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17 th ICABR Conference, 19 June 2013

The impact of the rebound effect of first generation biofuel use in the EU on greenhouse gas emissions. 17 th ICABR Conference, 19 June 2013 Edward Smeets , Jamil Moorad, Andrzej Tabeau, Siemen van Berkum, Geert Woltjer, Hans van Meijl. Biofuel use in the EU 27.

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17 th ICABR Conference, 19 June 2013

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  1. The impact of the rebound effect of first generation biofuel use in the EU on greenhouse gas emissions 17th ICABR Conference, 19 June 2013 Edward Smeets, Jamil Moorad, Andrzej Tabeau, Siemen van Berkum, Geert Woltjer, Hans van Meijl

  2. Biofuel use in the EU 27 • Increasing biofuel use in the EU to 5% in 2010 • Driven by blend mandate 10% Source: Eurobserv’er, 2012

  3. Feedstock composition of biofuel use in the EU 27 & indirect effects • Current biofuels made from food crops • Concerns about indirect effects: • Food prices • Indirect Land Use Change (ILUC) • Reduction of blend mandate to 5% • Increased stimulation of biofuels from residues and waste Source: Eurobserv’er, 2012

  4. The rebound effect of biofuel use • Change in biofuel use ≠ change in fossil fuel use • Crucial for both environmental impacts AND economic impacts of biofuel use; potential trade-off! • Also known as market leakage, indirect fuel use change, indirect output use change • Well studied issue in relation to energy efficiency, but only recently the rebound effects of biofuel use have received attention Objectives: • To evaluate the dynamics of the rebound effect of biofuel use based on a literature review and CGE modelling • To evaluate the impact of the rebound effect of GHG emissions

  5. Conceptual representation of the rebound effect of biofuel use Source: Drabik and De Gorter, 2011

  6. Simplified conceptual representation of the rebound effect of biofuel use • Distinction between rebound effect in biofuel consuming region (HOME) and ROW • A 20% rebound effect means that 1 J increase of biofuel changes fossil fuel use by 0.8 J • A -20% rebound effect means that 1 J increase of biofuel changes fossil fuel use by 1.2 J

  7. Literature review & MAGNET CGE analysis • Nine studies: 5 US, 2 world and 2 EU • Range of -21% to +119% global rebound effect world US EU ROW HOME • WORLD

  8. Literature review • Negative rebound effects in the biofuel consuming region: biofuel consumption increase < fossil fuel consumption decrease • Positive rebound effect in the ROW: oil consumption increase • Net positiverebound effect globally • Key factors: • Biofuel policy: mandate leads to lower rebound effects than biofuel subsidies • Oil supply and the role of the Organization of the Petroleum Exporting Countries (OPEC): • Price maker • Target revenue • Green paradox

  9. Evaluation of key factors

  10. Impact of rebound effect on GHG emissions of biofuel use (globally) -1% RE Lower range literature review +88% RE Upper range literature review +22% RE MAGNET CGE model +30% RE MIRAGE CGE model

  11. Conclusions • Large range in estimates due to differences in approach, method, scenario assumptions, time fame, geographic scope and other parameters used in economic modelling. • Oil supply and role of OPEC is a key uncertain factor • Tax credits and other financial incentives for biofuel production and use results in higher rebound effects • Most studies indicate that rebound effect in the EU is negative and thus contributes to meeting EU GHG and energy security targets • ROW rebound effects are positive → negative impact on GHG emissions • Rebound effects are crucial for the efficiency and effectiveness of biofuel policies and for economic effects

  12. Thank you for your attention! International Policy Division LEI – part of Wageningen UR Edward Smeets edward.smeets@wur.nl 070 335 82 43

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