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Implications of Biofuel Support Policies in Europe - A Quantitative Analysis in an Open Economy

16 th ICABR / 126 th EAAE – Ravello 24-27 June 2012. Implications of Biofuel Support Policies in Europe - A Quantitative Analysis in an Open Economy. María Blanco, Shailesh Shrestha, Marcel Adenaeuer and Arno Becker Contact: maria.blanco@upm.es. Outline. EU biofuels support

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Implications of Biofuel Support Policies in Europe - A Quantitative Analysis in an Open Economy

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  1. 16th ICABR / 126th EAAE – Ravello 24-27 June 2012 Implications of Biofuel Support Policies in Europe - A Quantitative Analysis in an Open Economy María Blanco, Shailesh Shrestha, Marcel Adenaeuer and Arno Becker Contact: maria.blanco@upm.es

  2. Outline • EU biofuels support • Biofuels modelling with CAPRI • Scenario setting • Main results • Concluding remarks

  3. EU biofuels support

  4. Biofuels production and use have significantly grown during the last decade in the EU • Growth in biofuels production and use mainly driven by public support • EU Renewable Energy Directive • Target of 10% renewable energy in total transport energy consumption by 2020 • Implementation mechanisms at the MS level: quota obligations and tax exemptions for biofuels

  5. EU Biodiesel Production (1000 t) Source: CAPRI database (several raw sources)

  6. EU Ethanol Production (1000 t) Source: CAPRI database (several raw sources)

  7. The development of the biofuel sector raises a number of concerns • Contribution to reduce dependence from fossil fuels? • Contribution to reduce GHG emissions? • Contribution to maintain agricultural income? • Food-fuel linkages, in particular competition for land and impacts on food prices

  8. Research questions • What are the impacts of the current EU biofuels strategy on global biofuel and agricultural markets? • How these impacts will change if the EU eliminate tariffs for biofuels imports? • How these impacts will change in case of a faster development path of second generation technologies?

  9. Biofuels modelling with CAPRI

  10. What is CAPRI? • Spatial partial equilibrium model of agricultural commodity markets at the global level • Two interlinked modules: 77 countries in 40 trade blocks, 60 primary and secondary products, agricultural and trade policy measures Global Spatial Multi-Commodity Model 280 regions for EU27+Norway+Western Balkans, detailed representation of farming decisions and CAP measures Regional ProgrammingModels

  11. Biofuels module • Global representation of biofuels markets (ethanol and biodiesel) • Endogenous supply, demand and trade flows for biofuels • For domestic production, two technological pathways (first generation and second generation biofuels)

  12. Ethanol markets

  13. Biodiesel markets

  14. Scenario setting

  15. Scenario setting

  16. Scenario results

  17. Baseline results compared to last year data (EU27) Ethanol Biodiesel

  18. Baseline results (MS level)

  19. Biofuels market balances in the EU

  20. Biofuels market balances in the EU

  21. First generation biofuels by feedstock (EU27)

  22. Effects on EU crop production

  23. Effects on EU crop producer price

  24. Effects on EU cropland allocation

  25. Regional effects on agricultural income (%change) No EU biofuel support No EU biofuel tariffs High 2nd generation

  26. Demand balance (maize)

  27. Biofuels trade

  28. Global biofuels production

  29. Concluding remarks • Biofuels production and use will remain mainly driven by public support • Strong links of biofuels to agricultural markets • Development of second generation technologies would ease food-fuel links

  30. Thanks for your attention!

  31. EU biofuels support

  32. Conversion rates

  33. Fuel consumption

  34. Trade blocks in CAPRI • Asian Tigers (Hong Kong, Singapore, South Korea) • Asian South East (Vietnam, Thailand, Brunei)

  35. Global biofuel production and recent trends

  36. Previsiones de futuro

  37. Increase in cereals production driven by biofuels feedstock demand Fuente: Comisión Europea (2011)

  38. Crop prices will stay high Fuente: Comisión Europea (2011)

  39. Production and consumption of biofuels will double in the EU in the next 10 years Fuente: Comisión Europea (2011)

  40. Important role of biofuels imports Fuente: Comisión Europea (2011)

  41. Ethanol: increasing feedstock demand Fuente: Comisión Europea (2011)

  42. Biodiesel: dependence on imports Fuente: Comisión Europea (2011)

  43. US: uso creciente de DDGS en alimentación animal Fuente: Taheripour et al. 2010

  44. UE: uso creciente de tortas de oleaginosas en alimentación animal Fuente: Taheripour et al. 2010

  45. UE: disminución del precio relativo de la torta de colza respecto a otras materias primas Fuente: Taheripour et al. 2010

  46. Tariffs

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