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1 CO N SUMER PERCEPTION OF BIOFUELS IN COUNTRIES WITH DIFFERENT LEVELS OF MARKET DEVELOPMENT: A CASE STUDY OF GAINESVILLE, FLORIDA (U.S.) AND WARSAW, POLAND By MALGORZATA SZCZUPSKA A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE UNIVERSITY OF FLORIDA 2011
2 Mal gorzata Szczupska
3 To my m other
4 ACKNOWLEDGEMENT S I would like to express my deepest gratitude to my promoter Dr. Lisa House. It would have not been possible to have completed this thesis without her support and help. I am grateful for her kindness and cordiality. I am really thankful for her guidance throughout the whole research, and especially for her valuable methodical and material advices. I express my sincere gratitude for running the regression models through LIMDEP and for spending time to show me how to read and understand the results. I am also really thankful for spending extra time helping me even during holidays. I would like to thank for invaluable discussions in G ainesville and conversations on Skype across the Atlantic Ocea n. I want to thank her for her patience and understanding. I am very appreciative of the support and assistance I received from Dr. R. Jeffrey Burkhardt in my studies at the University of Florida. I am grateful to my promoter Prof. Dr. ir. Wim Verbeke for inspiration and guidance in choosing the topic of my master thesis during my study in Ghent. I would like to acknowledge Prof. Adam Kupczyk from the Warsaw University of Life Sciences in Poland with my gratitude for help ing in organizing my research, who provided valuable advice and his time. I am thankful to the E uropean Commission and the ATLANTIS Board for the exceptional opportunity to take part in the Atlantis Program. I would like to thank ATLANTIS secret ariat and the coordinators for their help wi th my master studies. Also, special thanks to all my friends in Ghent, Berlin, Pisa, and Gainesville, for spending these amazing two years together, which was the best time of my life. Finally, my deepest gratitude to m y family, and especially to my m other for supporting me emotionally throughout these most challenging two years.
5 TABLE OF CONTENTS page ACKNOWLEDGEMENT S ................................ ................................ ................................ 4 LIST OF TABLES ................................ ................................ ................................ ............ 7 LIST OF FIGURES ................................ ................................ ................................ .......... 8 LIST OF ABBREVIATIONS ................................ ................................ ........................... 11 ABSTRACT ................................ ................................ ................................ ................... 12 CHAPTER 1 INTRODUCTION ................................ ................................ ................................ ..... 14 Problem Description ................................ ................................ ................................ 14 General Objectives ................................ ................................ ................................ .. 16 Specific Objectives ................................ ................................ ................................ .. 16 Hypotheses ................................ ................................ ................................ ............. 17 Structure of the Thesis ................................ ................................ ............................ 17 2 BIOFUELS INDUSTRY ................................ ................................ ........................... 19 World Energy ................................ ................................ ................................ .......... 19 Renewable Energy ................................ ................................ ................................ .. 20 Biofuels Characteristics ................................ ................................ ........................... 20 Definiti ons, Types and Generations of Biofuels ................................ ....................... 21 World Biofuels Market ................................ ................................ ............................. 22 3 THE BIOFUELS MARKET IN THE UNITED STATES ................................ ............ 26 Biofuels Policy in the United States ................................ ................................ ......... 26 An Overview of Biofuels in the United States ................................ .......................... 29 Production of Biofuels ................................ ................................ ............................. 29 The Biofue ls Market in Florida ................................ ................................ ................. 32 4 THE BIOFUELS MARKET IN POLAND ................................ ................................ .. 34 Biofuels Policy in Poland ................................ ................................ ......................... 35 Biofuels Policy in the European Union ................................ ................................ .... 38 An Overview of Biofuels in Poland ................................ ................................ .......... 39 Production of Biofuels ................................ ................................ ............................. 40 Support for Agricultural Production ................................ ................................ ......... 40 5 RESEARCH ABOUT CONSUMER PERCEPTION ................................ ................. 42 Consumer Behavior Aspects ................................ ................................ ................... 42
6 Overview of the Previous Reports about Consumer Perception towards Biofuels ................................ ................................ ................................ ................ 42 Analysis of Influencing Factors ................................ ................................ ......... 45 6 S URVEY METHODOLOGY ................................ ................................ .................... 53 Sampling D escription ................................ ................................ .............................. 53 Description of M easurements ................................ ................................ .................. 54 Demographics ................................ ................................ ................................ ......... 57 Data A nalysis ................................ ................................ ................................ .......... 58 Results ................................ ................................ ................................ .................... 59 Knowledge about Biofuels ................................ ................................ ................ 59 Environmental Aspects about Biofuels ................................ ............................. 63 Behavioural Intention and Behaviour ................................ ................................ 65 Biofuels Perspectives and Information Sources ................................ ................ 68 7 MODEL SPECIFICATIONS AND RESULTS ................................ ........................... 93 Tobit Model ................................ ................................ ................................ ............. 93 Tobit Results ................................ ................................ ................................ ........... 97 Demographics ................................ ................................ ................................ ... 97 Knowledge about Biofuels ................................ ................................ ................ 98 Fo od versus Fuel Preference ................................ ................................ ............ 99 Perceived Consumer Effectiveness ................................ ................................ .. 99 New Environmental Paradigm ................................ ................................ ........ 100 Biofuels Economy ................................ ................................ ........................... 100 Biofuels Persp ectives ................................ ................................ ..................... 100 Information Sources ................................ ................................ ........................ 100 8 CONCLUSIONS ................................ ................................ ................................ .... 107 Summary ................................ ................................ ................................ ............... 107 Discussion of the Statistical Results ................................ ................................ ...... 108 Final Remarks ................................ ................................ ................................ ....... 112 Education and Marketing Incentives ................................ ................................ ..... 114 APPENDIX A SURVEY ................................ ................................ ................................ ............... 115 B DESCRIPTION OF THE UNIVERSITIES IN THE UNITED STATES AND POLAND ................................ ................................ ................................ ............... 124 LIST OF REFERENCES ................................ ................................ .............................. 127 BIOGRAPHICAL SKETCH ................................ ................................ .......................... 131
7 LIST OF TABLES Table page 4 1 Quantity of transport fuels and percentage share of biocomponents placed on the market in the period 2000 2010 ................................ .................... 41 6 1 UF student o pinion with the characteristics of biofuels ................................ ..... 87 6 2 WULS student opinion with the characteristics of biofuels ................................ 87 6 3 New Environmental Paradigm (NEP) scale in the United States ....................... 88 6 4 New Environmental Paradigm (NEP) scale in Poland ................................ ........ 89 6 5 Level of importance considering future car characteristics in the United States ................................ ................................ ................................ .................. 90 6 6 Level of importance considering future car characteristics in Poland ................. 91 6 7 Preference of future engine types in the United States ................................ ...... 92 6 8 Preference of future engine types in Poland ................................ ...................... 92 7 1 Explanation of variable coding ................................ ................................ ......... 102 7 2 Tobit analysis results ................................ ................................ ....................... 104
8 LIST OF FIGURES Figure page 2 1 World primary energy demand by fuel in the Reference Scenario by 2030 ....... 24 2 2 Renewable energy share of global energy consumption ................................ ... 25 2 3 Global biofuels production between 2000 and 2007 ................................ .......... 25 2 4 Global biofuels production in 2007 ................................ ................................ ..... 25 3 1 Biofuels production in the United States between 1990 2008 ............................ 33 6 1 University of Florida respondents, divided by College. ................................ ...... 71 6 2 Warsaw University of Life Sciences respondents, divided by College. .............. 7 2 6 3 Standing of the respondents at the University of Florida ................................ .... 71 6 4 Standing of the respondents at the Warsaw University of Life Sciences ........... 72 6 5 Level of knowledge about biofuels among student at the University of Florida ................................ ................................ ................................ ................. 72 6 6 Level of knowledge about biofuels among student at WULS ............................. 72 6 7 ................................ .................. 73 6 8 biofuels. ................................ .............. 73 6 9 U.S. student knowledge of raw materials that can be converted to biofuels. ................................ ................................ ................................ .............. 73 6 10 Polish student knowledge of raw materials that can be converted to biofuels. ................................ ................................ ................................ .............. 74 6 11 UF student belief in availability of biofuels in Florida. ................................ ......... 74 6 12 WULS student belief in availability of biofuels in Florida. ................................ ... 74 6 13 UF student belief of the sustainable alternative of biofuels compared to traditional fossil fuels. ................................ ................................ .......................... 75 6 14 WULS student belief of the sustainable alternative of biofuels compared to traditio nal fossil fuels. ................................ ................................ ...................... 75 6 15 ............................. 75 6 16 .......................... 7 6 6 17 ........ 76
9 6 18 issues. ................................ ................................ ................................ ................. 76 6 19 Perceived Consumer Effectiveness (PCE) scale in the United States. .............. 77 6 20 Perceived Consumer Effectiveness (PCE) scale in Poland. .............................. 77 6 21 .............. 77 6 22 ......... 78 6 23 Influence of biofuels production on the food price in the United States .............. 78 6 24 Influence of biofuels production on the food price in Poland .............................. 78 6 25 Preference of gasoline brand by UF students. ................................ ................... 79 6 26 Preference of gasoline brand by WULS students. ................................ ............. 79 6 27 ................................ .......................... 79 6 28 ................................ ....................... 80 6 29 ............................. 80 6 30 ....................... 80 6 31 Level of appropriateness of biofuels price in the United States ......................... 81 6 32 Level of appropriateness of biofuels price in Poland ................................ .......... 81 6 33 Proportion of monthly expenses spent on fuel by UF students. ......................... 81 6 34 Proportion of monthly expenses spent on fuel by WULS students. .................... 82 6 35 ............. 82 6 36 ............................. 82 6 37 t in the United States. ................................ ................................ ................................ ..... 83 6 38 ........... 83 6 39 Importance of biofuels adoption in the fuel market perceived by UF students. ................................ ................................ ................................ ............. 83 6 40 Importance of biofuels adoption in the fuel market perceived by WULS students ................................ ................................ ................................ .............. 84 6 41 production ................................ ................................ ................................ ........... 84
