemp, jatropha, and kenaf biodiesel," Renewable Energy, Elsevier, vol. 192(C), pages 759-768.
    7. Perdiguero, Jordi & Jiménez, Juan Luis, 2011. "Sell or not sell biodiesel: Local competition and government measures," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(3), pages 1525-1532, April.
    8. Du, Xiaodong & Carriquiry, Miguel A., 2013. "Spatiotemporal analysis of ethanol market penetration," Energy Economics, Elsevier, vol. 38(C), pages 128-135.
    9. Varatharajan, K. & Cheralathan, M., 2012. "Influence of fuel properties and composition on NOx emissions from biodiesel powered diesel engines: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(6), pages 3702-3710.
    10. Mofijur, M. & Masjuki, H.H. & Kalam, M.A. & Hazrat, M.A. & Liaquat, A.M. & Shahabuddin, M. & Varman, M., 2012. "Prospects of biodiesel from Jatropha in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 5007-5020.
    11. White, Eric M. & Latta, Greg & Alig, Ralph J. & Skog, Kenneth E. & Adams, Darius M., 2013. "Biomass production from the U.S. forest and agriculture sectors in support of a renewable electricity standard," Energy Policy, Elsevier, vol. 58(C), pages 64-74.
    12. Shafiei, Ehsan & Davidsdottir, Brynhildur & Leaver, Jonathan & Stefansson, Hlynur & Asgeirsson, Eyjolfur Ingi & Keith, David R., 2016. "Analysis of supply-push strategies governing the transition to biofuel vehicles in a market-oriented renewable energy system," Energy, Elsevier, vol. 94(C), pages 409-421.
    13. Kumar, Sunil & Chaube, Alok & Jain, Shashi Kumar, 2012. "Sustainability issues for promotion of Jatropha biodiesel in Indian scenario: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1089-1098.
    14. Alizadeh, Reza & Lund, Peter D. & Soltanisehat, Leili, 2020. "Outlook on biofuels in future studies: A systematic literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    15. Atadashi, I.M. & Aroua, M.K. & Abdul Aziz, A.R. & Sulaiman, N.M.N., 2012. "Production of biodiesel using high free fatty acid feedstocks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 3275-3285.
    16. E, Jiaqiang & Pham, Minhhieu & Zhao, D. & Deng, Yuanwang & Le, DucHieu & Zuo, Wei & Zhu, Hao & Liu, Teng & Peng, Qingguo & Zhang, Zhiqing, 2017. "Effect of different technologies on combustion and emissions of the diesel engine fueled with biodiesel: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 620-647.
    17. Trumbo, Jennifer L. & Tonn, Bruce E., 2016. "Biofuels: A sustainable choice for the United States' energy future?," Technological Forecasting and Social Change, Elsevier, vol. 104(C), pages 147-161.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Szulczyk, Kenneth R. & McCarl, Bruce A. & Cornforth, Gerald, 2010. "Market penetration of ethanol," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 394-403, January.
    2. van Kooten, G. Cornelis & Sohngen, Brent, 2007. "Economics of Forest Ecosystem Carbon Sinks: A Review," International Review of Environmental and Resource Economics, now publishers, vol. 1(3), pages 237-269, September.
    3. G. Cornelis van Kooten & Susanna Laaksonen-Craig & Yichuan Wang, 2007. "Costs of Creating Carbon Offset Credits via Forestry Activities: A Meta-Regression Analysis," Working Papers 2007-03, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    4. van Kooten, G. Cornelis, 2004. "Economics of Forest and Agricultural Carbon Sinks," Working Papers 18160, University of Victoria, Resource Economics and Policy.
    5. Uwe A. Schneider & Michael Obersteiner & Erwin Schmid & Bruce A. McCarl, 2007. "Agricultural adaptation to climate policies under technical change," Working Papers FNU-133, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2008.
