Staff View: Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach

Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach

The European Union (EU) Renewable Energy Directive set a target of 20 % share of energy from the renewable sources and 10% share of renewable energy specifically in the transport sector.This has resulted in some countries looking for bio-based alternative energies which lead to the increase in deman...

Full description

Saved in:

Bibliographic Details
Main Authors:	Applanaidu, Shri Dewi, Mohamed Arshad, Fatimah, Shamsudin, Mad Nasir, Alias, Mohammad
Format:	Article
Language:	English
Published:	Universiti Utara Malaysia Press 2011
Subjects:	HB Economic Theory S Agriculture (General)
Online Access:	http://repo.uum.edu.my/9904/1/ijms18sp5.pdf http://repo.uum.edu.my/9904/ http://ijms.uum.edu.my/index.php/previous-issues/viewcategory/7-ijms-vol-18-special-issue-2011
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my.uum.repo.9904
record_format	eprints
spelling	my.uum.repo.99042016-12-06T06:29:59Z http://repo.uum.edu.my/9904/ Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach Applanaidu, Shri Dewi Mohamed Arshad, Fatimah Shamsudin, Mad Nasir Alias, Mohammad HB Economic Theory S Agriculture (General) The European Union (EU) Renewable Energy Directive set a target of 20 % share of energy from the renewable sources and 10% share of renewable energy specifically in the transport sector.This has resulted in some countries looking for bio-based alternative energies which lead to the increase in demand for bio-based feedstocks such as palm and rapeseed oil (for biodiesel) and sugar cane and corn (for ethanol).One of the new elements in the palm oil market is the growing demand for this commodity as a feedstock to biodiesel production.This will also put Malaysia in a better light on the international front for taking the effort to reduce carbon emissions.In line with this, the palm oil sector in Malaysia will be able to match the New Economic Model’s (NEM) major goals of high income, sustainability and inclusiveness.This new development is affecting the dynamics of the market, in particular, the supply and demand sectors of this commodity.This paper seeks to examine the impact of biodiesel demand on the Malaysian palm oil industry.This paper proposes a structural econometric model consisting of nine structural equations and four identities.The model has been estimated by the two stage least squares method using annual data for the period 1976–2010.The specification of the structural model is based on a series of assumptions about general economic conditions, agricultural policies and technological change.The study indicates that counterfactual simulation of a sustained 30% increase in biodiesel demand predicts a positive increase (2.48%) in palm oil exports for non-biodiesel, 13% increase in the domestic price of palm oil and a marginal increase in production.An increase in export demand would make Malaysia more competitive regionally and globally with benefits accruing to all Malaysians.Apart from this, the biodiesel demand income is also sustainable and will position the nation on the right path towards a high income country by 2020 Universiti Utara Malaysia Press 2011 Article PeerReviewed application/pdf en http://repo.uum.edu.my/9904/1/ijms18sp5.pdf Applanaidu, Shri Dewi and Mohamed Arshad, Fatimah and Shamsudin, Mad Nasir and Alias, Mohammad (2011) Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach. International Journal of Management Studies (IJMS), 18. pp. 73-90. ISSN 0127-8983 http://ijms.uum.edu.my/index.php/previous-issues/viewcategory/7-ijms-vol-18-special-issue-2011
institution	Universiti Utara Malaysia
building	UUM Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Utara Malaysia
content_source	UUM Institutionali Repository
url_provider	http://repo.uum.edu.my/
language	English
topic	HB Economic Theory S Agriculture (General)
spellingShingle	HB Economic Theory S Agriculture (General) Applanaidu, Shri Dewi Mohamed Arshad, Fatimah Shamsudin, Mad Nasir Alias, Mohammad Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach
description	The European Union (EU) Renewable Energy Directive set a target of 20 % share of energy from the renewable sources and 10% share of renewable energy specifically in the transport sector.This has resulted in some countries looking for bio-based alternative energies which lead to the increase in demand for bio-based feedstocks such as palm and rapeseed oil (for biodiesel) and sugar cane and corn (for ethanol).One of the new elements in the palm oil market is the growing demand for this commodity as a feedstock to biodiesel production.This will also put Malaysia in a better light on the international front for taking the effort to reduce carbon emissions.In line with this, the palm oil sector in Malaysia will be able to match the New Economic Model’s (NEM) major goals of high income, sustainability and inclusiveness.This new development is affecting the dynamics of the market, in particular, the supply and demand sectors of this commodity.This paper seeks to examine the impact of biodiesel demand on the Malaysian palm oil industry.This paper proposes a structural econometric model consisting of nine structural equations and four identities.The model has been estimated by the two stage least squares method using annual data for the period 1976–2010.The specification of the structural model is based on a series of assumptions about general economic conditions, agricultural policies and technological change.The study indicates that counterfactual simulation of a sustained 30% increase in biodiesel demand predicts a positive increase (2.48%) in palm oil exports for non-biodiesel, 13% increase in the domestic price of palm oil and a marginal increase in production.An increase in export demand would make Malaysia more competitive regionally and globally with benefits accruing to all Malaysians.Apart from this, the biodiesel demand income is also sustainable and will position the nation on the right path towards a high income country by 2020
format	Article
author	Applanaidu, Shri Dewi Mohamed Arshad, Fatimah Shamsudin, Mad Nasir Alias, Mohammad
author_facet	Applanaidu, Shri Dewi Mohamed Arshad, Fatimah Shamsudin, Mad Nasir Alias, Mohammad
author_sort	Applanaidu, Shri Dewi
title	Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach
title_short	Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach
title_full	Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach
title_fullStr	Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach
title_full_unstemmed	Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach
title_sort	impact of biodiesel demand on the malaysian palm oil industry: a simultaneous equations approach
publisher	Universiti Utara Malaysia Press
publishDate	2011
url	http://repo.uum.edu.my/9904/1/ijms18sp5.pdf http://repo.uum.edu.my/9904/ http://ijms.uum.edu.my/index.php/previous-issues/viewcategory/7-ijms-vol-18-special-issue-2011
_version_	1644280234540793856
score	13.211869

Impact of biodiesel demand on the Malaysian palm oil industry: A simultaneous equations approach

Similar Items