10 6 42 production ................................ ................................ ................................ ........... 84 6 43 UF student views of government control over biofuels production. .................... 85 6 44 WULS student views of government control over biofuels production. .............. 85 6 45 UF student belief of biofuels decisions impacting future situation ...................... 85 6 46 WULS student belief of biofuels decisions impacting future situation ................ 86 6 47 U.S. student sources of information about biofuels. ................................ ........... 86 6 48 Polish student sources of information about biofuels. ................................ ........ 86
11 LIST OF ABBREVIATION S AFS Alternative Fuels Standards ARRA American Recovery and Reinvestment Act CAGR Compound Annual Growth Rate CALS College of Agriculture and Life Sciences DOE Department of Energy EIA Energy Information Administration EPA Environmental Protection Agency EU European Union FAME F atty Acid Methyl Ester FFV Flex Fuel Vehicle IEA International Energy Agency IPCC Intergovernmental Panel on Climate Change NEP New Environmental Paradigm NIT National Indicative Target OECD Organization for Economic Cooperation and Development OLS Ordinary Least Squares PCE Perceived Consumer Effectiveness RFS Renewable Fuel Standard SPSS Statistical Package for the Social Sciences UF University of Florida UN United Nations U.S. The United States USDA U.S. Department of Agriculture WULS Warsaw University of Life Sciences
12 Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Science CONSUMER PERCEPTION OF BIOFUELS IN COUNTRIES WITH DIFFERENT LEVELS OF MARKET DEVELOPMENT: A CASE STUDY OF GAINESVILLE, FLORIDA (U.S.) AND WARSAW, POLAND By Mal gorzata Szczupska December 2011 Chair: Lisa House Major: Food and Resource Economics This research analyzes consumer perception of biofuels in the United States and Poland, countries with different levels of market development in biofuels An e mail survey was administered to students at the University of Florida (UF) in Gainesville, Florida in the United States and at Warsaw University of Life S ciences (WULS), Poland. The primary data were collected during April 2011. The data from this survey was used to run a Tobit regression analysis and determine the importance of variables related to the beliefs of biofuels. This research shows that there is no statistical difference between the perception of students in the United States and students in Poland based only on the country they are from. However, considering country as an interaction variable with other i ndependent variables, some differ ences we re identified, as well as many similarities Research revealed that age and gender were not significant in determining views on biofuels. This was not surprising given the lack of variation in these variables. However, the college the students were enrolle d in was significant showing that Polish students from the Faculty of Agriculture and Biology were less supportive toward biofuel s than their U.S. counterparts from College of Agriculture and Life Sciences The level of objective knowledge positively aff ected the p erception of biofuels; however the
13 impact was stronger in Poland. Subjective knowledge was not significantly related to perceptions. Overall, respondents in both countries placed equal importance on a quality factor and cost factor indicating th at environmental friendliness and economy are crucial biofuels. Also respondents in both countries who believe in impact of behavior towards the environment, positively perceived biofuels This belief had a stronger impact among Polish students compared to U.S. students Interestingly, though U.S. and Polish students recognized that the production of biofuels impacts food availability and food prices, it did not have a statistical ly significa nt effect on the overall belief in biofuels. B oth U.S. and Polish respondents who believed that biofuels are a pathway towards economic development, were equally more likely to have a positive view on biofuels. Finally television and radio ; in ternet ; and newspaper s and journalists are important information sources influencing biofuels perception for students Though television and radio is not the most popular source of information, it does positively impact perceptions of biofuels among students from both countries. Surprisingly, information received from internet, which is recognized as the most popular source of information i nfluences student views differently. Students who use the internet more than average as a source of information i n Poland were less likely to have positive perceptions of biofuels, where students from the United States had a more positive perception. Interestingl y information provided by newspapers and journalists had equally negative impacts the perception of biofu els in both countries. Inf ormation received from this research identifies some factors that lead to positive and negative feelings towards biofuels. This information can be used to help d etermine e ducational and marketing actions in order to popu larize kno wledge and create system of incentives for biofuels.
14 CHAPTER 1 INTRODUCTION Problem Description A century ago, Winston Churchill recognized that Safety and certainty in oil lie in variety and variety alone (Fontes, 2010). This holds true today. As in Chu day, energy security still depends on variety. But now that variety needs to be sought in alternative energy sources, rather than sources of oil alone. Currently, the global transport systems remain based on oil. The demand for energy is growing; therefore, the demand for oil is increasing as there are not currently substitutes available on a large scale. Because of these reasons, there is the need to look to other sources of energy. The cornerstone of the future of energy security is the creation of a diverse supply through a varying mix of renewable energy sources and technologies. Recently, the Intergovernmental Panel on Climate Change (IPCC) released a supply cou These sources can substantially contribute to human wellbeing by sustainably supplying energy and stabilising the climate (Edenhofer, Pichs Madruga, & Sokona, 2011) IPCC projections indicates that the investme nts in the renewable energy sources will contribute from 1.4 to 5.1 trillion dollars for the coming decade, and another 1.5 to 7.2 trillion dollars for 2021 2030. O ne possibility that may significantly help in achieving increased energy demand and become regarded as an integral part of the energy mix are biofuels (Fontes, 2010) Recently, biofuels have attracted increased attention of policy makers, industry, researc h and the public. By some, biofuels are characterized as a panacea presenting a high technology solution in the fight against climate change. However others criticize them as a diversion from the climate mitigation actions or a
15 threat to food security (Bri In general biofuels use is increasing around the globe, increased fueling debate between supporters and opponents. The purpose of biofuels differs around the world depending on various aspects, including economic, social a nd environmental issues. Looking ahead, the biggest biofuels challenge is to meet global expectations in terms of sustainability and efficiency without competing with the food chain and creating a negative carbon footprint. The demand for energy is growin g very fast, with projections showing the need to achieve double the current level of energy produced by the middle of the 21 st century (Fontes, 2010) However, the middle of the first decade of the 21 st century was accompanied by the growing crude oil pri ces and increasing food prices. This situation has led to political and public attention on the role of biofuels in terms of the transportat ion According to the U.S. Energy Information Administration (EIA), biofuels will contribute to 27% of fuels in the transport sector by 2050. These economic, social and environmental aspects about biofuels have been recently studied by many international organizations like The World Bank, United Nations (UN) agencies, the Organization for Economic Cooperation and Develo pment (OECD), and the International Energy Agency (IEA). Currently, there exists a lot of information regarding biofuels, however little research was done about existing consumer awareness about this issue in both countries. In general the United States and Poland are countries representing two different levels of biofuels market development. The United States being the largest producer of biofuels, represents an advanced market, however th e Polish market is defined as the market in the early stages of de velopment, with a large scope for
16 increasing production capacities. The biofuels topic in both countries is a crucial issue, showing an increase of public interest. By most people, biofuels are recognized as an alternative energy source, however they lack specific information about this product. Without proper knowledge and environmental awareness about biofuels aspects, development of this market segment will be constrained. In general people have to know what are the advantages and disadvantages of biofu els, and having this knowledge they will be able to stimulate the market development of biofuels. Currently there are a lot of biofuel myths existing in global society, which can be verified by the efficient system of educational and promotional activities So only people with adequate knowledge will be able to affect the level of biofuels development in their countries. General Objectives T he main aim of this study is to analyze consumer perception of biofuels in the United States and Poland with high at tention on the complexity of consumer awareness, within the aspect of the societal awareness. T his study will gauge societal attitudes and understanding of the roles that biofuels share in the daily lives of students These views will then be evaluated in how they contrast between American versus Polish University students concerning the biofuels issues. Specific Objectives The research will describe the following issues: of subjective and objective knowledge about biofuels General feelings of consumers about biofuels s economy Factors influencing decision of purchasing biofue ls Perspectives of biofuels market development Information sources of biofuels
17 Hypotheses The following hypotheses are proposed: I. different II. Consumers in the United States and P oland believe that biofuels are environmentally friendly and safe This Master thesis is based on primary data sources. A survey was conducted among students at the University of Florida in Gainesville, United States and among students at the Warsaw University o f Life Sciences Poland. Students as the homogenous group in t erms of age were chosen in order to avoid having too much influencing factors. Students are an interesting target group, and they can be recognized as the consumers of the future. Participants w ere not selected randomly; therefore the results are limited in that they cannot be generalized to the population. Participants were recruited using convenience sampling methods due to cost restrictions and were limited to students from the University of F lorida in Gainesville and from the Warsaw University of Life Sciences in Poland. Structure of the Thesis This m aster hesis is structured into eight chapters. The first chapter presents the overall description of the research problem, following by the a ims of the study including g eneral and specific objectives and two hypotheses. The second chapter describes the biofuels industry in general according to the world energy information, renewable energy facts and biofuels market data in terms of definitions, divi sion and sustainability aspects The data source s based on the reports from International Energy Agency (IEA), Department of Energy in the European Commission (EC), U.S. Department of Energy (DOE), and the Organization for Economic Cooperation and Development (OECD)
18 The third chapter provides information about the biofuels market in the United States, with a focus on the market in Florida. Legal aspects of the biofuels market are presented, as well as a general overview including available technologies consisting of bioethanol and biodiesel. The data source s based on the reports from the U.S. Environmental Protection Agency (EPA), U.S. Department of Agriculture (USDA) and U.S. Department of Energy (DOE ). The fourth chapter mirrors Chapter 3 but with a focus on the biofuels market in Poland. The data source s based on the reports from the Department of Energy in the European Commission (EC), Polish Central Statistical Office and the Energy Regulatory Off ice and the Energy Market Agency in Poland. A literature review of existing research about consumer percepti ons of biofuels is included in C hapter 5 The data source s based on the reports from the United States, while some was from Poland. Several others h ave conducted similar studies based on different countries. Chapter 6 contains the survey methodology identifying information about the sample used for the survey. The data source s based on the publications of Robinson, Shaver, & Wrightsman, ( 1991) Pete rson (1994), and Hair, Black, & Babin, (2006). Model specifications and r esults are presented in the seventh chapter including data source s based on social science research of Amemiya (1984), Long (1997), Sigelman & Zen (1999) and Gujarati (2004). The f inal chapter includes concluding thoughts and identifies opportunities for future research. The survey form is included as an appendix, followed by description of the universities in the United States and Poland.
