The impact of biodiesel consumption by transport on economic growth in the European Union

Abstract

The actual EU strategies of sustainable development have determined a very fast increase in biodiesel consumption within the EU, especially since 2005. In line with these developments, the main aim of this paper is to evaluate the impact from biodiesel consumption by transport on economic growth of the EU. The identification of some groups of countries according to economic growth and biodiesel consumption in transport (cluster analysis) was performed. The relationship between economic growth and energy based on biodiesel consumption (panel data models and Granger causality on panel data) was assessed. In this context, using the available data, we assessed the effects of biodiesel consumption by transport on economic growth in the EU over the period 2010-2016. The results based on the panel data approach indicate a positive, but very low impact of energy obtained from biodiesel consumption by transport on the EU 's economic growth. An increase in energy based on biodiesel by one thousand tons of oil equivalent generated, on average, an increase of 0.0019 percentage points in the real GDP rate in the EU during the period of 2010-2016. There is only a unidirectional Granger causality relationship between these two variables: the biodiesel consumption Granger caused the EU economic growth from 2010 to 2016. Policy recommendations should focus on the extension of biodiesel consumption for transport within the EU by establishing a higher minim percentage of biodiesel in transport.