The Effect of Biodiesel Policies on World Oilseed Markets and Developing Countries

Using an empirical model, this study provides some insights into the functioning of the oilseed-biodiesel-diesel market complex in a large country that determines the biodiesel price, reflecting market equilibrium changes resulting from volatility...

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Main Authors:	de Gorter, Harry, Drabik, Dusan, Timilsina, Govinda R.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	BAGASSE BARREL BIODIESEL BIOFUEL BIOFUEL PRODUCTION BIOFUELS CANOLA CO COMMODITIES COMMODITY COMMODITY PRICES CONSUMER FUEL CONVENTIONAL DIESEL CORN CORN PRICES CORN-ETHANOL CRUDE OIL CRUDE OIL MARKET CRUDE OIL PRICE CRUDE OIL PRICE VOLATILITY CRUDE OIL PRICES DEMAND CURVE DEMAND CURVES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DIESEL DIESEL FUEL DIESEL FUEL CONSUMPTION DUMPING ECONOMIC PERSPECTIVES ELECTRICITY EMPIRICAL MODEL ENERGY POLICIES ENVIRONMENTAL PROTECTION ENVIRONMENTAL PROTECTION AGENCY ETHANOL ETHANOL CASE ETHANOL MARKET ETHANOL PRICES ETHANOL PRODUCTION FEEDSTOCK FEEDSTOCK PRICES FEEDSTOCK SUPPLY FEEDSTOCKS FINANCIAL SUPPORT FOOD PRICES FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL PRICE FUEL PRICES FUEL TAX FUEL TAXES FUEL USE FUELS GASOLINE GENERATION GRAIN PRICES INCOME INDIVIDUAL MARKET JATROPHA MARGINAL COST MARGINAL COSTS MARKET EQUILIBRIUM MARKET PARTICIPANTS MARKET PRICE MARKET PRICES OIL CONSUMPTION OIL MARKETS OIL PRICES OILS PRICE DECREASES PRICE INCREASES PRICE SETTING PRICE VOLATILITY PRIMARY FEEDSTOCK RAPESEED RENEWABLE FUEL SMALL COUNTRY SOYBEAN MEAL SOYBEAN OIL SOYBEAN PRODUCTION SOYBEANS SUBSTITUTES SUBSTITUTION SUGAR SUGARCANE SUGARCANE-ETHANOL SUPPLY CURVE SUPPLY ELASTICITY TAX CREDIT TAX EXEMPTION VEGETABLE OIL VOLATILITY WORLD MARKETS
Online Access:	http://documents.worldbank.org/curated/en/2013/05/17734486/effect-biodiesel-policies-world-oilseed-markets-developing-countries http://hdl.handle.net/10986/15592

