Producing biodiesel from soybeans in Zambia: An economic analysis

Dusan Drabik, Harry de Gorter, Govinda R. Timilsina*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)

Abstract

Facing a huge fiscal burden due to imports of its entire petroleum demand in the face of ample supply of agricultural land to produce biofuels, Zambia has recently introduced a biofuel mandate. However, a number of questions, particularly those related to the economics of biofuels, have not been fully investigated yet. Using an empirical model, this study analyzes the economics of meeting the biodiesel mandate using soybean oil. The study finds that meeting the biodiesel mandate would reduce social welfare, mainly because of the welfare loss to fuel consumers and net reduction in foreign exchange earnings due to soybean oil imports. However, if Zambia increases its domestic soybean supply, as well as oil yield, soybean-based biodiesel is likely to be welfare-beneficial. The country's welfare is found to be the highest under expanded soybean production and its domestic processing but with no biodiesel mandate.

Original languageEnglish
Pages (from-to)103-109
JournalFood Policy
Volume59
DOIs
Publication statusPublished - 2016

Keywords

  • Biodiesel
  • Biofuel policy
  • Biofuels
  • Soybean
  • Sub-Saharan Africa
  • Zambia

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