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Effects Of A Potential New Biofuel Directive On Eu Land Use And Agricultural Markets

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  • Banse, Martin
  • Grethe, Harald

Abstract

In its Progress Report on Biofuels the European Commission proposes a more restrictive biofuel directive which sets a mandatory minimum share of biofuels in total fuel consumption in the transport sector of 10% per Member State by 2020. This is likely to have a strong impact on demand for biofuel inputs such as plant oils, cereals and sugar beet. To analyze the effects of this proposal on land use and agricultural markets, an extended version of the partial equilibrium model ESIM of the European agricultural sector is developed and applied which covers the production of and demand for biofuels. Two policy scenarios are simulated for the projection horizon until 2020: a baseline under which the share of biofuels in total transport fuels increases to 6.9% by 2020, and a scenario with a more demanding biofuel directive resulting in a 10% share. Results show that a substantial part of the policy-induced demand for biofuels is covered by imports of biofuels and biofuel inputs. Especially after the implementation of a potential Doha agreement, EU production of bioethanol strongly decreases, while almost all bioethanol demand is covered by imports.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 107th Seminar, January 30-February 1, 2008, Sevilla, Spain with number 6331.

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Date of creation: 2008
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Handle: RePEc:ags:eaa107:6331

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Keywords: Biofuels; EU Biofuels Directive; agricultural markets; partial equilibrium modeling; Land Economics/Use; Resource /Energy Economics and Policy;

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  1. Beghin, John C. & Dong, Fengxia & Elobeid, Amani E. & Fabiosa, Jacinto F. & Fuller, Frank H. & Hart, Chad E. & Kovacik, Karen & Matthey, Holger & Saak, Alexander E. & Tokgoz, Simla & Chavez, Eddie C. , 2004. "FAPRI 2004 U.S. and World Agricultural Outlook," Staff Reports 32046, Food and Agricultural Policy Research Institute (FAPRI).
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Cited by:
  1. Gerber, Nicolas & Van Eckert, Manfred & Breuer, Thomas, 2008. "The Impacts of Biofuel Production on Food Prices: a review," Discussion Papers 48193, University of Bonn, Center for Development Research (ZEF).
  2. Habib-Mintz, Nazia, 2010. "Biofuel investment in Tanzania: Omissions in implementation," Energy Policy, Elsevier, vol. 38(8), pages 3985-3997, August.
  3. Deppermann, Andre & Bruchof, David & Blesl, Markus & Boysen, Ole & Grethe, Harald, 2012. "Energy from biomass: linkages between the energy and the agricultural sector in the EU until 2050," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126754, International Association of Agricultural Economists.

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