19 CHAPTER 2 BIOFUELS INDUSTRY World Energy The proper functioning of the world economy depends on the energy sector, therefore for each country the main priority is to ensure energy security. Increasing energy consumption is the result of technology development, increase living standards of people, and a consumptive model of society of the twenty first century. According to the Reference Scenario (Capros, Mantzos, & Tasios, 2010) over the next 20 years global demand for primary energy will steadily increase. In relation to current situation, demand will increase more than 50% of total primary energy demand, while demand in some groups (such as oil and gas) will increase by up to 60% (Kupczyk, Rudnicki, & Borowski, 2011) Before 2030 the world will use 16.3 btoe (billion tonnes of oil fuel equivalent (toe), or 5.5 btoe more than now and over one third of demand will be indicated by develop ing countries, where the fastest economic a nd population growth is recorded (Figure 2 1). Currently, international markets of oil and gas sector are extremely competitive, especially in the field of exploitation and development of natural gas and crude oil. High developed countries, accompanied by economic development, are becoming consumers of more and more energy and thus becoming producers of more CO 2 The challenge for the economies of the highly developed countr ies, is to search for solutions in order to separate economic growth from increasin g energy consumption. These activities are supported by a number of legislative initiatives, energy efficiency programs and policies concerning use of competitive and efficient renewable energy. Currently W orld needs a new industrial revolution by reducing energy consumption, increasing energy efficiency and energy pro duction from renewable sources (Kupczyk, Rudnicki, & Borowski, 2011)
20 Renewable E nergy The UN Intergovernmental Panel on Climate Change close to y could be met by renewables by mid century (Edenhofer, Pichs Madruga, & Sokona, 2011) However, currently the renewable energy share of global energy consumption is still relatively small. The IPCC indicates that only 13% of the total world energy supply comes from renewable sources, including bioenergy, solar energy, ocean energy, wind energy, geo thermal energy and hydropower (Figure 2 2). Almost three fourth of renewable energy share is dominated by bioenergy/biomass (10.2%). In general b iomass is the b iodegradable portion of products, waste and residues from agriculture, forestry and related industries, as well as the biodegradable fractions of industrial and municipal waste It is used for heating, cooling, producing electricity and transporting biofue ls Currently, biofuels are one of the possible sources of energy that can be used to substitute for fossil fuels in the transportation sector (Directorate General for Energy, 2011) Biofuels C haracteristics The main objective of biofuels development is su stainability. This concept is recognized as the paradigm, explaining social, economical and environmental aspects. In case of energy, sustainability means the provision of energy in such a way that it meets the needs of the present generations without comp romising the ability of future generations to meet their needs. Sustainable energy sources are most often considered to be renewable energy sources, including biofuels. Environmental sustainability specifies the alternative path of reduction of greenhouse gas emissions. Economic sustainability explains sustainable production of biofuels for energy transportation. Social sustainability presents how the production and use of biofuels, impacts local development (Fontes, 2010)
21 Definitions, Types and Generatio ns of Biofuels Biofuels are a liquid or gaseous fuel for transport produced from biomass (European Commission, 2003) The most commonly used biofuels are bioethanol and biodiesel, that can be used in pure form by suitably adapted engines or may be blende d in a mixture with gasoline or diesel, respectively. I n this master thesis, when we refer to biofuels, we are referring to liquid biofuel s for cars. Bioethanol Bioethanol is an alcohol, made by fermenting any biomass with a high content of carbohydrates. It is derived through the fermentation of sugar from cereals like wheat, maize, rye, and barley, and from sugary feedstocks such as sugarcane and sugarbeet. Thou future, cellulosic material may be used. Bioethanol is currently the most popular biofuel and many countries have gasoline fuel standards that require 10% bioethanol blends (Fontes, 2010) Bio diesel Fatty Acid Methyl Ester recycled vegetable oil or animal fats and oils. Raw materials include corn, soybean, pal m, coconut, canola, cottonseed, flax, peanut, sunflower, and rapeseed oils, as wel l as algae. Biodiesel can be used in two forms: as an additive to reduce vehicle emissions; and in its pure form as a renewable altern ative fuel in terms of blending. B iodiesel can be legally mixed with petroleum diesel in any percentage, like B20 for a bl end including 20% biodiesel and 80% petroleum die sel or B100 for 100% biodiesel (Fontes, 2010)
22 Four generations of biofuels B the raw material and technology used to produce them: First Generation derived from raw materials, mainly from food crops or plant and animal fats. Biofuels made from sugar, starch, vegetable oil, or animal fats using conventional technology. Second Generation derived from non food raw material s, agricultural and municipal waste and from conversion of cellulose. These include waste biomass, the stalks of wheat, corn, wood, and special energy or biomass crops. Second generation biofuels use biomass to liquid technology including cellulosic biofue ls from non food crops. Third Generation derived with a suitably modified material at the stage of cultivation. These crops require further research and development to become commercially feasible, such as perennial grasses, fast growing trees and alg ae. They are designed exclusively for fuels production and are commonly referred to Fourth Generation derived from biological processing of carbon (Kupczyk, Rudnicki, & Borowski, 2011). World Biofuels Market Rudolph Diesel, German designer and creator of the diesel engine, in April 1900 at the World Exhibition in Paris, powered his new diesel engine with peanut oil. Diesel was convinced of the great future of his new idea of engine for the transportation indus try In a 1912 speech Diesel said, the use of vegetable oils for engine fuels may seem insignificant today but such oils may become, in the course of time, as important as petroleum of the present time (European Commission, 1994) Also in 1925 Henry Ford, the American founder of Ford Motor Company said, The fuel of the future is going to come from fruit like that sumac out by the road, or from apples, weeds, sawdust almost anything. There is fuel in every bit of vegetable matter that can be ferment ed (Geyer, Chong, & Hxue) He was convinced that the fuel of the future is ethyl alcohol. These words of the pioneer automobile nobody took seriously for a long time, except the Brazilians.
23 The first country that used biofuels on a big scale was Brazil. I t started with ethanol production mixed with gasoline. At that moment the main reason for using biofuels was to improve the inequality between sugar supply and demand on the international markets. In the 60s and 70s, the perception of biofuels as a possibl e replacement for fossil fuel started to emerge and many countries started implementing programs related to biofuels policy and technologies (Fontes, 2010) According to International Energy Agency (IEA), global fuel demand at the end of 2010 amounted to 8 6.9 million barrels per day and the supply of biofuels was estimated at about 1.8 million barrels a day. Between 2000 and 2007 (Figure 2 3), the g lobal biofuel production has trip led from 4.8 billion gallons to about 16.0 billion but still accounted for l ess than 2% of the global transportat ion fuel supply (Coyle, 2007) About 90% of biofuels production is concentrated in the United States, Bra zil, and the European Union (Figure 2 4) In the case of bioethanol production, the United States and Brazil are t he world leaders, produc ing mostly bioethanol from corn (United States) and sugar cane (Brazil) (Fontes, 2010) However, t he biofuels production in EU is mainly dominated by biodiesel produced from rapeseed. Other major producers of biofuels, especially of bioethanol include China and India. There are also huge opportunities for other countries, situated in Africa and Asia to become the major biofuels producers and exporters. One example are the South East Asian countries. These countries are large scale pa lm oil producers, and have the opportunity to develop competitive a biodiesel production. One of the most important issues regarding biofuels production are biofuels mandates established for domestic biofuels use, in the form of pure fuel or blended with c onventional fuel. Many countries has different biofuels mandates, typically requiring 5 10% of ethanol in gasoline and 5 7% of biodiesel in diesel. In order to
24 satisfy these mandates, governments provide various support measures and incentives, often consi sting of special loan and grant programs, tax credits, tax penalties on refineries and road tax exemptions. According to International Energy Agency (IEA), biofuels in 2050 may account for up to 27% of all transport fuels, compared to 2% of biofuels for t ransport in the world today. T he perspectives for global biofuels market will depend on a several factors, including the future oil price and avai lability of low cost feedstocks. It is also necessary to increase financial funding for research and populari ze biofuels production and improve the efficiency of conventional technologies. The IEA believes that the popularity of biofuels could increase considerably in the next 10 years, but in order to do so, their production should be based on the biofuels of th e second and third generation (Coyle, 2007) Figure 2 1. World primary energy demand by fuel in the Reference Scenario by 2030 (Edenhofer, Pichs Madruga, & Sokona, 2011)
25 Figure 2 2. Renewable energy share of global energy consumption (Edenhofer, Pichs Madruga, & Sokona, 2011) Figure 2 3. Global biofuels production between 2000 and 2007 (Coyle, 2007) Figure 2 4. Global biofuels production in 2007 (Coyle, 2007)
26 CHAPTER 3 THE BIOFUELS MARKET IN THE UNITED STATES The United States is the largest consumer of oil in the world, and therefore the fastest growth was observed in the biofuel s sector in this countr y. In the United States consumption accounts for nearly 21 million barrels of oil per day, of which only 8.5 mi llion are produced in the U.S. I n order to reduce the country's dependence on imported oil one of the possible solutions are biofuels. Biofuels market in the United States is a very advanced market, and is the largest producer of biofuels in the world. The U.S. biofuels production indus try had total revenue of $19,984 .9 million in 2010, with a compound annual growth rate (CAGR) of 22.2% during 2006 2010. Industry production volumes went up with a CAGR of 23.3% during 2006 and 2010, to obtain 35,606.1 thousand tons in 2010 (Datamonitor, 2 011b) In the United States the most rapidly growing is the bioethanol market, based on the cor n production. The other type of biofuels is biodiesel produced mainly from soybean. However, compared to the ethanol industry, which accounted for 91% of biofuels capacity, the amount of b iodiesel production is marginal (Schnepf, 2010) The production of ethanol has risen from about 175 million gallons in 1980 to 10.7 billion gallons per year in 2009 (Figure 3 1) U.S. biodiesel production is much smaller th an its ethanol counterpart, but has also shown strong growth, rising from 0.5 million gallons in 1999 to a 776 million gallons in 2008 Despite this rapid growth, total biofuels production accounted for only about 4.3% of total U.S. transportation fuel con sumption in 2009 (Schnepf, 2010) Biofuels Policy in the United States The first incentives from the government for ethanol production originated around thirty years ago. The Energy Policy Act of 1978 introduced a 4 cent subsidy
