The risk of food insecurity in the form of higher food prices has prompted policymakers in the United States (US) and European Union (EU) to revise their approach to biofuel development. The US Renewable Fuel Standard (RFS) and EU Directive 2009/28/EC require long term use of renewable energy in transportation, subject to sustainability. This thesis examines the implications of the US RFS and EU Directive 2009/28/EC in a trade context using a partial equilibrium/comparative static framework. The focus is on the effect of the revised biofuels policies on opportunities for developing countries to supply the US and/or EU markets. For the US, the implications when the volume produced and/or required under the RFS is technologically infeasible with imports of ethanol as a potential policy alternative are explored. For the EU, the impact of the sustainability criteria on foreign biodiesel suppliers in terms of compliance cost is examined. In general, the US policy may enhance opportunities for trade while the EU policy will likely inhibit trade. A discussion of the implications of the mandates for developing countries and WTO is included.

The risk of food insecurity in the form of higher food prices has prompted policymakers in the United States (US) and European Union (EU) to revise their approach to biofuel development. The US Renewable Fuel Standard (RFS) and EU Directive 2009/28/EC require long term use of renewable energy in transportation, subject to sustainability. This thesis examines the implications of the US RFS and EU Directive 2009/28/EC in a trade context using a partial equilibrium/comparative static framework. The focus is on the effect of the revised biofuels policies on opportunities for developing countries to supply the US and/or EU markets. For the US, the implications when the volume produced and/or required under the RFS is technologically infeasible with imports of ethanol as a potential policy alternative are explored. For the EU, the impact of the sustainability criteria on foreign biodiesel suppliers in terms of compliance cost is examined. In general, the US policy may enhance opportunities for trade while the EU policy will likely inhibit trade. A discussion of the implications of the mandates for developing countries and WTO is included.