Modelling the impacts of macroeconomic variables on the South African biofuels industry

Mar 2007

The production of biofuel from agricultural commodities is the hot topic in most of the major economies around the world. The Kyoto protocol has further sparked an interest in the preservation of the environment and has motivated various economies to actively work towards producing cleaner fuels from renewable resources.
High carry-over stocks and resultant low commodity prices have sparked a local drive towards the implementation of mandates on biofuel blends in the local fuel mix, the recent turn around in both oil and commodity prices has left many individuals doubtful as to the economic viability of biofuel production without the financial support of state authorities.
This report discusses the economic feasibility of biofuel production in South Africa, without any form of government support, at 2006 prices. It then takes the analysis a step further and with the help of a set of scenarios, different outcomes, due to various policy implementations are discussed and the result documented.

By: Bureau for Food and Agricultural Policy (BFAP)

 
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