Economic Analysis of Using Bio-fuels in conditions of the Czech Republic

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JEL classification

• Foreign Exchange
• Contingent Pricing; Futures Pricing; option pricing
• Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

Keywords

petrol, diesel, bioethanol, biodiesel, production price

Abstract

Czech Republic as a member state of the European Union obliged to replace 10 % of the consumed fuels by biofuels, by the year 2020. It is impossible to realize this engagement by the contemporary low-percentage adding of biofuels into the fossil fuels. It is necessary to use also pure biofuels, eventually high-percentage mixtures of bio-fuels with fossil fuels. On the ground of higher production costs of the biofuels, it is necessary to set an optimal system of financial support, which shall motivate commercial sphere to produce these biofuels as well as vehicle users to use the biofuels. One of the means to support biofuel’s production is the tax alleviation. The article aims to answer the question, whether it is possible to make the pure biofuels, eventually their high-percentage mixtures, competitive by the tax deduction on the bio-component part.