id	okr-10986-15592
recordtype	oai_dc
spelling	okr-10986-155922021-04-23T14:03:19Z The Effect of Biodiesel Policies on World Oilseed Markets and Developing Countries de Gorter, Harry Drabik, Dusan Timilsina, Govinda R. BAGASSE BARREL BIODIESEL BIOFUEL BIOFUEL PRODUCTION BIOFUELS CANOLA CO COMMODITIES COMMODITY COMMODITY PRICES CONSUMER FUEL CONVENTIONAL DIESEL CORN CORN PRICES CORN-ETHANOL CRUDE OIL CRUDE OIL MARKET CRUDE OIL PRICE CRUDE OIL PRICE VOLATILITY CRUDE OIL PRICES DEMAND CURVE DEMAND CURVES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DIESEL DIESEL FUEL DIESEL FUEL CONSUMPTION DUMPING ECONOMIC PERSPECTIVES ELECTRICITY EMPIRICAL MODEL ENERGY POLICIES ENVIRONMENTAL PROTECTION ENVIRONMENTAL PROTECTION AGENCY ETHANOL ETHANOL CASE ETHANOL MARKET ETHANOL PRICES ETHANOL PRODUCTION FEEDSTOCK FEEDSTOCK PRICES FEEDSTOCK SUPPLY FEEDSTOCKS FINANCIAL SUPPORT FOOD PRICES FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL PRICE FUEL PRICES FUEL TAX FUEL TAXES FUEL USE FUELS GASOLINE GENERATION GRAIN PRICES INCOME INDIVIDUAL MARKET JATROPHA MARGINAL COST MARGINAL COSTS MARKET EQUILIBRIUM MARKET PARTICIPANTS MARKET PRICE MARKET PRICES OIL CONSUMPTION OIL MARKETS OIL PRICES OILS PRICE DECREASES PRICE INCREASES PRICE SETTING PRICE VOLATILITY PRIMARY FEEDSTOCK RAPESEED RENEWABLE FUEL SMALL COUNTRY SOYBEAN MEAL SOYBEAN OIL SOYBEAN PRODUCTION SOYBEANS SUBSTITUTES SUBSTITUTION SUGAR SUGARCANE SUGARCANE-ETHANOL SUPPLY CURVE SUPPLY ELASTICITY TAX CREDIT TAX EXEMPTION VEGETABLE OIL VOLATILITY WORLD MARKETS Using an empirical model, this study provides some insights into the functioning of the oilseed-biodiesel-diesel market complex in a large country that determines the biodiesel price, reflecting market equilibrium changes resulting from volatility in the crude oil price. Oilseed crushing produces joint products -- oil and meal -- and this weakens the link between the biodiesel and oilseed feedstock prices. Higher crude oil prices increase biodiesel prices if biofuel benefits from a fuel tax exemption, but lower them with a blending mandate (minimum biofuel content requirement in marketed fuel). When both canola and soybeans are used to produce biodiesel, an increase in the crude oil price leads to higher canola prices, but the effect on soybean prices is ambiguous and depends on relative elasticities of meal demand and canola supply because canola produces more oil than soybeans. An oil price shock with a blending mandate results in a smaller change in oilseed prices compared with a fuel tax exemption. Jumps in world crude oil prices have differential impacts on commodity prices and welfare in developing countries, depending on which policy determines the biodiesel price in OECD countries. 2013-09-04T18:11:55Z 2013-09-04T18:11:55Z 2013-05 http://documents.worldbank.org/curated/en/2013/05/17734486/effect-biodiesel-policies-world-oilseed-markets-developing-countries http://hdl.handle.net/10986/15592 English en_US Policy Research Working Paper;No. 6453 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	BAGASSE BARREL BIODIESEL BIOFUEL BIOFUEL PRODUCTION BIOFUELS CANOLA CO COMMODITIES COMMODITY COMMODITY PRICES CONSUMER FUEL CONVENTIONAL DIESEL CORN CORN PRICES CORN-ETHANOL CRUDE OIL CRUDE OIL MARKET CRUDE OIL PRICE CRUDE OIL PRICE VOLATILITY CRUDE OIL PRICES DEMAND CURVE DEMAND CURVES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DIESEL DIESEL FUEL DIESEL FUEL CONSUMPTION DUMPING ECONOMIC PERSPECTIVES ELECTRICITY EMPIRICAL MODEL ENERGY POLICIES ENVIRONMENTAL PROTECTION ENVIRONMENTAL PROTECTION AGENCY ETHANOL ETHANOL CASE ETHANOL MARKET ETHANOL PRICES ETHANOL PRODUCTION FEEDSTOCK FEEDSTOCK PRICES FEEDSTOCK SUPPLY FEEDSTOCKS FINANCIAL SUPPORT FOOD PRICES FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL PRICE FUEL PRICES FUEL TAX FUEL TAXES FUEL USE FUELS GASOLINE GENERATION GRAIN PRICES INCOME INDIVIDUAL MARKET JATROPHA MARGINAL COST MARGINAL COSTS MARKET EQUILIBRIUM MARKET PARTICIPANTS MARKET PRICE MARKET PRICES OIL CONSUMPTION OIL MARKETS OIL PRICES OILS PRICE DECREASES PRICE INCREASES PRICE SETTING PRICE VOLATILITY PRIMARY FEEDSTOCK RAPESEED RENEWABLE FUEL SMALL COUNTRY SOYBEAN MEAL SOYBEAN OIL SOYBEAN PRODUCTION SOYBEANS SUBSTITUTES SUBSTITUTION SUGAR SUGARCANE SUGARCANE-ETHANOL SUPPLY CURVE SUPPLY ELASTICITY TAX CREDIT TAX EXEMPTION VEGETABLE OIL VOLATILITY WORLD MARKETS
