Evaluating the macroeconomic impacts of bio-based applications in the EU

Publication

In 2012, the European Commission launched the Bioeconomy Strategy and Action Plan with the objective of establishing a resource-efficient and competitive society that reconciles food security with the sustainable use of renewable resources. This report contributes to the plan by evaluating the macroeconomic impacts of bio-based applications in the EU. These impacts have been evaluated with the computable general equilibrium model MAGNET, considering four bio-based applications, namely biofuel (second generation), bio-chemicals, bio-electricity, and biogas (synthetic natural gas).

The results show that – given the assumed efficiency of conversion technologies, conversion costs, and biomass and oil prices – the second-generation biofuel and biochemical sectors, for the EU, will be the only sectors competing with their conventional counterparts by the year 2030. A substantial part of this impact can be explained by an expected increase in wages, since the production of biomass is relatively labour-intensive. The increase in wages is transferred to other economic sectors and increases consumption and production. Another important contributing factor is the lower oil and fuel price, as a result of oil-based fuel being substituted by bio-based fuel, which in turn benefits the entire economy.

Authors

Edward Smeets, Cristina Vinyes, Andrzej Tabeau, Hans van Meijl, Corjan Brink, Anne Gerdien Prins

Specifications

Publication title
Evaluating the macroeconomic impacts of bio-based applications in the EU
Publication date
20 October 2014
Publication type
Publication
Publication language
English
Product number
1544