Questions of Costs About the French Bio-Fuel Sector by Year 2010

Abstract

By the end of year 2010, each member state of the European Union (the EU) ought to incorporate 5.75% of bio-fuels in the total of fuels used for transportation purposes. In order to achieve such a target, tax incentives are implemented by the French government given that the production of bio-fuels still remains unprofitable, even if oil prices are about $60/barel. After a brief introduction (1), we will first demonstrate the importance borne by the cost of agricultural raw material in the total cost of biofuels (2). For this purpose a sequential multi annual LP model is used (3). Emphasis must be placed on the possible competition between food and energy crops, should the production of energy crops require land exceeding the mandatory 10% set-aside (4). An assessment of the profitability of the different types of bio-fuels is then carried out (5).bio-fuels, Common Agricultural Policy, opportunity cost, energy crops, Kyoto Protocol, Resource /Energy Economics and Policy, C61, Q18, Q42,