spellingShingle	BAGASSE BARREL BIODIESEL BIOFUEL BIOFUEL PRODUCTION BIOFUELS CANOLA CO COMMODITIES COMMODITY COMMODITY PRICES CONSUMER FUEL CONVENTIONAL DIESEL CORN CORN PRICES CORN-ETHANOL CRUDE OIL CRUDE OIL MARKET CRUDE OIL PRICE CRUDE OIL PRICE VOLATILITY CRUDE OIL PRICES DEMAND CURVE DEMAND CURVES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DIESEL DIESEL FUEL DIESEL FUEL CONSUMPTION DUMPING ECONOMIC PERSPECTIVES ELECTRICITY EMPIRICAL MODEL ENERGY POLICIES ENVIRONMENTAL PROTECTION ENVIRONMENTAL PROTECTION AGENCY ETHANOL ETHANOL CASE ETHANOL MARKET ETHANOL PRICES ETHANOL PRODUCTION FEEDSTOCK FEEDSTOCK PRICES FEEDSTOCK SUPPLY FEEDSTOCKS FINANCIAL SUPPORT FOOD PRICES FUEL FUEL CONSUMPTION FUEL DEMAND FUEL MARKET FUEL PRICE FUEL PRICES FUEL TAX FUEL TAXES FUEL USE FUELS GASOLINE GENERATION GRAIN PRICES INCOME INDIVIDUAL MARKET JATROPHA MARGINAL COST MARGINAL COSTS MARKET EQUILIBRIUM MARKET PARTICIPANTS MARKET PRICE MARKET PRICES OIL CONSUMPTION OIL MARKETS OIL PRICES OILS PRICE DECREASES PRICE INCREASES PRICE SETTING PRICE VOLATILITY PRIMARY FEEDSTOCK RAPESEED RENEWABLE FUEL SMALL COUNTRY SOYBEAN MEAL SOYBEAN OIL SOYBEAN PRODUCTION SOYBEANS SUBSTITUTES SUBSTITUTION SUGAR SUGARCANE SUGARCANE-ETHANOL SUPPLY CURVE SUPPLY ELASTICITY TAX CREDIT TAX EXEMPTION VEGETABLE OIL VOLATILITY WORLD MARKETS de Gorter, Harry Drabik, Dusan Timilsina, Govinda R. The Effect of Biodiesel Policies on World Oilseed Markets and Developing Countries
relation	Policy Research Working Paper;No. 6453
description	Using an empirical model, this study provides some insights into the functioning of the oilseed-biodiesel-diesel market complex in a large country that determines the biodiesel price, reflecting market equilibrium changes resulting from volatility in the crude oil price. Oilseed crushing produces joint products -- oil and meal -- and this weakens the link between the biodiesel and oilseed feedstock prices. Higher crude oil prices increase biodiesel prices if biofuel benefits from a fuel tax exemption, but lower them with a blending mandate (minimum biofuel content requirement in marketed fuel). When both canola and soybeans are used to produce biodiesel, an increase in the crude oil price leads to higher canola prices, but the effect on soybean prices is ambiguous and depends on relative elasticities of meal demand and canola supply because canola produces more oil than soybeans. An oil price shock with a blending mandate results in a smaller change in oilseed prices compared with a fuel tax exemption. Jumps in world crude oil prices have differential impacts on commodity prices and welfare in developing countries, depending on which policy determines the biodiesel price in OECD countries.
format	Publications & Research :: Policy Research Working Paper
author	de Gorter, Harry Drabik, Dusan Timilsina, Govinda R.
author_facet	de Gorter, Harry Drabik, Dusan Timilsina, Govinda R.
author_sort	de Gorter, Harry
title	The Effect of Biodiesel Policies on World Oilseed Markets and Developing Countries
title_short	The Effect of Biodiesel Policies on World Oilseed Markets and Developing Countries
title_full	The Effect of Biodiesel Policies on World Oilseed Markets and Developing Countries
title_fullStr	The Effect of Biodiesel Policies on World Oilseed Markets and Developing Countries
title_full_unstemmed	The Effect of Biodiesel Policies on World Oilseed Markets and Developing Countries
title_sort	effect of biodiesel policies on world oilseed markets and developing countries
publisher	World Bank, Washington, DC
publishDate	2013
url	http://documents.worldbank.org/curated/en/2013/05/17734486/effect-biodiesel-policies-world-oilseed-markets-developing-countries http://hdl.handle.net/10986/15592
_version_	1764429517542129664

The Effect of Biodiesel Policies on World Oilseed Markets and Developing Countries

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