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Economics and agricultural market impacts of growing biofuel production

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  • von Lampe, Martin

Abstract

This paper analyses the economics of biofuel production and the implications that the accelerating growth in biofuel production in many countries could have on agricultural markets. It shows that production costs of ethanol and biodiesel differ significantly across countries and feedstock crops. These costs often exceed those of fossil fuels. In consequence, the economics of biofuel production depends on public support in most countries. Similarly, land requirements for crops required to enable significant shares of biofuel production in transport fuel consumption are shown to be substantial in many countries given current technologies. An expected growth in biofuel production is, therefore, likely to have a significant increasing impact on world prices for sugar, cereals and oilseeds beyond what is caused by higher crude oil prices alone. The paper points out a number of policy issues that require attention and further analysis to facilitate a fuller discussion of biofuel policies.

Suggested Citation

  • von Lampe, Martin, 2007. "Economics and agricultural market impacts of growing biofuel production," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 56(05-06), pages 1-6.
    • Handle: RePEc:ags:gjagec:96747
    DOI: 10.22004/ag.econ.96747
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    File URL: https://ageconsearch.umn.edu/record/96747/files/2_vonLampe.pdf
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    References listed on IDEAS

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    1. Oecd, 2006. "Agricultural Market Impacts of Future Growth in the Production of Biofuels," OECD Papers, OECD Publishing, vol. 6(1), pages 1-57.
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    Cited by:

    1. Kreins, Peter & Gomann, Horst, 2008. "Modellgestützte Abschätzung der regionalen landwirtschaftlichen Landnutzung und Produktion in Deutschland vor dem Hintergrund der „Gesundheitsüberprüfung“ der GAP," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 57(03-04), pages 1-12.
    2. María Blanco & Marcel Adenäuer & Shailesh Shrestha & Arno Becker, 2012. "Methodology to assess EU Biofuel Policies: The CAPRI Approach," JRC Research Reports JRC80037, Joint Research Centre.
    3. Chen, Qiu & Mirzabaev, Alisher, 2016. "Evaluating the Impacts of Traditional Biomass Energy Use on Agricultural Production in Sichuan, China," Discussion Papers 250213, University of Bonn, Center for Development Research (ZEF).
    4. Becker, Arno & Adenauer, Marcel & Blanco Fonseca, Maria, 2010. "Impacts Of European Biofuel Policies On Agricultural Markets And Environment Under Consideration Of 2nd Generation Technologies And International Trade," 2010: Climate Change in World Agriculture: Mitigation, Adaptation, Trade and Food Security, June 2010, Stuttgart-Hohenheim, Germany 91395, International Agricultural Trade Research Consortium.
    5. Delzeit, Ruth & Britz, Wolfgang & Holm-Müller, Karin, 2011. "Modelling regional input markets with numerous processing plants: The case of green maize for biogas production in Germany," Discussion Papers 162892, University of Bonn, Institute for Food and Resource Economics.

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