Energy transition

Biofuel markets

  

 

The research work has analysed the potential for bioenergy with respect to price and availability. Hence, it performed new econometric estimations on the models of the biofuel markets.

Researchers used the innovative wavelet coherence methodology to investigate the relations between prices of ethanol and its feedstock. The continuous wavelet framework allows for discovering price connections and their evolution in both time and frequency domain in the two most important ethanol markets, Brazil and the United States of America (USA).

For both markets, it has been shown that the relationship between the prices of ethanol and corn in the USA or sugar in Brazil is positive, strong, and stable over the long-run.

The results show that the prices of feedstock lead the prices of ethanol and not the other way around.

These results support the hypothesis that the global warming mitigation potential of ethanol biofuels is not significantly compromised by their impact on food security.

 

Read further

Kristoufek, L., Janda, K., & Zilberman, D. (2016). "Comovements of ethanol‐related prices: evidence from Brazil and the USA." Gcb Bioenergy, 8(2), 346-356.