27 per gallon of a mixture of gasoline and 10% ethanol known as E10, and a 40 cent per gallon subsidy for pure ethanol. Over time the subsidy level was differentiated. The ethanol subsidy offered by the federal government is a tax incentive called the Volumetric Ethanol Excise Tax Credit, which currently amounts to 45 cents for every gallon of pure ethanol blend with gasoline gallon. In the case of biodiesel, there is allowed a 1 dollar per gallon subsidy as a tax credit for biodiesel producers. In April 2011 U.S. Senate voted to eliminate bioethanol subsidies. It is estimated that the annual support for bioethanol production costs U.S. tax payers $6 billion. According to the U.S. Environmental Pro tection Agency (EPA) in the United States o ver 90% of U.S. gasoline contains up to 10% ethanol (E10) Ethanol is blended with gasoline in various amounts for use in vehicles. Low level blends, up to E10 (10% ethanol, 90% gasoline), are classified as "substantially similar" to gasoline by the, meaning they can be used legally in any gasoline powered vehicle. In seven states, including Minnesota, Missouri, Montana, Hawaii, Oregon, Washington and recently in Florida (since 2011) there exist mandatory ble nding law, requiring E10 usage, which is sold at the pump as a regular gasoline. Bioethanol, E85 (85% ethanol, 15% gasoline) is also used in the united States but can be used only in flexible fuel cars. Another, less popular type of fuel used in the United States is diesel The most popular blends are B2 (2% biodiesel, 98% diesel) and B5 (5% biodiesel, 95% diesel). There exist also higher biodiesel blends, such as B20 (20% biodiesel blends and 80% diesel fuel) and B100 (pure biodiesel). According to the En ergy Information Administration ( EIA ) i n the United Stat es the price of fuel, containing up to 10% bioethanol is as following: Pb87 (3.66$), PB89 ($3.80) and Pb93 (3.93$). However the price of bioethanol (E85) is cheaper, thus
28 only $3.20. In the case of th e price of diesel ($/gallon), is $3.94. However the price of biodiesel is as fol lowing: B20 ($3.60) and B100 ($3.8 5). In Florida the price of regular fuel (E10) is as following: Pb87 ($3.69), Pb89 ($3.85) and Pb93 ($3.96). However the price of E85 ($/gallo n) is cheaper and accounts for $3.26. In the case of the price of diesel ($/gallon), is $3.92. However the price of biodiesel is as following: B20 ($3.55) and B100 ($3.70). The first biofuels mandate in U.S. was established under the Energy Policy Act of 2005. It established the Renewable Fuel Standard (RFS), which set a minimum level on the quantity of biofuels used in the United States. Afterwards, t here was expansion of the original RFS by the Energy Independence and Security Act of 2007 (EISA). The ne w RFS established a requirement of 36 billion gallons of biofuels for road transportation by 2022, which possibly c ould account for 25% of all transport fuel sales by that year. Fifteen billion gallons will be contributed by conventional bio fuels like corn ethanol. Advanced biofuels will account for 21 billion gallons, including a cellulosic biofuel requirement of 16 billion gallons. Additionally, at least 1 billion gallons of these 21 advanced biofuels should be contributed by biomass based diesel (Joslin g, Blandford, & Earley, 2010) Currently, the crucial issue for biofuels development and production is the 50 billion investment for the next 10 years to boost private sector involvement, in order to provide clean energy future, with special attention to biofuels. The U.S. President additionally created the Biofuels Interagency Working Group to work with the U. S. Department of Agriculture (USDA), the Department of Energy (DOE) and the Environmental Protection Agency (EPA), on improving the biofuels market through
29 specific policies to expand production of flexible fuel vehicles, and assess aspects of greenhouse g as emissions, land u se and resource management. For DOE, the funds from the American Recovery and Reinvestment Act (ARRA) of 2009 ($786.5 million) are used to incentivize the biofuels industry. In case of USDA, the Farm Bill of 2008 provides two kinds of s upport. First, loan guarantees for commercial scale biorefineries were instituted in order to develop and construct advanced biofuels biorefineries, and second, grants for demonstration scale biorefineries to produce advanced biofuels were established (Cu rtis, 2010). An Overview of Biofuels in the United States Corn ethanol is the most widely used liquid biofuel in the United States. The other commonly used biofuel in the United States is biodiesel, primarily produced from soybean oil. Currently in the Uni ted States there are 201 ethanol and 168 biod iesel facilities in production. There are also a number of facilities under construction. The main biorefineries are situated in the North Central region of the country, including Iowa, Nebraska, Illinois, Minne sota, S outh Dakota, Indiana, and Ohio. The nature of agriculture in the North Central region provides the be st opportunity for production, followed by the Southeast, Northwest, Northeast, and West (USDA, 2010) Production of Biofuels Bioethanol The ethanol production started in 1980 with 175 million gallons, and has r eached almost 13 billion gallons in 2010. The last 15 years brought incredibly high number of structural changes in the industry. In 1991 there were only 35 plants with the possibil ity of 865 million total gallons of ethanol production. Th e majority of these plants were wet mill plants with production capacity of 96 million gallons per year
30 (MGY). The second group of dry mill plants had an average production capacity of 16.5 MGY. No wadays there exist more than 200 plants with volume of almost 13.5 billion gallons. Seventy percent of capacity comes from dry mill plants with the trend toward dry mills using grain as a feedstock or so called second generation plants which produce ethano l from advanced biofuels feedstocks such as any form of cellulose (DOE, 2010) Cellulosic ethanol is ethanol produced using a variety of feedstocks such as chopped wood pellets, yard waste, or curn husks. There is a trend toward governmen t support of cellu losic ethanol sim ilar to that for corn ethanol (Stockwell, 2009) Along with increased production capacity, there have been changes in technologies which allo ws for the production of E85 ( an ethanol fuel blend of up to 85% ethanol fuel and gasoline ) With the introduction of E 85 pumps at fill ing stations, there became many advantages for the production and sale of flex fuel vehicles (FFVs) adjusted to use E85. In 2009 around 1,950 U.S. fueling stations were selling E85, and currently there are more than 7 m illion FFVs in operation which can use E85 g asoline Production of FFV began in the late 1990s. In 2004 there were only available 8 models of FFV on the market. Four years later production had increased to 28 models, mainly from GM, Chrysler, and Ford. In the case of foreign manufacturers, Nissan, Mercedes Benz, Toyota and Mitsubishi all produce at least one FFV model. In general, the ethanol industry has been the major biofuels industry over the last 25 years with the high potential for the future. It hav e been pred i cted that conventional corn based ethanol production will be the dominant biofuels source until 2015, with a significant increase in ce llulosic production after that (DOE, 2010)
31 Biodiesel The biodiesel industry is basically dominated by small plants from local supplies mostly derived from vegetable oils like soy, and palm oil. In 2008 and 2009 this industry experienced difficult times. Food prices increased, followed by decline of diesel prices which contributed to the dec rease of the industry operation with much l ower level of total production accounting for 2.7 billion gallons per year. In general, many factors influence the difficulty of production of biodiesel, including the cost and availability of vegetable oil and the relative cost of petroleum. Its disadvantages are also related to its rela tive ineffectiveness when cold and its limited time of storage. As a result of these negatives, there has been growing interest in algae based biodiesel as the alternative to vegetable oils (Curtis, 2010) Algae based biodiesel is in the center of attention nowadays due to high potential in terms of land efficiency and possibility to produce around 2,000 to 10,000 gallons per acre per year compared to other plant oil crops like jatropha (200 gallons per acre), soybean (48 gallons per acre), rapeseed (127 gallons per acre), and o il palm (636 gallons per acre). According to DOE estimates an area of 15,000 square miles could sustain enough algae ba sed fuel production to cover the current level of petrol eum consumption (Curtis, 2010). T his huge potential could d o a significant reduction in the demand for of land to produce other feedstocks for biofuels. If we were to replace all of the diesel that we use i n the United States with an algae derivative, we could do it on an half of one percent of the current farm land that we use now (Stockwell, 2009)
32 The Biofuels M arket in Florida The U.S. Department of Energy reports that Flo rida is consuming a 7.6 billio n gallons of gasoline per year and burns 8.36 billion gallons of blended fuel each year, mainly a 10% average ethanol mix. In 2009 the state spent about $20.2 billion on imports of gasoline and ethanol, mostly from Midwest, the Caribbean Basin and Brazil. According to the Florida Department of Revenue, only about 1.4 billion gallons of diesel are sold in the state annually, while Florida is sending around $3.2 billion dollar s for diesel outside the state (American Biofuels Now, 2010) Currently, there are no ethanol production facilities in Florida and t here is only one biodiesel production facility( Genuine Biofuel ). However, there are eight projected production facilities for ethanol and four biodiesel production facilities projects According to economic estimates for Florida, it has be en shown that in order for the s tate to be able to produce its own ethanol, there would need to be 19 plants built which in the long term would provide 627 full time jobs opportuni ties, followed by the 1,560 jobs through the local area, bringing in a minimum $1.3 billion into local economies every year. In the case of biodiesel, i gallons of diesel were to be blended with Florida biodiesel, about 70 million gallons would have to be produced, which could generate around $70 million and create 400 jobs (American Biofuels Now, 2010) Another advantage of Florida is related to Renewable Fuel Standard, mandates a 10% of ethanol blend which began Dec ember 31, 2010. That is, all gasoline that a terminal supplier, importer, blender, or wholesaler sells in Florida must contain 10% ethanol by volume. Florida hast about 600,000 flex fuel vehicl es with possibilities to refuel 44 E85 st ations across 34 citie s in the S tate.
