Economics and Business Management

In light of the growing importance of biofuels in the world and Ukraine’s potential for its production, the current research focuses on analyzing the future development of the liquid biofuel market and production possibilities in Ukraine. This research aims at analyzing the current status and future projections of the liquid biofuel market in Ukraine until 2030 using the AGMEMOD model—an econometric, dynamic, partial equilibrium, multi-commodity model. This is a new market for the Ukrainian AGMEMOD model, and it was implemented in the model for the first time. The current paper offers the introduction of state aid in the form of direct support and tax preferences for liquid biofuels producers to meet the needs of the domestic market in biofuels and to achieve the indicative target of 10% consumption of biofuels in the total consumption of motor fuel by the transport sector by 2020. The research suggested conditions for the creation of sustainable development of the liquid biofuel market in Ukraine for a long-term period. All proposed measures, such as direct support for liquid biofuels producers, tax incentives for producers, and the introduction of a mandatory mixing rate, will contribute to achieving the indicative target of 10% consumption of biofuels by the transport sector

biofuel market; AGMEMOD; par al equilibrium; econometric model