Working Paper

Who benefits really from phasing out palm oil-based biodiesel in the EU?

Kiel Working Paper, 2203 Download PDF

The latest Renewable Energy Directive (RED II) by the European Union (EU) provides an updated framework for the use of renewable energy in the EU transport sector until 2030. We employ the computable general equilibrium (CGE) model DART-BIO for a scenario-based policy analysis and evaluate different possible futures of biofuel use under four specifications of the RED II. Our results show that conventional biofuels will not become cost competitive to oil-based fuels. Moreover, we demonstrate the impact of the RED II specifications on the global production of food and feed crops. A further focus of this paper lies on the palm oil phase-out as feedstock for biofuels in the EU, to halt deforestation and land-use change in tropical countries. We find that this phase-out has a relatively small impact on global palm fruit production. Moreover, this study shows that the regulation has the potential to act as a technical barrier to trade, discriminating palm oil producing countries in favour of European rapeseed producers.

Authors

Ruth Delzeit - Kiel Institute
Ruth Delzeit
Franziska Schünnemann - Kiel Institute
Franziska Schünemann
Dr. Mareike Söder (geb. Lange) - Institut für Weltwirtschaft (IfW) / Kiel Institute for the World Economy
Mareike Söder