33 Unfortunately, law does not address biodiesel, which provides a greater opportunity for the s tate. There is no doubt that Florida could improve its energy technologies investment tax credit and consider also other ways to boost the percent age of biodiesel coming from Florida producers. It should be noted that at the end of the 2012 the Cellulosic Ethanol Producer Tax Credit will expire, which has the potential to devastate the biofuels industry nationally. But this presents a huge opportuni ty for Florida, which could create its own sustainable market in biofuels in order to decrease dependence on other both in case of petroleum and in bio based products. By having it s own biofuels sector, sustainability issues could be satisfied, profits co uld improve and improving its environment (American Biofuels Now, 2010) Figure 3 1. Biofuels production in the United States between 1990 2008 (Global Climate Change, 2009)
34 CHAPTER 4 THE BIOFUELS MARKET IN POLAND Poland is a European country with great potential for the production of biomass and biofuels, but so far this potential has not been realized Having an area of 18.3 million ha devoted to agricultural production and 8.9 million ha of forest area, Poland presents biomass opportunities from agricultural residues, wood and wood wastes from forestry and industry, as well as energy crops grown specifically for biofuels (Frost & Sullivan, 2008) The Polish market is defined as the market in the early stages of development, with a large scope for increasing production capacities. The Polish biofuels production industry had total revenue of $447.2 million in 2010, with a compound annual growth rate (CAGR) of 30.2% during 2006 2010. Industry production volumes went up with a CAGR of 22% during 2006 and 2010, to obtain 468.9 thousand tons in 2010 (Datamonitor, 2011a) In Poland, there are two kinds of biofuels that are currently of economic importance: bioethanol that is blended with gasoline and biodiesel blended with diesel, or as a self contained biofuel. Currently, first generation biofuels are used in Poland as biocomponents to fuel vehicles produced from crude oil. These biofuels are produced mainly from edible p lants using conventional technology like fermentation (bioethanol) or transesterification (biodiesel). However it is expected that over the next few years second generation biofuels produced from non edible energy plants or residues will be introduced (Kup czyk, Rudnicki, & Borowski, 2011) The production of ethanol as a fuel for engines began in Poland in 1928. Pre war production was estimated at about 10 million liters / year. After the war, the production of ethanol was reintroduced and reached up to 80 m illion liters / year. During this time, gasoline blended with ethanol contained up to 20% ethanol. The
35 19 90s represented a time of an introduction of bioethanol to gasoline with a gradual grow th until 1997 (during this time a record volume of about 111 m illion liters was produced). B iodiesel was introduced to the Polish market much later, appear ing on an industrial scale between 2004 and 2005, when the production of biodiesel started in Trzebinia Refinery. This production was initially devoted for export, and in small quan tities for the domestic market (Kupczyk, Rudnicki, & Borowski, 2011) Biofuels Policy in Poland Biofuels and biocomponents are currently regulated in Poland by a pair of laws adopted on August 25 th 2006: the Biocomponents and Liquid Biofuels Act (Journal of Laws, 2007a) and the Fuel Quality Monitoring and Control Act (Journal of Laws, 2007b) The currently binding legal regulations allow for adding up to 5% of bioethanol additive to petrol and 5% o f fatty acid methyl esters (FAME) additive to diesel. The regulation adopted the princ iple that the share of bio components up to 5% by volume is recognized as a standard fuel, which does not have to be marked in a special way. Only when the share of biofue ls is larger than 5% does the fuel have to be identified differently, thus are recognized as biofuels. T he Regulation of the Minister for Economic Affairs of 8 September 2006 on quality requirements for liquid biofuels (Ministry for Economic Affairs, 2006) created the conditions for placing two types of biofuel s on the market such as fatty acid methyl esters used as direct fuel and diesel containing 20% of such esters. In Poland, there are currently debates on the legislative progress relating to the adjus tment of Pol ish law to the EU Directive. On the 12 of April, 2011, the Polish Council of Ministers adopted a regulation proposal amending the Fuel Quality Monitoring and Control Act of August 25th, 2006. This project permits the increase in
36 content in the traditional biofuels to 7% of biocomponents for diesel, which is only 2% more than currently producers are blending with diesel. However, this project does not introduce changes to permit the 10% bioethanol mixture in gasoline. This is because in Poland a lmost 45% of the vehicles are not adapted to E10 gasoline. Recently there was presented a pilot phase of l aunching the ethanol based E85 gasoline on the market in Poland. The new fuel is currently available only at the one gas station in Warsaw since the end of May 2011. In Poland flex fuel vehicles (FFVs) which are suitable for E85 are sold by Ford, Opel, Saab and Volvo. In the case of the Polish biofuels situation, E85 can become a success, especially for the Polish oil company giants like Orlen and Loto s. However, a spokesperson for Orlen identified important issues, first the demand has to be high enough that production is economically justified National Indicative Targets In January 2008 the National Indicativ e Target (NIT) was implemented. The NIT was defined as the minimal percentage share of biofuels and other renewable fuels in the total amount of liquid fuels and liquid biofuels consumed in transport during the calend ar year, calculated according to the calorific value was determined by the Regulation of the Council of Ministers of 15 June 2007 on National Indicative Targets for 2008 2013 (Council of Ministers, 2007) sets the following targets: 3.45% of energy in 2008, 4.60% in 2009, 5.75% in 2010, 6.20% in 2011, 6.65% in 2012 and 7.10% in 2013 (Ministry of Economic Affairs, 2009) The National Indicative Targets presented above reflects obligations stemming from on. In 2010 the target of 5.75% specified in Directive 2003/30/EC was achieved. It is assumed that the rate of increase of the N IT
37 up to 2020 will make it possible to reach 10% in 2020. F ailure to achieve the compulsory share of biocomponents in total fuel s by fuel companies introducing liquid fuels or liquid biofuels result in fines. Under current law, for every ton of bio NIT below the level of the year the company has to pay PLN 17 000. Another important biofuels policy document in Poland is the Long ter m Plan on the Promotion of Biofuels and Other Renewable Fuels of 24 July 2007, adopted by the Coun cil of Ministers for 2008 2014 (Ministry of Economic Affairs, 2007) This plan aimed to improve the cost effectiveness of the process as a whole, from the cul tivation of the agricultural raw materials through the production of biocomponents to the manufacture of liquid biofuels and liquid fuels blended with biocomponents, and ending with the use of the biofuels (Ministry of Economic Affairs, 2009) Fiscal poli cy Poland currently promotes the use of biocomponents by offering financial incentives through a system of tax exemptions and tax relief Preferential excise duty treatment, entered into force on 6 July 2007 (Journal of Laws No 99, item 666). Under this pr ovision the following fuels meeting the relevant quality requirements were exempt from excise duty until the end of April 2011: petrol PLN 1.565 on each litre of biocomponents added to it, diesel PLN 1.048 on each litre of biocomponents added to it ; The removal of the exemption from excise duty after April 2011 resulted in negative effects for biofuels industry. Be fore contributed to the situation where the greater allowance of biocomponents did not cause a significant increase in fuel prices. After the removal of the exemptio n from excise duty, Poland will be able to save about PLN1.5 billion per year, but the consequences will be mainly related to car drivers because of the more expensive gas oline It is estimated that the price of
38 1 liter of gasoline, which is already very expensive will increase by a few percent (Kupczyk, Rudnicki, & Borowski, 2011) According to the Agricultural Market Agency the price of regular fuel in Poland ($/gallon), is as following: Pb95 ($7.20) and Pb98 ($7.47). Howe ver the price of bioethanol (E85) is cheaper and accounts for $6.63. In the case of the price of diesel ($/gallon), is $6.94. However the price of biodiesel is as following: B20 ($5.72) and B100 ($5.87). Biofuels Policy in the European Union After the Poli sh accession to the European Union in May 2004, national trends in the development of biofuels have be en similar to trends in the EU, where policy is a ligned toward EU requirements. The biofuels sector in Poland is mainly driven by European incentives and directives aiming at considerably increasing biofuels production and use. Due to the low efficiency of existing EU actions on energy the European Council and European Parliament have recognized the need for a new European Energy Policy. In January 2007 t he European Commission put forward a proposal regarding climate change and energy supply issues, which was later agreed as a 20 all Member States 20% increase in energy efficie ncy, 20% r eduction in greenhouse gas emissions, 20% share of renewables in overall EU energy consumption by 2020 and 10% biofuel s component in vehicle fuel by 2020 (Josling, Blandford, & Earley, 2010) The strategic document for the development of the biof uel market in the on the promotion of the use of biofuels or other renewable fuels for transport (European
39 Commission, 2003) which was valid until the end of 2010. In order to achieve th e European renewable energy targets, the EU adopted another European Directive 2009/28/EC of 23 April 2009, setting requirements of a 20% share of renewable energy sources in energy consumption along with a of 10% minimum target for renewable fuels in tran sports by 2020 for each Member States (European Commission, 2009a) Furthermore, in order to facilitate a more widespread blending of biofuels into petrol and set ambitious sustainability criteria for biofuels another Directive on the specifications of fue ls and biofuels was adopted (European Commission, 2009b) This European Directive allows for a higher content of biocomponents in conventional fuels up to 7% for biodiesel and 10% for bioethanol, instead of the current 5% target (Kupczyk, Rudnicki, & Borow ski, 2011). An Overview of Biofuels in Poland The Agricultural Market Agency data shows that as of 13 September 2010, the register of manufacturers contained entries for 13 bioethanol producers, decla ring an annual production of 590 million liters of bioethanol and 19 methyl ester producers, declari ng an annual production of 772 million liters of ester (Ministry of Economic Affairs, 2009) In the first half of 2010 the domestic market included 556 thousand tons of biocomponen ts, including 115 thousand tons of bioethanol a nd 441 thousand tons of esters (Table 4 1). Compared to the corresponding period of 2009, the use of biocomponents increased by 167 thousand tons. The share of domestic production of bioethanol in the quantity marketed in the first half of 2010 increased compared to the same time in 2009 from 45% to 81%. In the case of esters there was a reduction of domestic s hare production from 61% to 40%.
