Assessing the land use change consequences of European biofuel policies

A new study by the IFPRI analyzes the question of indirect land-use change (ILUC) in relation to the EU's Renewable Energy Directive. It finds that ILUC issues are a valid concern, but that the impact depends on the type of feedstock crop used as well as other factors such liberalization of international trade in biofuels. The study follows an earlier assessment that had already found that ILUC issues are a valid concern, but could not determine their degree of magnitude with certainty. The present study uses several methodological improvements to remove that uncertainty and uses updated data on the EU's revised Fuel Quality Directive (FQD). The study results provide estimates of the effects of the biofuel mandate on the prices of different feedstock crops as well as substitution effects under different free trade policy scenarios.

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