On the EU–U.S. Biodiesel ‘Splash & Dash' Controversy: Causes, Consequences and Policy Recommendations

Harry de Gorter (hd15@cornell.edu), Dusan Drabik (dusan.drabik@wur.nl) and David Just

No 61425, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: This paper shows that the effects of the U.S. blender’s tax credit of $1/gallon and ‘splash & dash’ had minimal impacts on the EU biodiesel market. Reduced world oil prices and EU tax exemptions, increased rapeseed oil prices and market uncertainty are shown empirically to be the major contributors to reduced profitability of EU biodiesel production. Nevertheless, the EU imposed tariffs sometimes exceeding the tax credit in retaliation for the U.S. ‘splash & dash’ program. Instead, EU imports from the United States can be beneficial for EU taxpayers, fuel consumers as well as U.S. biodiesel producers.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 36
Date: 2010-05-03
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61425

DOI: 10.22004/ag.econ.61425

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