Consequences of US and EU biodiesel policies on global food security

Abstract Biofuel policies in one country or region can have important effects on agricultural commodity prices and markets around the world. In this study, we employ a multicommodity, multiregion structural economic model of US and international agriculture markets. We investigate two scenarios related to biodiesel policy shifts: (i) an increase in the US mandate for biomass-based diesel use; and (ii) a decrease in the allowable use of biodiesel from food-based feedstocks in the EU. The effects appear moderate, particularly for soybean and rapeseed oil prices, compared to the baseline. The effects depend, to a large extent, on model assumptions and the complex interaction of global policies and markets. Still, the results show these impacts could have important food security implications.