Year
2022
Abstract
This paper aims at explaining the major drivers of biodiesel market prices by examining agricultural resource prices and gasoil prices for automotive fuels in the context of the EU environmental policy. An econometric analysis was performed using monthly data from November 2006 to January 2016. However, tests for structural breaks show several changes in price behavior. This leads us to estimate a regime-switching model which reveals two main regimes for the biodiesel price pattern. When oil prices are high, biodiesel, rapeseed and diesel oil prices are related, mainly driven by oil prices. When oil prices are low, biodiesel prices are mostly related to rapeseed prices according to EU regulations requiring the blending of biodiesel and gasoil.
DECLERCK, F., INDJEHAGOPIAN, J.P. et LANTZ, F. (2022). Dynamics of biofuel prices on the European market: the impact of EU environmental policy on resources markets. Journal of Energy Markets, 15(1), pp. 19-45.