Structural change in the biofuels era

The onset of large-scale biofuel production has helped lead to a structural change in agricultural markets, tightening the linkages between agricultural and energy commodities. The USA and EU have aggressive mandates in place, which could further strengthen the linkages. The imposition of such mandates reduces the susceptibility of agricultural markets to energy volatility; but increases the supply-side impacts. Feedstock-specific mandates insulate the US biofuels from low oil prices; however, EU biofuel use remains linked with oil prices through aggregate fuel use. Overall, US markets are more vulnerable than the EU to supply-side shocks due to their product-specific mandates. , Oxford University Press.