2 research outputs found
European biodiesel market and rapeseed oil: what impact on agricultural food prices?
The last decade has seen a rapid increase in the production and
consumption of biodiesel in the EU. This development has been especially
stimulated by EU policy as a means to promote energy security and to reduce
the emissions of greenhouse gases. However, in recent years, biodiesel
production has been questioned due to the possible impact on food prices. This
paper aims to explore the impact of EU biodiesel prices on diesel and rapeseed
oil prices, using a Vector Error Corrections Model (VECM). Impulse response
functions and forecast error variance decompositions are also computed in
order to investigate the interrelationships within the relevant time series. Unlike
the predominant literature, which mainly addresses the US and Brazilian
ethanol sector, this paper focuses on the European biodiesel market. Our results
suggest that biodiesel prices are mainly affected by feedstock prices, but there
is no strong evidence that changes in biodiesel prices affect food prices