Economic effects of the production of biodiesel for use as fuel |
Nov 2006
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In no other country of the EU has the production and consumption of fatty acid methyl ester grown as strongly as in Germany. Policy decisions are the major factors behind the success of biodiesel, mainly produced from rape seed, with energy- and environmental-policy aspects gaining in importance alongside agricultural-policy considerations.
In 2003 the EU issued a Directive with the goal of achieving a 5.75 percent share for biofuels in overall fuel consumption by 2010. In Germany, the tax benefits for biogenous fuels have played an important role.
The Ifo Institute, using an input/output analysis, examined the macroeconomic effects to be expected from the increasing use of biodiesel, also under the conditions of a gradual reduction of tax benefits. Scenarios for 2007 and 2009 were developed as to how the value added chain of biodiesel from rape-seed production up to the diesel pump has direct and indirect effects on production, employment and the public budgets.
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