The impact of biofuels production development in the European Union

Abstract

The article analyses the effects of the development of biofuel production in the EU (European Union) countries. For this purpose, the authors develop and adapt methodology to determine biofuel production effects considering resource prices, the areas of distribution and employment in the EU. Twenty-seven EU member states are selected for empirical research. Over 98% of production is devoted to first-generation biofuels; therefore, second- and third-generation biofuels are not analysed. The empirical study is carried out by analysing the dynamics of quantitative indicators, and we assess changes in direction by setting the values of qualitative indicators. Quantitative and qualitative indicators are calculated using correlation analysis. The results suggest that the fastest growth of ethanol production in the EU took place in Finland, Ireland and the Netherlands. During the analysed period, Germany and France were the largest producers of ethanol and biodiesel. The regression analysis showed a very strong correlation between the number of jobs created and biofuel production. There is also a very strong correlation between the volume of production of biofuels and land used for biofuel feedstock production. The production of biofuel does not significantly affect food and feed crop prices.