Cost Benefit Analysis of Selected Biofuels in the Czech Republic

B.Sc. Victoria Suvorova, MSc

Master's thesis

Abstract:

In the last several years biofuels became one of the main drivers of the energy sector. Czech Republic as well developed its biofuels sector and general consensus on the importance of advantages related to biofuels has been established. However, many researchers and associations such as Sorda et al., Ajanovic, Food and Agriculture Organization of the United Nations, etc. see several shortcomings of biofuels industry expansion. Therefore, the net costs of biofuels utilization in the Czech Republic are not clear yet. There is a gap in the estimation of economic costs and benefits of the industry. This thesis aims to narrow the gap with a research on economic welfare effects of the biodiesel and bioethanol industry expansion in the Czech Republic including the factor of biofuels policies. Cost benefit analysis was conducted with a consumer and producer surplus theory approach based on econometrically modeled functions of selected biofuels demand and supply. The results of the research are contradictory, however it is clear that biodiesel and bioethanol utilizations and subsidies presence on the market result in the net economic loss of 9.109 million CZK. The research outcomes prove the problem of too intense direct financial support of the biofuels sector in the Czech Republic and the need to increase indirect methods of support such as investments in R&D and infrastructure development.

Keywords

biodiesel, bioethanol, subsidies, Czech biofuel industry

Language used: English

Date on which the thesis was submitted / produced: 31. 3. 2016

Thesis defence

• Supervisor: Ing. Petr Procházka, MSc Ph.D.

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme / field:
Economics and Management / Economics and Management