Utformning av kvotpliktsystem för biodrivmedel

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The EU's renewables directive requires that the consumption of biofuels must increase. In a VTI report Johanna Jussila Hammes studies the design of a biofuels quota system and its cost effectiveness with the help of an analytic model on three different ways to formulate a quota.

The quota system will be cost effective if trade in biofuels certificates is allowed. It is also possible to use biogas in order to increase the system's cost effectiveness.

"Double counting" some biofuels will make it easier to reach the quota and lowers the consumer price of fuels, but will not provide any support for the doubly counted biofuels. Fuel quality requirements can reduce the cost effectiveness of the system. This may be helped if biofuels in high concentrations also can be counted towards the quota.

De Gorter and Just (2009) show how a biofuels quota in conjunction with a tax rebate to biofuels constitutes a subvention to the consumption of all fuels. For this reason, we recommend that no tax rebate will be given to biofuels included in a quota system.

Given that the number of firms in the fossil fuel and the biofuels sectors are about the same, and that the quota is not very strict, the quota system will reduce eventual market power. The same result applies to the biofuel certificate market, where trade in the certificates increases welfare even in the presence of market power.

Johanna Jussila Hammes ends with a short literature overview of the direct and the indirect land use change, and of the effect of biofuels on the price of food.

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