IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/13075.html
   My bibliography  Save this paper

Modelling production cost scenarios for biofuels and fossil fuels in Europe

Author

Listed:
  • Festel, Gunter
  • Würmseher, Martin
  • Rammer, Christian
  • Boles, Eckhard
  • Bellof, Martin

Abstract

This paper presents the results of a calculation model for biofuel production costs in 2015 and 2020 based on raw material price projections and considering scale and learning effects. Distinguishing six types of biofuels, the paper finds that scale economies and learning effects are critical for 2nd generation biofuels to become competitive. In case these effects can be utilized, cost saving potentials for 2nd generation biofuels are significant.

Suggested Citation

  • Festel, Gunter & Würmseher, Martin & Rammer, Christian & Boles, Eckhard & Bellof, Martin, 2013. "Modelling production cost scenarios for biofuels and fossil fuels in Europe," ZEW Discussion Papers 13-075, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:13075
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/85262/1/770472672.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ajanovic, Amela, 2011. "Biofuels versus food production: Does biofuels production increase food prices?," Energy, Elsevier, vol. 36(4), pages 2070-2076.
    2. Ian W.H. Parry & Roberton C. Williams III & Lawrence H. Goulder, 2002. "When Can Carbon Abatement Policies Increase Welfare? The Fundamental Role of Distorted Factor Markets," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 25, pages 471-503, Edward Elgar Publishing.
    3. Martinsen, Dag & Funk, Carolin & Linssen, Jochen, 2010. "Biomass for transportation fuels--A cost-effective option for the German energy supply?," Energy Policy, Elsevier, vol. 38(1), pages 128-140, January.
    4. Uyterlinde, Martine A. & Junginger, Martin & de Vries, Hage J. & Faaij, Andre P.C. & Turkenburg, Wim C., 2007. "Implications of technological learning on the prospects for renewable energy technologies in Europe," Energy Policy, Elsevier, vol. 35(8), pages 4072-4087, August.
    5. Hettinga, W.G. & Junginger, H.M. & Dekker, S.C. & Hoogwijk, M. & McAloon, A.J. & Hicks, K.B., 2009. "Understanding the reductions in US corn ethanol production costs: An experience curve approach," Energy Policy, Elsevier, vol. 37(1), pages 190-203, January.
    6. Peter B. Dixon & Stefan Osborne & Maureen T. Rimmer, 2007. "The Economy-Wide Effects in the United States of Replacing Crude Petroleum with Biomass," Energy & Environment, , vol. 18(6), pages 709-722, November.
    7. 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.
    8. Junginger, Martin & de Visser, Erika & Hjort-Gregersen, Kurt & Koornneef, Joris & Raven, Rob & Faaij, Andre & Turkenburg, Wim, 2006. "Technological learning in bioenergy systems," Energy Policy, Elsevier, vol. 34(18), pages 4024-4041, December.
    9. Derek Headey & Shenggen Fan, 2008. "Anatomy of a crisis: the causes and consequences of surging food prices," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 375-391, November.
    10. Samuel Hollander, 1965. "The Sources of Increased Efficiency: A Study of DuPont Rayon Plants," MIT Press Books, The MIT Press, edition 1, volume 1, number 026258235x, April.
    11. Dautzenberg, Kirsti & Hanf, Jon, 2008. "Biofuel chain development in Germany: Organisation, opportunities, and challenges," Energy Policy, Elsevier, vol. 36(1), pages 485-489, January.
    12. Lamers, Patrick & Hamelinck, Carlo & Junginger, Martin & Faaij, André, 2011. "International bioenergy trade--A review of past developments in the liquid biofuel market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 2655-2676, August.
    13. John Haldi & David Whitcomb, 1967. "Economies of Scale in Industrial Plants," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 373-373.
    14. Chen, Sheng-Tung & Kuo, Hsiao-I & Chen, Chi-Chung, 2010. "Modeling the relationship between the oil price and global food prices," Applied Energy, Elsevier, vol. 87(8), pages 2517-2525, August.
    15. Mitchell, Donald, 2008. "A note on rising food prices," Policy Research Working Paper Series 4682, The World Bank.
    16. Naik, S.N. & Goud, Vaibhav V. & Rout, Prasant K. & Dalai, Ajay K., 2010. "Production of first and second generation biofuels: A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(2), pages 578-597, February.
    17. Banse, Martin & van Meijl, Hans & Tabeau, Andrzej A. & Woltjer, Geert B., 2008. "Impact of EU Biofuel Policies on World Agricultural and Food Markets," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6476, European Association of Agricultural Economists.
    18. Bomb, Christian & McCormick, Kes & Deurwaarder, Ewout & Kaberger, Tomas, 2007. "Biofuels for transport in Europe: Lessons from Germany and the UK," Energy Policy, Elsevier, vol. 35(4), pages 2256-2267, April.
    19. Gustavsson, L., 1997. "Energy efficiency and competitiveness of biomass-based energy systems," Energy, Elsevier, vol. 22(10), pages 959-967.
