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Biofuel And Policy Alternatives: A Farm Level Analysis

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  • Finco, Adele
  • Padella, Monica
  • Spinozzi, Romina
  • Benedetti, Andrea

Abstract

Within the past years, there has been a significant movement in political consensus towards an energy future with a substantially larger renewable energy component both in Europe and Italy. The biofuel industry has been experiencing a period of extraordinary growth, fueled by a combination of high oil prices, and ambitious blending mandates, tax exemptions and import protection. The major drivers are the reduction of greenhouse gas emissions and fossil fuel use, increased awareness of fossil fuels’ contribution to global climate change, the desire to promote economic revitalization in rural areas and the possibility to create new markets for agricultural products. This paper examines the history of European and Italian biodiesel policy and evaluates the economics of biodiesel production in today’s market environment in Italy. The aim is to shed light on the prospective of the industry and to understand the impacts of policy alternatives. The study is motivated by the increase in biodiesel production capacity realized in Italy in the past years, in contrast whit the actual scenario, emerged from Italian plant managers interviews. We develop an analysis at the firm level to review factors which have contributed to the boom in biodiesel production. The analysis is built upon the work developed by Tyner and Taheripuor for ethanol (2008). It’s based on a break-even comparison for combinations of rapeseed and biodiesel prices which keep a representative biodiesel plant at the zero profit condition. The aim is to examine the profitability of Italian biodiesel industry in 2004-2009.

Suggested Citation

  • Finco, Adele & Padella, Monica & Spinozzi, Romina & Benedetti, Andrea, 2010. "Biofuel And Policy Alternatives: A Farm Level Analysis," 14th ICABR Conference, June 16-18, 2010, Ravello, Italy 188088, International Consortium on Applied Bioeconomy Research (ICABR).
    • Handle: RePEc:ags:itic10:188088
    DOI: 10.22004/ag.econ.188088
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    References listed on IDEAS

    as
    1. Farzad Taheripour & Wallace E. Tyner, 2010. "Biofuels, Policy Options, and Their Implications: Analyses Using Partial and General Equilibrium Approaches," Natural Resource Management and Policy, in: Madhu Khanna & Jürgen Scheffran & David Zilberman (ed.), Handbook of Bioenergy Economics and Policy, chapter 0, pages 365-383, Springer.
    2. Jean-Christophe Bureau & Hervé Guyomard & Florence Jacquet & David Tréguer, 2010. "European Biofuel Policy: How Far Will Public Support Go?," Natural Resource Management and Policy, in: Madhu Khanna & Jürgen Scheffran & David Zilberman (ed.), Handbook of Bioenergy Economics and Policy, chapter 0, pages 401-423, Springer.
    3. Wallace E. Tyner & Farzad Taheripour, 2008. "Policy Options for Integrated Energy and Agricultural Markets ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(3), pages 387-396.
    4. Banse, M. & Sorda, G., 2010. "Impact of Different Biofuel Policy Options on Agricultural Production and Land Use in Germany," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 45, March.
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