Final SUSTOIL Conference Düsseldorf, 7-9 June 2010 The Sustoil model for Europe:

1. WP6 Modelling Stackeholders Interplay and Policy Scenarios for Biorefineries and Biodiesel Production Final SUSTOIL Conference Düsseldorf, 7-9 June 2010 The Sustoil model for Europe: macroeconomic and policy views Dr Caterina De Lucia University of York

2. Contents of the talk Part I • Aims and objectives of the WP6 • Schematic view of the CGE (UoY) • Interactions between WP5 and WP6-CGE modelling Part II • Production struction without and with biorefineries • Database and software info • Policies • Main results • Conclusions - highlights

3. Part I: Aims and objectives of the WP6 Policy simulation analysis for bio-refineries • Social network interactions across stakeholders • Macroeconomic and policy analysis Agent Based Model (ABM) Computable General Equilibrium (CGE) Model

4. Part I: Schematic view of the CGE (UoY) Macroeconomic CGE model for bio-refineries (deals with the inter-relationships between different markets and sectors of the economy) • Applied model • Calibration analysis (for the EU-27) • Benchmark case: current state of technology and consumption (fossil fuel use, biofuels as energy factors to production, current land use, current emission levels) • Policy options (Bio-based economy, EU targets of biofuels share in total energy) • Model’s validation (sensitivity analysis) • Theoretical model • Definition of behavioural relationships for: • production • consumption • trade • government • emissions

5. Interactions between WP5 and WP6-CGE modelling WP6-CGE modelling a biorefinery economy WP5 Other firms Input factors Optimal Biogas for bio-electricity Bio- Refineries Gov’t Optimal Biodiesel Pollution CO2 Households Optimal Bio-schemes HOME Trade ABROAD

6. The production structure with no biorefineries

7. The production structure with biorefineries

8. Database used • Global Trade Analysis Project (GTAP) v6.1. • https://www.gtap.agecon.purdue.edu/ • Macroeconomic information given in Social Accounting • Matrix (SAM) form. This provides a conceptual and • behavioural framework to link the components of an economy • to each other. • A SAM is a square matrix where each account is a row and a • colum entry (see next slide).

9. Environmental extended SAM

10. Database The current database is the Global Trade Analysis Project v6.0 at the URL: www.gtap.agecon.purdue.edu/ Added information from WP5 on Biodiesel and Electricity from Biogas using oil seeds

11. Main added information • Input and output data (including prices) on biodiesel and electricity from biogas refinery – WP5 • Country prices on labour data for biorefineries • Country prices on feed-in tariffs for electricity • Country tax exemptions on biodiesel (in 2007) • Sectoral CO2 equivalent emission factors (taken from DEFRA and WP5) • Elastities values for production with biorefineries (taken from various recent sources)

12. Policies considered in the model • Policy objective: 20 % reduction in CO2 using 20% renewables by 2020 • Policy experiments: • Change from a EU no-biobased economy to one with: • A EU biorefinery economy • Biofuels targets share in total energy by 5.75% by 2010 • Biodiesel tax exemptions

13. Main policy results

14. Main policy results

15. Main policy results

16. Main policy results

17. Concluding remarks - highlights • Biorefineries working from Oil Seeds and their by-products will lead to a large increase in the amount of this crop grown – particularly in Eastern Europe • This will be accompanied by decreases in sectoral GDP in several other areas • There will be a decrease in CO2 emissions, but insufficient to meet the EU’s target of 20 %. Other environmental measures could be used to fill this gap • Oil and electricity prices will generally fall in across the EU, with a particularly notable trend in Eastern Europe