    20. Marvin B. Lieberman, 1984. "The Learning Curve and Pricing in the Chemical Processing Industries," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 213-228, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Markus Millinger & Kathleen Meisel & Maik Budzinski & Daniela Thrän, 2018. "Relative Greenhouse Gas Abatement Cost Competitiveness of Biofuels in Germany," Energies, MDPI, vol. 11(3), pages 1-23, March.
    2. Xu, Jie & Yuan, Zhenhong & Chang, Shiyan, 2018. "Long-term cost trajectories for biofuels in China projected to 2050," Energy, Elsevier, vol. 160(C), pages 452-465.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jha, Priyanka & Schmidt, Stefan, 2021. "State of biofuel development in sub-Saharan Africa: How far sustainable?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).
    2. Giray GOZGOR & Baris KABLAMACI, 2014. "The linkage between oil and agricultural commodity prices in the light of the perceived global risk," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 60(7), pages 332-342.
    3. Murnaghan, Kitty, 2017. "A comprehensive evaluation of the EU's biofuel policy: From biofuels to agrofuels," IPE Working Papers 81/2017, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    4. Bilgili, Faik & Koçak, Emrah & Kuşkaya, Sevda & Bulut, Ümit, 2020. "Estimation of the co-movements between biofuel production and food prices: A wavelet-based analysis," Energy, Elsevier, vol. 213(C).
    5. Maitra, Debasish & Guhathakurta, Kousik & Kang, Sang Hoon, 2021. "The good, the bad and the ugly relation between oil and commodities: An analysis of asymmetric volatility connectedness and portfolio implications," Energy Economics, Elsevier, vol. 94(C).
    6. Forsell, Nicklas & Guerassimoff, Gilles & Athanassiadis, Dimitris & Thivolle-Casat, Alain & Lorne, Daphné & Millet, Guy & Assoumou, Edi, 2013. "Sub-national TIMES model for analyzing future regional use of biomass and biofuels in Sweden and France," Renewable Energy, Elsevier, vol. 60(C), pages 415-426.
    7. Shokoohi, Zeinab & Saghaian, Sayed, 2022. "Nexus of energy and food nutrition prices in oil importing and exporting countries: A panel VAR model," Energy, Elsevier, vol. 255(C).
    8. Peri, Massimo & Baldi, Lucia, 2013. "The effect of biofuel policies on feedstock market: Empirical evidence for rapeseed oil prices in EU," Resource and Energy Economics, Elsevier, vol. 35(1), pages 18-37.
    9. David Matesanz & Benno Torgler & Germán Dabat & Guillermo J. Ortega, 2014. "Co-movements in commodity prices: a note based on network analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 13-21, November.
    10. Zhang, Zibin & Lohr, Luanne & Escalante, Cesar & Wetzstein, Michael, 2010. "Food versus fuel: What do prices tell us?," Energy Policy, Elsevier, vol. 38(1), pages 445-451, January.
    11. Dervis Kirikkaleli & Ibrahim Darbaz, 2021. "The Causal Linkage between Energy Price and Food Price," Energies, MDPI, vol. 14(14), pages 1-13, July.
    12. Bardhan, Soubhik K. & Gupta, Shelaka & Gorman, M.E. & Haider, M. Ali, 2015. "Biorenewable chemicals: Feedstocks, technologies and the conflict with food production," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 506-520.
    13. Serra, Teresa & Zilberman, David, 2013. "Biofuel-related price transmission literature: A review," Energy Economics, Elsevier, vol. 37(C), pages 141-151.
    14. Mustafa Gülerce & Gazanfer Ünal, 2017. "Forecasting Of Oil And Agricultural Commodity Prices: Varma Versus Arma," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 12(03), pages 1-30, September.
    15. James Daniell & Michael Köpke & Séan Dennis Simpson, 2012. "Commercial Biomass Syngas Fermentation," Energies, MDPI, vol. 5(12), pages 1-46, December.
    16. Anelise Rahmeier Seyffarth, 2016. "The Impact of Rising Ethanol Production on the Brazilian Market for Basic Food Commodities: An Econometric Assessment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(3), pages 511-536, July.
    17. Karakotsios, Achillefs & Katrakilidis, Constantinos & Kroupis, Nikolaos, 2021. "The dynamic linkages between food prices and oil prices. Does asymmetry matter?," The Journal of Economic Asymmetries, Elsevier, vol. 23(C).
    18. Bernardina Algieri, 2014. "A roller coaster ride: an empirical investigation of the main drivers of the international wheat price," Agricultural Economics, International Association of Agricultural Economists, vol. 45(4), pages 459-475, July.
    19. Cheng, Sheng & Cao, Yan, 2019. "On the relation between global food and crude oil prices: An empirical investigation in a nonlinear framework," Energy Economics, Elsevier, vol. 81(C), pages 422-432.
    20. Rosa, Franco & Vasciaveo, Michela & Weaver, Robert D., 2014. "Agricultural and oil commodities: price transmission and market integration between US and Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(2), pages 1-25, August.

    More about this item

    Keywords

    Biofuels; Production Cost Scenarios; Raw Material Price Projection; Conversion Costs;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:13075. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.