40 Production of Biofuels Bioethanol An analysis of the data compiled b y the Central Statistical Office, the Ministry of Finance, the Energy Regulatory Office and the Energy Mar ket Agency on petrol consumption shows that in the first half of 2010 compared to same period in 2009, the reduction of the amount of gasoline markete d was recorded at 7% with an increase in the bioethanol consumption by 7% Biodiesel At the same time in the first half of 2010 the percentage share of b iocomponents in fuel consumption in transport increased by 5% in case of diesel and 56% of esters (Kupczyk, Rudnicki, & Borowski, 2011) Support for Agricultural P roduction The Common Agricultural Policy of the European Union provides a system of subsidies for agricultural production with intention for energy purposes. In the case of Poland, one of th e financial support instruments included aid for energy crops providing the raw materials for biocomponent production (Kupczyk, Rudnicki, & Borowski, 2011) This aid is provided by enabling farmers to receive European Union subsidies for t he cultivation of energy crops additional national payment for farmers who had been awarded payments for the cultivation of energy crops accounting for PLN 176 per 1 ha of rape seed cult ivation (Journal of Laws 2008 ). In general, the u tilization rate of 10% for biofuels by 2020 will be achievable only with development of the second generation biofuels. These biofuels are produced from biomass containing cellulose, such as grass, straw and forest waste. Because these ra w ma terials cannot be used as food, the biofuels production is not in conflict with this market. Around 2012, there will be second generation biofuels on
41 the market, and in 2020 the first generation biofuels will be maximally utilised, followed by decline and finally the rate of using the first and second generation of biofuels will be equal. One of the most important thing is that the European biomass energy resources required for the production of transport biofuels are largely situated on the Polish territor y. Table 4 1. Quantity of transport fuels and percentage share of biocomponents placed on t he market in the period 2000 20 10 (Kupczyk, Rudnicki, & Borowski, 2011) Year Petrol Diesel Bioethanol Esters Share in terms of calorific value 2000 4841 2343 40.6 0 0.35 2001 4484 2562 52.4 0 0.46 2002 4109 2940 65.3 0 0.57 2003 3941 3606 60.1 0 0.49 2004 4 011 4 303 38,3 0,0 0.29 2005 3 915 5 075 42,8 17,1 0.47 2006 4 048 6 042 84,3 44,9 0.92 2007 3 998 7 212 70,9 37,3 0.68 2008 4 110 10 066 185,6 473,4 3.62 2009 4 125 10 387 232,2 632,5 4,.61 I term 2009 2 026 4 781 107,4 282,1 4.43 I term 2010 1 884 5 016 114,9 441,3 6.25
42 CHAPTER 5 RESEARCH ABOUT CONSU MER PERCEPTION Consumer Behavior Aspects T he problem of consumer perception is the main issue of many scientific disciplines such as sociology, economics, law and social psychology Consumers are frequently making choices about certain issues, the consequences of which they may not be fully aware. I t is not only related to a lack of information, but even more it is about issues of quality and type of information. Consumers often think that they have knowledge about biofuels, but in reality, they have incorrect information. There exist a lot of inform ation about economic, environmental and technical issues about biofuels, however many times people are lacking information about sociological aspects of biofuels. There has been very limited sociological research made so far regarding perception of biofuel s because it is still in the emerging side of its development (Thompson, 2007). That is why this chapter will focus to examine a few previous research regarding the perception towards biofuels in terms of specific characteristics (Diamantopoulos, Schlegelm ilch, & Sinkovics, 2003). Overview of the Previous Reports about Consumer Perception towards Biofuels Associations between consumer behavior toward biofuels and specific variables characteristics consciousness measures are relatively complex (Diamantopoulos, Schlegelmilch, & Sinkovics, 2003) There have been only a limited studies done, which have summarized associations between consumer perception s toward biofuels and specific groups of key variables like demographics, knowledge, fuel econom y and fuel efficiency, environmental issues including Perceived Consumer Effectiveness (PCE) scale, New Environmental Paradigm (NEP) scale and food versus fuel preference
43 Some of the research came from the United States, while some was from Poland. Sever al other s have conducted similar studies based on different countries such as the United States and Belgium. The sample population differs from research to research, showing various impact s Interestingly, research of Ulmer, Huhnke, & Bellmer ( 2004) was related to a mail survey on consumer perceptions and knowledge towa rds ethanol blended gasoline in the United States and was conducted in the F all 2002. This study set a s ample at 2400 registered voters in the State of Oklahoma. Furthermore another biofuels study was conducted under cooperation between University of Ghent (Belgium) and University of Arkansas (the United States) In both analyzed places there were surveyed 1 200 and 1 510 people, respecti vely, during November 2006 The first issue investigated consumer interest in fuel economy (Popp, Van Huylenbroeck, & Verbeke, 2009) while the second one measured (Skipper, Van Huylenbroeck, & Verbeke, 2009) The third study which focused on public perceptions of biofuels, was performed by researchers in the Department of Life Sciences Communication at the University of Wisconsin Madison in April 2009 (University of Wisconsin Madison, 2009) The reported results represented a subsample of 1,191 people surveyed online between November and December 2008. A further study by Delshad, Raymond, & Sawicki ( 2010) examined the public attitudes toward political and technological options for biofuels The research was conducted in Indiana among 34 focus groups, including 17 groups of students at the Purdue University and 17 groups of public between November 2008 and May 2009.
44 According to a nother research by Johnson, Halvorsen, & Solomen ( 2011) data w ere collected from among upper Midwestern U.S. consumers about their k nowledge, beliefs and consumption related to ethanol and climate changes. The survey was distributed via mail among 1500 residents in Michigan, Minnesota and Wisconsin during 2007 2008. The most recent study (Lane, 2011) was made by the Biofuels Digest Are Biofuels Moral or Immoral? The questio nnaire surveyed 2700 readers of newsletter The following reports examined the European perception towards biofuels with significant attention to Polish respondents. The interesting study titled (Eurobarometer, 2007) covered 27 Member States of the European U nion on a randomly selected sample of around 26,000 citizens on issues related to urban and public transport and environmental aspects, especially biofuels. The next investigated research The planned investments in renewable energy in 2009 2011" was com missioned by the Law Firm Rachelski and Partners in April 2009 (Polish Public Opinion Research Center 2009 a ) The survey was sampled among 77 companies from the renewable energy sector in Poland. Another study entitled "E n vironmental awareness in Poland sustainable (Polish Public Opinion Research Center, 2009 b ) The questionnaire was conducted in April 2009 in a sample of Polish people older than 18 years of age The total number o f completed interviews accounted for 1013. Furthermore, the Biotechnology European Commi for Research (Eurobarometer, 2010 a )
45 This survey measured the overall attitudes and awareness of E uropeans in the 27 EU Member States towards biotechnology, including biofuels. February 2010 and was based on representative samples from 32 European countries (27 Member States of the European Union plus Croatia, Iceland, Norway, Switzerland and Turkey) (Eurobarometer, 2010 b ) The recent (Inst itute for Sustainable Development, 2010) was conducted in November 2010 on a nationwide, representative sample of Polish people older than 18 years of age. In total 999 telephone interviews were completed In the following section an analysis of the resu lts of the above mentioned research will be presented. Analysis of Influencing F actors Demographic variables Many times classical and easily identifiable demographics are found to be significant in terms of indicating and pr oviding information targeted to specific market segments. These actions very often increase the possibility of communication effectiveness for future decisions and based on these characteristics it is possible to create specific messages to certain group s of individuals taking into ac count their specific needs and preferences. According to the study by Popp, Van Huylenbroeck, & Verbeke (2009) all demographic variables including gender, age and education do not show significant associations with fuel economy rankings. Therefore, provi ding information to specific demographic segments on the basis of age, gender or education showed that they were not effective from the basis of the results in this research.
46 Similarly in terms of the second study Skipper, Van Huylenbroeck, & Verbeke, (20 09) almost all described demographic v ariables like gender, education and income were not impacting the tradeoff between food versus fuel prices The only exception was age, showing that older respondents pay more attention on lower food pric es than lower fuel prices. When investigated demographics in the research of Johnson, Halvorsen, & Solomen ( 2011) only gender and income were statistically significant asking about different feedstocks and consumer willingness to pay for cellulosic ethanol. On the other side, whether a respondent was coming from urban versus rural area was not significant. The study by Delshad, Raymond, & Sawick i ( 2010) considering c onsumer attitudes towards improvement of biofuels technologies and p olicy changes, showed that the older and wealthier respondents were, the more contradictory opinions they present than average U.S. resident. Another study of Ulmer, Huhnke, & Bellmer ( 200 4) w hen asked people how their vehicle would perform if they switched to ethanol blended gasoline, there was indicated highly positive significant relationship with income and gender. Regarding Eurobarometer studies (Eurobarometer, 2010) t he key finding s of this survey show that majority of respondents (72%) feel tha t biofuels should be encouraged In case of Po land 80% of respondents were in favor of biofuels. Europeans who live in rural areas (74%) tend more often to feel that biofuels should be encour aged than those who live in large towns (68%). Those aged 15 to 24 are more supportive (76%) than those aged 55 and over (63%).
47 Knowledge, fuel economy and fuel efficiency Taking into account the increasing amount of biofuels production and specific on going public policy activities on biofuels, little research has been done so far on the public knowledge about biofuels. In order to determine personal knowledge about biofuels in the study of Ulmer, Huhnke, & Bellmer ( 2004) when people were asked about f uture purchasing decisions, more than half of respondents (63 20%) pointed towards buying ethanol blended gasoline. Analyzing another study by Po pp, Van Huylenbroeck, & Verbeke ( 2009) 90.30% of respondents in the United States and 87 80% in Belgium presented a general tendency of positively ranking the fuel economy when buy ing a new car. Thus, when choosing a new car, respondents placed a high importance on whether the car engine type takes a low priced fuel In relation to another study by Skipper, Van Huylenbroeck, & Verbeke ( 2009) i n impact on the preference for lower food versus fuel prices. It was significant, however it also shows a reverse relationship between hi gher fuel consumption and favoring lower fuel prices rather than lower food prices. The next national survey measuring public perceptions of biofuels (University of Wisconsin Madison, 2009) revealed that 67% of people were interested in learning more abou t biofuels. According to Hernando Rojas, the co investigator for t he study, these findings indicate people are really interested in this issue Regarding the study by Delshad, Raymond, & Sawicki ( 2010) t he majority of respondents (92%) had heard about biofuels. In general when people were asked to chose current policy, respondents were unable to distinguish which policy was actual or not.
