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The role of policy on bioenergy markets



The role of policy is fundamental when studying the development of bioenergy in Europe. There are different benefits produced by the use of wood biomass for energy, which have been encouraged through different policies. Particularly relevant to understand these aspects is the concept of externalities, whether positive or negative. At EU and national level, there are different policy bodies that are related to bioenergy, related to energy policy, agricultural policy and environmental policy, which are reviewed and described. Finally, the session introduces to different economic instruments that can be used to implement energy targets and directly affect market development. Also, their use by different countries is discussed.


Lecture Slides [PDF]


Chapter 1, Markets and policy. In: Pelkonen, P. et al. eds. (2014) Forest Bioenergy for Europe. What Science can tell us, 4. European Forest Institute. pp 109. [PDF]

Ericsson, K., Huttunen, S., Nilsson, L. J., & Svenningsson, P. (2004). Bioenergy policy and market development in Finland and Sweden. Energy policy32(15), 1707-1721. [PDF]

Complementary Materials

Chapter 4. Development of bioenergy trade in four different settings–The role of potential and policies.Thrän, D., Hennig, C., Thiffault, E., Heinimö, J., & Andrade, O. (2014). In International Bioenergy Trade (pp. 65-101). Springer Netherlands. [RG] [printouts]

(previous years [PDF])


Externality "is a cost or benefit that is imposed on a third party who did not agree to incur that cost or benefit. The concept of externality was first developed by economist Arthur Pigou in the 1920s. Air pollution from motor vehicles is an example of a negative externality. The costs of the air pollution for the rest of society is not compensated for by either the producers or users of motorized transport." [Wikipedia]



What is the role of externalities associated to energy policy?

What are the main policy layers related to bioenergy in the European Union?


[These questions may help the students to focus and reflect on the topic contents. They do not require to be submitted as an assignment and are not to be evaluated.]



This session focuses on:

  • To get familiar with the main concepts on policy making affecting bioenergy
  • To understand the concept of externality and its relation to policy making
  • To review the different policies related to bioenergy, at national and EU level, specifically the energy policy, the CAP and the environmental protection policies.


Plaza de España, Barcelona. A combination of soft rules and traffic lights regulate a 6-plus-bus-lane roundabout with heavy traffic.


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