The Implications of Biofuel Policy in Turkey

Abstract

Turkish Energy Regulatory Agency (EMRA) announced in September 2011 that biofuel blending will be mandatory starting from 2013 and 2014 for bioethanol (2%) and biodiesel (1%) respectively. The blending ratio will be increased to 3 percent for bioethanol in 2014 and biodiesel in 2016. This study aims to evaluate the net trade impacts of the blending regulation. In Turkey, sugar beet based ethanol production seems feasible and sustainable. Mandatory blending ratio will increase the capacity utilization of existing plants. Bioethanol blending (2%) will reduce oil imports by 255.2 million US Dollar in 2013. Contribution impact of bioethanol production will be much greater by 2016. But, since Turkey is already a net importer of oilseeds biodiesel, blending implementation will deteriorate the foreign trade balance and 2 percent blending will bring around 488.5 million US Dollar extra import increase in 2015. Therefore, net trade impact of mandatory blending is expected to be negative. [PUBLICATION ABSTRACT]