|8 December 2016|

USA

American consumers are willing to pay a premium price – around 11% more than conventional fuels – for second generation biofuels, according to new research.

A team at Washington State University has shown there is a real appetite among citizens to use the sustainable fuel, once it becomes available on a commercial scale. In contrast to first generation biofuels, which used potential food sources – causing potential rises in the price of food, second generation biofuels are made from sustainable biological non-food source.

“We were surprised the premium was that significant,” said Jill McCluskey, WSU professor in the School of Economic Sciences. “We wanted to study people in different regions of the country, to make sure we weren’t just getting a local result, and people in all three cities we studied said they would pay more for these fuels.”

The study included people from Portland, Minneapolis and Boston.

She added: “This new biofuel doesn’t exist commercially yet, so we have to do these studies to make sure there’s a potential market for it. And this shows there clearly is a market.”

Alaska Airlines recently flew a plane from Seattle to Washington, D.C using second generation biofuel made from wood scraps and the study found consumers are more happy to make the personal switch to biofuels when they are made aware of the environmental benefits.

“People in the survey were concerned that the new fuel may put their car at risk, by not running the same as conventional fuel,” she said. “But they also saw the added benefit to the environment.”

Before they were surveyed, half of the participants were given information about second generation biofuels. Those participants were more willing to pay a greater premium, which suggests that marketing the benefits of the new biofuels would improve consumers’ perceptions, McCluskey said.

The research paper – Consumer Preferences for Second-Generation Bioethanol – was published in November in the journal Energy Economics.