Alternative Approaches to Extend GTAP to Biofuel Crops

The world­wide expansion in the production of biofuels is currently one of the hot topics on the agenda of agricultural and food research. On the one hand the development is welcomed as an additional source of income for farmers on otherwise saturated markets for agri­food products. One the other hand, however, there are growing concerns that with biofuels the volatility of agricultural world prices which are now linked to the development of the crude oil price will increase further. In order to include biofuels in the GTAP model, a simplified version of the GTAP­E model is used as a starting point. Vegetable oils, corn and sugar­beet or –cane can be used as inputs in the production of biofuels in a multi­level structure in the petroleum industry. There is not explicitly added an extra sector; it is all implicit in the petrol sector model. The mechanisms in the model are illustrate by the implementation of a European biofuels directive.