48 In terms of the European stud y on e n vironmental awareness (Institute for Sustainable Development, 2010) h alf of the respondents admitted that they are well informed on this subject, although only 10% declared that they definitely well assess the level of their knowledge. The remaining respondents (46%) answered that they are not knowledgeable in this topic, of which almost one third said that they definitely do not feel well informed. Environmental issues According to the study of public perceptions of biofuels (University of Wisconsin Madison, 2009) 53% of respondents believed that biofuels can have positive impact s on climate change by reducing greenhouse gas emissions. In the study of Ulmer, Huhnke, & Bellmer ( 2004) majority of respondents (57 7%) tended to say that ethanol is better for the environment than current gasoline. When questioning about the eff ect of gasoline on air quality, the majority (82 80%) responded that pure gasoline has a negative influence on the environment, so biofuels might be a good solution for current fuel alternative s Regarding the research on t he planned investments in renewa ble energy in Poland (Polish Public Opinion Research Center 2009 a ) m ost Polish people positively support initiatives leading to an increase use of renewable energy sources The m ajority of Polish respondents (57%) strongly believe that the use of renewab le energy protects the environment against climate changes. Another Polish study (Institute for Sustainable Development, 2010) revealed that the most environmentally friendly energy source is wind energy, followed by water energy, solar power, and geother mal power As the least environmentally friendly energy Polish people considered energy using biofuels, which shows the lack use
49 Perceived Consumer Effectiveness (PCE) Nowadays more and more people are inform ed about the environmental problems, however there are still a lot consumers who do not show their environmental friendly behavior. One of the reasons can be related to the lack of t he media makes great effort to inform people on environmental consequences T his importance of belief in the role of consumer actions is getting more and more important. Therefore PCE should be the center of the attention in terms of the role of individuals and their consumption. PCE was first analyzed by Kinnear, Taylor and Ahmed in 1974, as the behavior of a person is the function of his/her conviction that the occurrence or stopping of an event depends on his/her activity (Thompson, 2007) Considering the study conducted in the United States in 2003, 64% of the respondents felt that they can contribute to a better wor ld by buying environmentally friendly products. On the other hand, 17% showed lack of trust in the effectiven ess of their own actions at all According to Po pp, Van Huylenbroeck, & Verbeke ( 2009) the belief that one has the ability to infl uence environment increased, the importance of fuel economy also increased. Therefore both consumers in the United States and Belgium, who felt strongly about their own ability to impact the environment, placed high importance on fuel economy New Environ mental Paradigm (NEP) Understanding the environmental paradigm and the adoption of pro e nvironmental beliefs is a critical issue in this century. Environmental paradigms were
50 studied in environmental sociology and also in environmental psychology creating a the natural world. There were several scales established in order to identify patterns within certain paradigms. One example by Dunlap and Van Liere (1978) was a New Environmental relationship with it. S ince its development, the scale has become a widely used measure of pro environmental orientation (Dunlap, Van Liere, & Mertig, 2000) It has been used m ost often with samples of the general public, but it has also been used with samples of specific sectors such as farmers and members of interest groups. Additionally, it has recently helped to compare the environmental orientations of college students in s everal Latin American nations and Spain with those of American students. In general, these studies have found a relatively strong support of NEP bel iefs across the various samples ( for a review see Putnam, ( 2006) ) Taking into account another research by Skipper, Van Huylenbroeck, & Verbek e ( 2009 ), b oth respondents from the United States and Belgium with high NEP scores recognize that the development of renewable fuels are strictly linked with the higher cost of food prices. One of the example s is related with the fact that corn conversion to ethanol was not in favor of both respondents. Food versus Fuel Preference According to the research of Skipper, Van Huylenbro eck, & Verbeke ( 2009) t here was a general preference of lower food prices v ersu s lower fuel prices, both in the United States (67 6%) and Belgium (79 8%). This trend revealed that government support for the first generation biofuels was negati vely perceived by the citizens.
51 The other results from the study by Johnson, Halvorsen, & So lomen ( 2011) indicated that there can be only small differences in terms of choosing cellulosic ethanol from different feedstock. These differences can be related to the fact that some consumers may be more adverse to purchasing cellulosic ethanol from far m or f orestry residues than solid waste, since some residues need to remain in the soil. In general, as Delshad, Raymond, & Sawicki ( 2010) indicated people were more interested in higher development of second generation biofuels. The majority of respondents w ere driven by economic impacts like higher food prices and worries about environmental benefits. There were also some mixed opinions about advantages and disadvantages of the first generation biofuels, particularly corn based biofuels at the UW Madison (U niversity of Wisconsin Madison, 2009) Almost half of respondents believed that this type of production create s pressure on t he food supply, and local water supplies. In Florida, when asked about morality versus immoral ity of biofuels (Lane, 2011) in case it depends entirely on the feedstock A m ajority of concerns were related to specific cases like crops for food or feed. A nother European research study on life sciences and biotechnology (Eurobarometer, 2010 b ) presented the positive overall feelings towards all kinds of biofuels. Almost th ree fourth of Europeans supported crop based biofuels. However, Europeans were even more optimistic about the second generation biofuels, and 83% approve d the use of sustainable biofuels made from non edible material. In case of Poland, 87% supported first generation biofuels and 93% sustainable biofuels.
52 Biofuels perspectives Regarding the Ulmer, Huhnke, & Bellmer ( 2004) U.S. respondents perceived biofuels as a factor of decreasing dependence in foreign oil and an essential benefit to society. The majority of U.S. respondents believed that ethanol would positively impact their home state economy In the UW Madison study (U niversity of Wisconsin Madison, 2009) of public perception toward biofuels, a majority of respondents perceive biofuels positively, showing 66% in agreement that biofuels can help their country to reduce their reliance on foreign oil. When Delshad, Raymon d, & Sawicki ( 2010) examined the public attitudes toward political options for biofuels, higher attention was paid to alternative fuels standards rather than support represented by fixed subsidies and cap and trade policies. In general there was little su pport given to biofuels, however there was presented a positive attitude towards second generation biofuels. In ca se of the European perspectives (Eurobarometer, 2007) 36% of EU citizens believed that the best method to encourage the use of biofuels is t o make it cheaper via tax incentives. In every Member States less than 25% of the population considered crop subsidies for biofuels production as the best method to encourage the use of biofuels. In case of Poland 20% of respondents indicated positive attitude for this option. In terms of tax incentives to produce biofuels cheaper, 45% of Polish respondents agreed with this option. The most recent European study (Polish Public Opinion Research Center, 2009 b ) revealed that Polish government should take a strategic decisions about directions of development of domestic energy. On the one hand, government should take into account the needs and financial capacity of the emissions
53 CHAPTER 6 SURVEY METHODOLOGY A survey was designed to test the objectives of this study. The aim of this study was to gain information on consumer perceptions of the biofuels in the United States and Poland. Respondents of t he survey were asked to answer a series of questions about the knowledge, attitudes and perceptions related to biofuels Issues related to biofuels and environmental, societal and economic problems were c overed. Sampling D escription To collect data in both the United States and Poland, an e mail survey (Appendix A) was administered to students at the University of Florida (UF) in Gainesville United States and at Warsaw University of Life Sciences (WULS), Poland The survey was created and hosted using Qualtrics research software. The s urvey was administered in both countries during April 2011. At UF, the questionnaire was sent to four groups using a convenience sampling Selling Strategically he class, 91 successful ly completed the survey Comparative World Agriculture 68 completed the survey. The third Te chnical Writing of 100 students of which 72 completed the survey. The final group consisted of graduate students from the Food and Resource Economics Department. Of 76 graduate students, 15 completed the survey. In total, 315 respondents starte d the survey, however only 241 successfully completed the survey. Thirty seven respondents started, but did not complete the survey, and an additional 37 did not complete a validation question correctly. The validation question asks respondents to enter a specific answer to a specific question to ensure they are properly reading the
54 questions before answering. This item asked to selec t "Have Never Heard of" for the question about preferences of the type of engine. In Poland the survey was distributed among students from different faculties at the Warsaw University of Life Sciences using a convenience sampling method. The number of respondents who started the survey was 315. However only 150 students fully completed the ques tionnaire. Ninety four respondents started, but did not complete the survey, and an additional 71 did not complete a validation question correctly. In total, there were 391 successfully completed surveys from both universities (A ppendix B). Description of M easurements The questionnaire was divided into 5 sections covering: knowledge about biofuels; environmental aspects about biofuels; behavioural intention and behavior, perspectives of biofuels and information sources; and demographic characteristics. Fi rst, respondents were allowed to indicate their level of subjective knowledge of biofuels based on a five biofuels were measured on a five poi nt Third, students objective knowledge of biofuels was measured on a five point raw materials converted to biofuels. Fourth, students perception of biofuels characteristics, wa measured on a five biofuels included 10 items.
55 Fifth, in the case of the perception of availability of b iofuels, it was measured on a five Sixth, respondents were asked to compare bi ofuels to traditional fuels on a five Seventh, 4 items rel ated to level of agreement on the impact of biofuels on specific environmental issues were measured on a five point scale ranging from Eight, to investigate how individuals felt their behavior impacts pollution, the Perceived Consumer Effectiveness (PCE) scale was used. This five point frequency questions, quest ions are summed (after the two negative questions are reverse coded). Ninth, perception towards the environment was measured using the New Environmental Paradigm (NEP) scale. This 10 item scale examines the relationship between humans and nature. In this scale, half of the questions are scaled 1=strongly disagree to 5=strongly agree, while the other half are scaled the reverse way: 1=strongly agree to 5=strongly disagre e. The total scale score is found by summing the ten questions, and can range from 10 to 50 with higher scores reflecting Tenth, perceptions of the influence of biofuels on food production and prices were m easured on a five Eleventh, respondents were asked to indicate if they own a car (yes/no). For participants that did not own a car, they were asked to answer the remainder of the questions as if they owned a car.
56 Twelfth, preferences related to the type of brand of fuel we re indicated: Shell, BP, Chevron, Orlen. Furthermore, preferences related to kind of fuels were identified: gasoline, diesel, gasoline ethanol blend, diesel biodiesel blend. Thirteenth, frequency of purchasing biofuels was measured on a five point scale r Fourteenth, the availability of biofuels for refueling current ca r was measured on a five Fifteenth, students were asked about the price of biofuels in comparis on to traditional fuels on a five Sixteenth, amount of money spend on fuel in a typical month was indicated, followed by the proportion of monthly income spent for fuel, which was measured on a scale ranging from 0 5%, 6 10%, 11 15%, 16 20%, 21 25%. Seventeenth, students were asked to identify how many miles (miles/ week) they drive during an average week, followed by indication of the fuel efficiency (milles/gallon) of their car. Eighteenth, students preferences about car characteristics, were measured on a five c haracteristics included 13 items. Furthermore, preferences for the engine type for future cars were measured on a four next car purchase was measured on a five hese characteristics included 9 items.
