Understanding Market potential for biodiesel in Spain: A Pilot study based on consumer preferences

The production and use of biodiesel is an important alternative in Europe to diminish the emission of gases in order to fulfill the Kyoto protocol goals. Supported by the Common Agricultural Policy (CAP), the production of biodiesel has increased in Europe but the consumption is only of considerable importance in some countries. In Spain, the consumption of biodiesel is still low compared to other EU countries. The aim of the paper is to analyze consumers’ preferences for biodiesel in Spain. To do that a choice experimental approach has been used to assess consumers’ valuation of different diesel options and calculate the willingness to pay for biodiesel. The data come from a recent survey conducted in Spain (Region of Aragón). Results indicate that diesel users would pay an extra price of 0.05 € to fill biodiesel up instead of fill conventional diesel, which is the highest premium consumers are willing to pay for any diesel attribute considered. The paper also explores factors affecting the premium consumers are willing to pay for this fuel.