Governments have influenced the development of bioenergy, particularly liquid
biofuels (ethanol, biodiesel and pure plant oil used as a fuel), for several decades.
This paper discusses the economics of biofuels and provides an overview of current
policy measures to support their production and consumption. It discusses also how
the different policies supportive of biofuels interact with broader agricultural, energy,
environmental and transport policies, and the relative effectiveness of biofuels in
achieving objectives in these areas. The paper concludes with several
recommendations on further research.
