Sustainable biofuels in Hungary and Europe – self-defeating incentives?

Szendrő, Gábor

Keywords: incentives, sustainable biofuel production, transport, rural development, externalities

Substituting fossil fuels has been a prominent issue in the EU in recent years. Energy security, agricultural and environmental considerations have all played a part in the development of alternative fuels and in the creation of incentives promoting their use. The system, like big systems in general, cannot react to new developments quickly and it seems there are elements that we should seriously consider removing or replacing to avoid adverse effects. This paper will attempt to summarize the current issues and propose possible solutions in the form of seven recommendations to make the European incentive system more effective in the interest of sustainable rural development, an area that is of prime importance for Hungary.

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