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Abstract

The growing demand of green maize for biogas production in Northern Italy has triggered an intense debate concerning land rents, maize prices and their possible negative consequences on important agri-food chains. The aim of this work is to quantify the extent to which the rapid spread of biogas raised the maize price at regional level, increasing the demand of land for energy crops. For this purpose we built a partial-equilibrium model simulating the agricultural sector and the biogas industry in Lombardy, under two alternative subsidization schemes. Results show that policy measures implemented in 2013 – reducing the average subsidy per kWh – may contribute to enforce the sustainability of the sector and decreasing its competition with agri-food chains: maize demand for biogas would decrease, compared to the old scheme, lessening the market clearing price and reducing land demand for energy purposes.

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