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The role of flexible biofuel policies in meeting biofuel mandates

Keywords: biofuel mandates, elasticity of substitution, volatility of prices, waivers

Author(s): Anil Markandya, Kishore Dhavala and Alessandro Palma

Date: 2016-17-05

Issue: 2016-03

  Download this working paper (1 MB.)

This study analyzes the role of biofuels in different markets. It focuses on the link between volatility in the yields of feedstocks and how these feed through to changes in the prices of biofuel crops under different rules for managing biofuel mandates. Under current mandates the impact seems to be significant, with the greatest being on price of sugar crops, followed by grains and oilseeds. Changes in mandates have different results in the EU, depending on crops and change in yields examined. The paper also looks at the implications of waivers in ‘bad’ years.

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