Economic effects of the production of bioethanol for use as fuel

The use of ethanol, made of agricultural material, is practised in many countries as a major substitute for fossil fuels. An increasing trend for ethanol is observed worldwide, and economic effects arise from the new industry. The Ifo Institute, using input/output tables, calculated these effects in a study for the LAB Landwirtschatliche Biokraftstoffe e.V., Berlin. Accordingly, the domestic bioethanol production expected for 2010 represents a production value of ca. €1.1 billion or 1.9 million tons. This in comparison to production plans for 2007 is a three-fold increase. The domestic value-added directly and indirectly from ethanol production for use in the fuel sector, as determined by input-output calculations made by the Ifo Institute, amounts to ca. €2.1 billion. This value-added is based on an aggregate economic output of €3.7 billion.