    6. Povellato, Andrea & Bosello, Francesco & Giupponi, Carlo, 2007. "A Review of Recent Studies on Cost Effectiveness of GHG Mitigation Measures in the European Agro-Forestry Sector," Natural Resources Management Working Papers 10268, Fondazione Eni Enrico Mattei (FEEM).
    7. Schneider, Uwe A. & McCarl, Bruce A., 2005. "Implications of a Carbon-Based Energy Tax for U.S. Agriculture," Agricultural and Resource Economics Review, Cambridge University Press, vol. 34(2), pages 265-279, October.
    8. Heng-Chi Lee & Bruce McCarl & Uwe Schneider & Chi-Chung Chen, 2007. "Leakage and Comparative Advantage Implications of Agricultural Participation in Greenhouse Gas Emission Mitigation," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(4), pages 471-494, May.
    9. Kim, Man-Keun & Peralta, Denis & McCarl, Bruce A., 2014. "Land-based greenhouse gas emission offset and leakage discounting," Ecological Economics, Elsevier, vol. 105(C), pages 265-273.
    10. Ifft, Jennifer E. & Spini, Pietro & Wilcox, Steven, 2018. "The distributional implications of carbon taxation for U.S. crop farms," 2018 Annual Meeting, August 5-7, Washington, D.C. 274423, Agricultural and Applied Economics Association.
    11. Tas Thamo & David J. Pannell & Marit E. Kragt & Michael J. Robertson & Maksym Polyakov, 2017. "Dynamics and the economics of carbon sequestration: common oversights and their implications," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(7), pages 1095-1111, October.
    12. Seong-Hoon Cho & Bijay P. Sharma, 2020. "Optimal spatial budget distribution of forest carbon payments that balances the returns and risks associated with conservation costs," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(8), pages 7239-7267, December.
    13. Munnich Vass, Miriam & Elofsson, Katarina, 2013. "Is forest sequestration at the expense of bioenergy and forest products cost-effective in EU climate policy to 2050?," Working Paper Series 2013:9, Swedish University of Agricultural Sciences, Department Economics.
    14. Monge, Juan J. & Bryant, Henry L. & Gan, Jianbang & Richardson, James W., 2016. "Land use and general equilibrium implications of a forest-based carbon sequestration policy in the United States," Ecological Economics, Elsevier, vol. 127(C), pages 102-120.
    15. Tsai, Wen-Tien & Lin, Chih-Chung & Yeh, Ching-Wei, 2007. "An analysis of biodiesel fuel from waste edible oil in Taiwan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 11(5), pages 838-857, June.
    16. Jung, Martina, 2003. "The Role of Forestry Sinks in the CDM - Analysing the Effects of Policy Decisions on the Carbon Market," Discussion Paper Series 26293, Hamburg Institute of International Economics.
    17. van Kooten, G. Cornelis & Eagle, Alison J. & Manley, James G. & Smolak, Tara M., 2004. "How Costly Are Carbon Offsets? A Meta-Analysis Of Carbon Forest Sinks," Working Papers 18166, University of Victoria, Resource Economics and Policy.
    18. Singh, S.P. & Singh, Dipti, 2010. "Biodiesel production through the use of different sources and characterization of oils and their esters as the substitute of diesel: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 200-216, January.
    19. Andres Quintero, Julian & Ruth Felix, Erika & Eduardo Rincón, Luis & Crisspín, Marianella & Fernandez Baca, Jaime & Khwaja, Yasmeen & Cardona, Carlos Ariel, 2012. "Social and techno-economical analysis of biodiesel production in Peru," Energy Policy, Elsevier, vol. 43(C), pages 427-435.
    20. Dumortier, Jerome & Elobeid, Amani, 2021. "Effects of a carbon tax in the United States on agricultural markets and carbon emissions from land-use change," Land Use Policy, Elsevier, vol. 103(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:14:y:2010:i:8:p:2426-2433. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.