Changes to EU Biofuel Policy- Turmoil on Feedstock Markets

Due to concerns regarding possible negative impacts of conventional biofuels on food security, biodiversity, land use change and greenhouse gas emission savings, the EU wants to restrict the use of food crop based biofuels. Current legislation stipulates a minimum share of ten percent renewables in fuel consumption in the transport sector. Recent policy proposals limit the share of food crop based biofuels counting towards the achievement of this share to six and seven percentage points. This policy change will have an effect on biofuel as well as on feedstock markets. To analyze the magnitude of such a policy change on relevant domestic and international markets, we extend and apply a computable general equilibrium model. Main findings are that limiting the use of food crop based biofuels in the EU only slightly affects domestic rapeseed production but significantly reduces vegetable oil imports