The emergence of biofuel as a renewable energy source offers opportunities for climate change mitigation and greater energy security for many countries. At the same time, biofuel represents the possibility of substitution between energy and food.

This paper examines economy-wide impacts of expansion of biodiesel production to meet the blending target using a computable general equilibrium model. Assesses impacts of biodiesel expansion on household welfare, other sectors of the economy, carbon emissions, rural development, and employment generation.