Economic Impacts of Bioenergy Production on African Countries

In the context of energy security, climate protection and support of rural development, the production of bioenergy is promoted by various governments and global biofuel production has increased considerably in recent years. In this paper we address the effects of supporting biofuels in developed countries on African countries as well as opportunities and challenges for biofuel production within developing countries. We apply a Computable General Equilibrium model and perform a case study for Malawi. Results indicate that the EU biofuels mandate has impacts on the agricultural world markets which should not be neglected. The case study points out that in order for developing countries to benefit from increasing agricultural prices or an internal biofuel production several conditions need to be met, such as improved market access and capacity building of smallholder farmers or value-adding of the production at the farmer’s level.