Economic effects of the liquid biofuel industry in South Korea using input–output analysis

Hyoung-Ju Seo, Ha-na Kim and Eui-Chan Jeon

Energy & Environment, 2020, vol. 31, issue 3, 424-439

Abstract: Bio-energy is a research field that is of worldwide interest. South Korea, which imports all of its heavy fuel oil for consumption, passed a new law allowing bio-heavy oil made from animal fat, by-product of biodiesel processes, palm oil, and other leftover oil to be used to generate electricity in place of heavy fuel oil. As there is lack of policy research with respect to liquid biofuels, the purpose of this study is to define the bio-heavy oil industry in South Korea and to investigate the economic effects of bio-heavy oil. An input–output analysis model was used and demonstrated that the production-, value-added-, import-, and employment-induced effects of the bio-heavy oil industry were larger than those induced by the heavy fuel oil industry. As the import of fuel by the heavy fuel oil industry was greater than the bio-heavy oil industry, the import substitution effect of the bio-heavy oil industry was found to be greater. This resulted in a positive value for the net-induced effect of the bio-heavy oil industry. When considering the global concern with respect to the development and expansion of biofuel feedstock, this study shows the possibility of transforming heavy fuel oil plants distributed around the world into renewable energy sources.

Keywords: Bio-heavy oil; biofuel industry-induced effect; liquid biofuel power generation; input–output analysis; economic effects of liquid biofuel; bio-heavy oil industry in South Korea (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:sae:engenv:v:31:y:2020:i:3:p:424-439

DOI: 10.1177/0958305X19874317

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