BIODIESEL CONSUMPTION OUTLOOK IN MEXICO

Abstract

Mexico has a developing biodiesel market. Although the international trend of production and consumption has increased over the last decade, the quantities produced in the country are still minimal compared to those of petrodiesel. To understand the reasons why Mexico has an under-exploited and under-utilized market, this work describes the current demand situation with a theoretical proposal of a model that responds to seven explanatory variables of its behavior: price of biodiesel, price of petrodiesel as a substitute good, price of petrodiesel as a complementary good, income of the population, number of transports with a functional diesel engine, certifications, and the availability of the product in the supply chain. The lack of regulation regarding the norms for the production, handling, transport, and disposal of this type of biofuel means that there is still no defined biodiesel market in Mexico, which means that most biodiesel production is destined for self-consumption or informal retail sales, which means that the product does not have a defined supply chain in the country.