Support Theme: Economic potential and impacts of regulations

Support Theme leader: Dr Uwe Schneider

See the publications section for reports and presentations from this theme.

Summary

This Support Theme will address economic and regulatory issues surrounding the bioproduct development from non-food crops and applications emerging from the RTD content of the Flagship Themes. Through collaborating closely with the European Non-food Agriculture (ENFA) SSP, we will gain data, analyses and a modelling system to analyse the issues arising from the Flagship Programmes of EPOBIO, as well as gain access to the wider European links of ENFA to other EC-funded and national programmes of economic and regulatory analyses.

Detailed Information

Technological improvements of EPOBIO’s new agricultural products (biopolymers, industrial oils, cell wall products) involve two steps:

Microeconomic analysis

Entering and penetrating established markets with new products will be only possible if the products are better or cheaper. Full cost analysis for the whole cycle of biological based products from seeding through production to waste disposal is necessary to find cost reduction potentials. Nevertheless benefits to the environment have to be estimated and external costs of petrochemical-based products have to be estimated to find regulations to speed up the market penetration without subsidisation of the new products.

Macroeconomic analysis

Formatted, microeconomic technological data will be input to the ENFA model. This model allows an estimation of the competitive economic potential of new products taking into account:

Competition for agricultural and forest land between food and non-food products

Heterogeneity of natural conditions, crop technologies, and farms

Changes in aggregate commodity supplies, trade volumes, market prices

Land management adjustments for each crop relating to tillage, irrigation, fertilizer use

Multi-environmental impacts

Existing and potential policies

The ENFA model is a dynamic optimisation model, which simulates economic activities and markets in the European agricultural and forest sectors. The model integrates environmental impacts and international trade beyond the European Union. Accessing the ENFA model involves choosing (optimising) agricultural, forest, and processing sector activities in all regions such that the resulting total benefit across all regions and across all product and input market is maximized. Model constraints reflect available technologies, natural resource endowments (land, land qualities, water), input supply functions (labour, fuels, chemicals, etc.), industry or consumer demand functions, interregional trade opportunities, and governmental policies.