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Impacts of US biodiesel mandates on world vegetable oil markets

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  • Cui, Jingbo
  • Martin, Jeremy I.

Abstract

In this paper we seek to understand the impact of expanded use of soybean oil biodiesel to address biofuel mandates on global vegetable oil markets, and in particular on the demand for palm oil. An open-economy equilibrium model is derived to investigate the market effects of biodiesel expansion on related energy and vegetable oil markets. The model is calibrated to represent the recent benchmark data in calendar year 2014. The simulation estimates suggest that the expanded use of soy oil for biodiesel in the US will have considerable impacts on world vegetable oil markets. The majority of the vegetable oil replacement is likely to occur through substitution of palm oil under a wide range of plausible elasticity values on the demand for vegetable oil and the demand substitution between soy oils and palm oils.

Suggested Citation

  • Cui, Jingbo & Martin, Jeremy I., 2017. "Impacts of US biodiesel mandates on world vegetable oil markets," Energy Economics, Elsevier, vol. 65(C), pages 148-160.
    • Handle: RePEc:eee:eneeco:v:65:y:2017:i:c:p:148-160
    DOI: 10.1016/j.eneco.2017.04.010
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    Cited by:

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    2. Hasanov, Akram Shavkatovich & Poon, Wai Ching & Al-Freedi, Ajab & Heng, Zin Yau, 2018. "Forecasting volatility in the biofuel feedstock markets in the presence of structural breaks: A comparison of alternative distribution functions," Energy Economics, Elsevier, vol. 70(C), pages 307-333.

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    More about this item

    Keywords

    Biofuel policies; Diesel taxes; Mandates; Renewable fuel standard;
    All these keywords.

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • F1 - International Economics - - Trade

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