US and international policies affecting liquid biofuels' expansion and profitability

Abstract

US and International Policies Affecting Liquid Biofuels' Expansion and Profitability. Biofuel expansion and profitability is driven by more than just biofuel policy. While direct policies such as subsidies and mandates are analysed, issues such as exchange rates, the blending wall, land use, and indirect greenhouse gas impacts, as well as petroleum prices, greatly affect biofuels' expansion and profitability. The linkage between petroleum prices, ethanol prices and corn prices can be broken when ethanol supplies hit the blending wall. Finally, environmental product performance standards as a condition for renewable standards/subsidies may be an effective mechanism to meet environmental concerns.