Price Transmission and Policies in Biofuels-Related Global Networks

Karel Janda, Ladislav Krištoufek (), Barbora Schererova and David Zilberman
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Barbora Schererova: Prague University of Economics and Business, Faculty of Finance and Accounting

No 2022/05, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This article investigates the connections between the prices of biofuels and many traded commodities and other relevant assets in Europe, USA and Brazil. The analysis uses a comprehensive dataset covering price data for 38 traded titles over the period 2003-2020. We utilize the minimum spanning tree approach to identify price connections in a complex trading system. Our analysis of mutual price connections discovers the major defining features of world leading biofuels markets during the period since the ground-breaking policy initiatives of the 2003 EU Transport Fuel Directive and Energy Taxation Directive. We provide characteristics of main bioethanol and biodiesel markets with respect to government policies and technical and local features of the production and consumption of particular biofuels. Despite a relatively long and dynamically evolving history of biofuels, we find that the biofuels systems in USA, Brazil and Europe do not converge towards the same pattern of relations among fossil fuels, biofuels, agricultural commodities and financial assets.

Keywords: ethanol; biodiesel; minimum spanning tree; energy and agricultural policies (search for similar items in EconPapers)
JEL-codes: C38 Q16 Q42 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2022-03, Revised 2022-03
New Economics Papers: this item is included in nep-agr and nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2022_05

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