Calculation of Raw Material Prices and Conversion Costs for Biofuels

  • Gunter FestelEmail author
  • Martin Bellof
  • Martin Würmseher
  • Christian Rammer
  • Eckhard Boles
Part of the Lecture Notes in Energy book series (LNEN, volume 27)


The current taxation benefits for biofuels are only temporary. Therefore, biofuel production costs need to be able to compete with those of conventional fuels in order to gain market share in the future. However, highly complex influencing factors make a comparison of biofuel production costs with those of fossil fuels challenging. This chapter has three major goals: (1) a projection of future feedstock prices for biofuels based on the development of the price for crude oil, (2) a simulation of the effects of likely economies of scale from scaling-up production size and technological learning on production costs and (3) a scenario analysis comparing different biofuels and fossil fuels. European biofuel production costs for 2015 as well as 2020 are projected based on a calculation model for biofuel production. Our scenarios assume prices for crude oil between Euro 50 and Euro 200 per barrel for both reference years. Our results indicate that mid- to long-term, second-generation biofuels are very likely to achieve competitive production costs, if technological learning and economies of scale are factored in. Bioethanol made from lignocellulosic biomass and biodiesel from waste oil promise the highest cost-saving potential in all crude price scenarios and are capable of outperforming fossil fuels and first-generation biofuels in the future.


Biofuels Production costs Scale effects Learning curve effects 


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Copyright information

© Springer-Verlag London 2014

Authors and Affiliations

  • Gunter Festel
    • 1
    • 2
    • 3
    • 4
    Email author
  • Martin Bellof
    • 2
  • Martin Würmseher
    • 3
    • 4
  • Christian Rammer
    • 5
  • Eckhard Boles
    • 6
  1. 1.Festel CapitalFuerigenSwitzerland
  2. 2.Autodisplay Biotech GmbHDusseldorfGermany
  3. 3.Butalco GmbHFuerigenSwitzerland
  4. 4.Department of Management, Technology, and EconomicsSwiss Federal Institute of Technology ZurichZurichSwitzerland
  5. 5.Centre for European Economic Research (ZEW)MannheimGermany
  6. 6.Institute of Molecular BiosciencesGoethe-University FrankfurtFrankfurt am MainGermany

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