Biofuel policy implications on transportation fuel markets

A primary mechanism employed by the United States to chart a sustainable course for biofuel growth is the Renewable Fuel Standard (RFS), which sets targets on biofuel market share on an annual basis. As part of this complex framework, a compliance commodity known as the Renewable Identification Number (unique to each type of biofuel) was created to encourage a competitive marketplace in order to better attain RFS goals. MODL Director, Sauleh Siddiqui, in collaboration with postdoctoral fellow Adam Christensen, developed a mixed complementarity problem (MCP) to incorporate these dynamics and perform scenarios analyses to enhance biofuel market policy in the US. MCPs are particularly suited to such an application as this, as they allow for detailed modeling and analyses of each player in the market.

 

Complementarity model of the United States biofuel market (Siddiqui & Christensen)

Complementarity model of the United States biofuel market (Siddiqui & Christensen)

The biofuel market model development is ongoing, for extended functionality and further application to other challenges arising in the market.

Relevant publications

  • Siddiqui, S., Christensen, A., 2016, “Determining energy and climate market policy using multiobjective programs with equilibrium constraints,” Energy, 94: 316-325, January 2016
    pdf
  • Christensen, A., Siddiqui, S., 2015, “Fuel price impacts and compliance costs associated with the Renewable Fuel Standard (RFS),” Energy Policy, 86: 614 – 624, November 2015
    pdf
  • Christensen, A., Siddiqui, S., 2015, “A mixed complementarity model for the US biofuel market with federal policy interventions,” Biofuels, Bioproducts, & Biorefining, 9(4): 397-411, July 2015
    pdf