An assessment of climate risks on the stability of biomass supply and biofuel production

Global warming has altered regional temperatures and precipitation, potentially leading to deviations from planned biofuel production and emission-reduction targets. This study revisits the market equilibrium of agricultural and biofuel production under climate risk, using updated IPCC projections. It employs a two-stage stochastic programming model to examine the overall effect of climate change on Taiwan's biofuel production. The results indicate that biofuel production depends on the level of climate impact and emission prices. In addition, total input use is generally between 2.79 and 4.72 million tonnes. The higher the gasoline price, the sooner the producer will exhaust its production capacity. While Taiwan could sustain biofuel production when gasoline and emission prices are high, a substantial land-use change would occur. Approximately 74 500–81 900 hectares of idle land will return to production. However, the increase in cropland supply may not lead to biofuel expansion, as it has a limited ability to offset emissions.