Willingness to pay for biodiesel in Spain: a pilot study for diesel consumers

Abstract

One of the priorities of the European Union is to reduce greenhouse gas emissions in order to contribute significantly to climate change mitigation. The aim of this paper is to analyze consumers’ valuation of one type of renewable energy which is important to reach the European emission reduction targets, biodiesel, and to assess the extra price consumers are willing to pay to use biodiesel instead of conventional diesel. In order to achieve these goals, a market survey has been carried out in Aragón (Spain) to collect primary data from diesel consumers. A choice experiment has been used to assess willingness to pay for biodiesel. Results suggest that the consumers’ level of knowledge of biodiesel is not very high although consumers’ perception of the product is quite favourable because they believe biodiesel is less pollutant and reduces greenhouse gas emissions, compared to conventional diesel. Actual consumption of biodiesel is still very low. However, consumers are willing to pay 5% extra to fill up with biodiesel instead of its conventional counterpart.