Public Acceptance of an Increase in the Mandatory Biodiesel Blending Ratio: An Evaluation to Guide Policymaking in South Korea

South Korea has decided to increase the mandatory biodiesel (BD) blending ratio from 5.0% to 8.0% in 2030 to mitigate CO2 emissions. This study provides a nationally representative empirical estimate of public willingness to pay (WTP) specifically for increasing the mandatory BD blending ratio, and addresses a critical gap in the literature on biofuel policy acceptance. Although a one-and-one-half-bound format was employed, the single-bound spike model is adopted as the main specification due to evidence of response effects. This paper seeks to delve into public acceptance of the increase by gathering and analyzing the data on the public’s WTP through the application of contingent valuation (CV). Based on a national CV survey administered over a five-week period from mid-April to mid-May 2025, 1000 valid observations were obtained and analyzed. Since 60.5% of all respondents stated a WTP of 0, a spike model that could account for this was adopted. The key coefficients and the model achieved statistical significance. The average household WTP figure obtained was KRW 5052.3 (USD 3.50) per annum. Expanding this value to the entire population gives us KRW 111.69 billion (USD 77.46 million) annually, based on December 2024 constant prices. The additional costs in 2030 resulting from the increase will reach KRW 456.24 billion (USD 316.41 million). Since the WTP figure is smaller than these additional costs, it seems that public acceptance is not sufficiently high. Therefore, it is necessary to implement policy measures such as government subsidies and research and development support to reduce the price of BD.