Impact and competitiveness of EU biofuel market – First view of the prices of biofuel market in relation to the global players

Xing Liu

No 6501, 107th Seminar, January 30-February 1, 2008, Sevilla, Spain from European Association of Agricultural Economists

Abstract: The goal of this study is to investigate the price relationship of EU biofuel market with other main markets in both horizontal level and vertical level. We first carry out Granger causality between ethanol price of EU, USA and Brazil. Secondly, we use vecto error cointegration Mechnism (VECM) to test the relationship between three selected vegetable oil prices in EU to see the competive potential of EU rapeseed oil compared with imported crude palm oil and soybean oil as the feedstock of biodiesel. Evidence shows that there is a unidirectional Granger causation from both USA and Brazil to EU market. USA price of ethanol is the most influential among the three price series, and EU has the least influence on the contrary. It indicates that it is very necessary for EU to set up its own price indicator, for instance, futures prices in EURONEXT. However, in biodiesel market, production in EU has some potential in competing with outside of the world since rapeseed oil price show some potential in price competition with other vegetable oils.

Keywords: Crop Production/Industries; International Relations/Trade; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 11
Date: 2008
New Economics Papers: this item is included in nep-cse and nep-ene
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa107:6501

DOI: 10.22004/ag.econ.6501

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