Economic and social impacts of the biodiesel industry: Assessment and policy implications in Spain

Abstract

Aim of study: This study evaluates, through the input-output (I-O) methodology, the economic and social impacts (Gross Value Added –GVA– and job creation) of the national biodiesel industry on the Spanish economy in the recent past (between 2005 and 2018). These impacts are also simulated for different scenarios, for an average year following a trend from the past, based on different hypotheses on biodiesel production, trade balance and national production of raw materials. The aim is to guide decision-makers in the planning and design of regulations with implications in the domains of energy, economy and employment.Area of study: Spain.Material and methods: I-O methodology.Main results: The contribution of the biodiesel sector to GVA and job creation in Spain was very high during the construction phase of the biodiesel industry. However, this has been very limited during the operational phase, mainly due to imports of biodiesel and raw material, from Indonesia and Argentina. The economic and social impacts of this industry would be greater if higher amounts of domestic raw materials were used.Research highlights: The results justify public support for the operation of existing biodiesel plants in Spain in order to increase gross domestic product and employment, including the further implementation of specific measures to encourage domestic production. Policy measures to increase the use of national raw materials could include promoting rapeseed as an ideal cereal rotation in Spain and establishing contracting systems that guarantee farmers' profitability.