57 Nineteenth, students were asked about biofuels production as a pathway towards economic development, which was measured on a five point scale ranging Twenty, the importa nce of characteristics related to the increase of biofuels share in the fuel market was measured on a five Twenty one, students were asked about their t houghts about government involvement in the biofuels i ndustry, which was measured on a five point scale Twenty two, 4 items related to level of agreement on decisions about biofuels ov er next years were measured on a five Twenty three, s tudents were asked where they obtain information about biofuels. For each source of information students indicated: no information, a little bit i nformati on, much information or most information. These included 7 items. Demographic s The majority of U.S. students (60.0%) were connected to the College of Agricultural and Life Sciences (Figure 6 1). The second biggest group was students from the College of Bu siness Administration (16.3%), and the third largest was from the College of Engineering (14.2%). The remainder of the students (6.7%) were from the Liberal Arts and Sciences College, with a few each from other colleges including Journalism and Communicati on, Design, Construction and Planning, Education, Health and Human Performance, and the Pharmacy College. The majority of Polish students (52.0 %) were from the Faculty of Agriculture and Biology, followed by the Faculty of Pr oduction Engineering (26.7 %), and
58 Interfaculty Study of Regiona l Planning and Management (13.3 %) (Figure 6 2) The rest of the students (8.0 %) were from the Faculty of Forestry, Faculty of Economic Sciences, Interfaculty Study of Environmental Protection and Faculty of Civil and Enviro nmental Engineering. Respondents in the United States were at various stages in college, with the majority (46.5%) classified as seniors, followed by juniors (32.4%), freshman and sophomores (14.9%), and graduate students (6.2%) (Figure 6 3). In Poland, t he majority of students (66.7%) were in their first or second year of the graduate master program and the remainder of respondents (33.3 %) were classified as bachelor/engineer students representing one of three stages of undergraduate programs (Figure 6 4) None of the respondents was PhD students. The largest group of U.S. students was undergraduate respondents (93.7 %), whi le in Poland the majority (66.7 %) were graduate students. The majority of U.S. students were males (58.2%). Though students did range in age from 19 43, the majority were born between 1987 and 1991. In Poland, more females (56.7 %) participated in the survey Again, though there was a range of ages ( 21 33 ) the majority were born between 1985 and 1990. Data A nalysis In this section, analytical techniques were presented for analyzing data. Descriptive analysis The consumer data were analyz ed using the statistical software SPSS (version 17 .0 ) Descriptive statistics are used to describe the basic information and characteristics of data, and to present a simple summary about the responses in the survey. Moreover the graphic representation of questions may help form the framework for further quantitative data analysis.
59 Factor analysis Factor analysis is a mathematical tool which can be us ed to examine a wide range of data sets (Hair, Black, & Babin, 2006) Factor analysis refers to a collection of statistical methods for reducing correlational data into a smaller number of dimensions or factors. Factor analysis finds rela tionships where va riables are maximally correlated with one another and minimally correlated with other variables, and then groups the variables accordingly. The most common type of factor analysis is Principal Component Analysis (PCA ), which is used for the data reduction. Reliability test Reliability is synonymous with the consistency of a test, survey, observation, or other measuring device. A reliability coefficient is often the statistic of choice in determining the reliability of a test. T here are several differe nt ways to estimate reliability, including test retest reliability, inter rater reliability, parallel forms reliability and internal consistency reliability. The most common form of internal consistency coefficie nt which is an estimate of the degree to which items on the scale form a homogenous measure (Peterson, 1994) The generally agreed threshold value for a satisfactory scale is 0.7 (Robinson, Shaver, & Wrightsman, 1991) which denotes that the different item s measure one single construct and therefore may be aggregated for further analyses. Results Knowledge about B iofuels The first part of the survey asked specif ic questions about knowledge toward biofuels. The initial question allowed respondents to indicate their level of subjective level of knowledge. A person with high subjective knowledge believes they know a lot about the subject, regardless of their actual leve l of knowledge. The majority of the
60 students from the United States stated that they are not knowledgeable or have low knowledge about biofuels (70.1%) (Figure 6 5). Just over one fifth (22.4 %) of the respondents felt they had an average l evel on knowledge and only 7.4 % felt they were knowledgeable about biofuels. Similarly, the m ajority of Polish students indicated that they are not knowledgeable or have low knowledge about biofuels (60.0 %) (Figure 6 6) Almost one third of respondents (32.7 %) felt they h ad an ave rage knowledge, followed by 7.3 % felt they were knowledgeable about biofuels. These outcomes show that both U.S. and Polish students do not believe they have a strong level of knowledge about biofuels (7.5 % and 7.3%). Respondents were asked to i ndicate whether they felt positively or negatively towards biofuels. Many U.S. students (47.7 %) have positive or very positive feelings towards biofuels. Another 46 .0 % indicated a neutral feeling. In contrast, only 5.8 % indicated they felt very negative or negative towards biofuels (Figure 6 7). Results from the Polish survey differed, with t he biggest group of Polish students (70.7 %) indicating they have positive feelings towards biofuels (Figure 6 8) Above one fifth (22.0 %) had neutral opinion and 7.3 % f elt negative towards biofuels. Though Polish students indicate d more positive feelings towards biofuels than U.S. students (70. 7% and 47.7 % respectively ) the negat ive attitudes were similar (7.3% and 5.8 %). To determine how much each U.S. student knew a bout biofuels, a question was presented with different raw materials that can be converted to biofuels. Students were then asked to identify which raw materials could be used to make biofuels. The highest number of respondents agreed or strongly agreed (79 .4 %) that crops grown for animal feed can be converted into biofuels, followed by crops grown for energy (70.5 %) and crops grown primarily for food (63.1 %) (Figure 6 9 ). In total, 74.3 % of the students correctly answered all the raw material questions whe re 25.7 %
61 answered all questions incorrectly. When Polish students were asked to recognize which raw materials could be used to make biofuels, the majority of respondents strongly agreed or agreed (87.8 %) that crops grown for energy can be converted into bi ofuels, followed by animal waste (58.4%) and residues (57.0 %) (Figure 6 10). Overall, 65.5 % of the students correctly answered all the raw material questions, where 34.5 % answered all questions incorrectly. Though there were minor differences in which crops they knew could be converted, overall levels of objective knowledge were similar, with over 65% of students answering all questions correctly. Next, participants were asked about their perception on biofu els characteristics through a series of 10 questions. The majority of U.S. respondents agreed or strongly agreed that biofuels are environmentally frie ndly (69.3%) (Table 6 1) In terms of safety, 67.2% believed in the positive impact of biofuels. On the o ther hand, the highest rate of disagreement and strong d isagreement was related to two issues. Students claimed that biofuels are not c heaper than regular fuels (34.9 %), and that biofuels would not l ead to lower maintenance costs for the vehicle compared t o regular fuel s (24.1 %). The majority of Polish students agreed or st rongly agreed with the two issues; that biofuels are environmentally friendly (75.3 %), and that biofuels are safe to use (64.0 %) (Table 6 2). In contrast, the highest number of students disagr eed or strongly disagreed (30.0 %) that biofuels a re cheaper than regular fuels and l ead to lower maintenance costs for the vehicle compared to regular fuel (26.0 %). Taking into account biofuels characteristics, there are a lot of similarities betwe en countries. Both U.S. and Polish respondents claimed that biofuels are environmentally friendly and safe. T hese results indicate positive perception tow ards
62 biofuels in both countries, however for all students there is a perception that biofuels are no t cheaper than regular fuels and do not lead to lower maintenance cost A factor analysis was run on the results from these ten questions, which resulted in the development of three factors. These included a quality factor, a cost factor and a factor meas uring trust in technology. perceptions of characteristics of environmental friendliness, biofuels safety, high quality fuel, high performance fuel, general quality standards and importance of not damaging the car. All items in this factor having factor loadings more than 0.60. The second factor was the cost factor, developed from questions about the overall and maintenance cost of biofuel in comparison to regular fuel. The factor loadings of the each item of this component were more than 0.80. The third factor, called trust in technology, was related to belief that biofuels are in the experimental stage of development and that biofuels can only be used in vehic les with modified engines. The factor loadings of this factor were mo re than 0.66. In terms of the availability of biofuels in Florida (higher blends than 10% of ry 2011) most respondents (46.1 %) felt these renewable fuels are sligh tly available, followed by 26.6 % of stude nts feeling that biofuels are not available at all in Florida (Figure 6 11). The highest num ber of Polish respondents (64.0 %) felt that biofuels are slightly available. More than one fourth of the students (26.0 %) felt than renewable fuels are mo derately a vailable and only 4.0 % of respondents indicated that biofuels are not available at all (Figure 6 12). To gather more information about consumer perceptions of biof uels, stu dents were asked to compare biofuels to traditional fossil fuels. The majority of UF respondents agreed and strongly agreed that biofuels are an alternative to traditional
63 fossil fuels (59.3 %) (Figure 6 13), and that biofuels can be a significant rep laceme nt for fossil fuels (59.8 %) (Figure 6 15). T he majority of Polish respondents also agreed that biofuels are an alternative to traditional fossil fuels (64.7 %) (Figure 6 14) and that biofuels can be a significant rep lacement for fossil fuels (66.0 %) (Figur e 6 16) Comparing these results, both U.S. and Polish students are indicating positively and very similar perception towards biofuels as an alternative to traditional fossil fuels They also similarly believe that biofuels can be a significant replacement for fo ssil fuels in the future. Environment al Aspects about Biofuels The next section of the questionnaire is assigned to perception about biofuels environmental issues was measured by a set of questions related to the impact of biofuels on specific environmental issues. In the United States there is a high level of agreement or strong agreement that biofuels have a positive impact on lowering carbon emissions (72.2 %), decreasing p ollutio n in the waterways (65.9 %), reduc ing global climate change (57.7 %) and using fewer chemica ls in biofuels production (52.7 %) (Figure 6 17). In Poland, the largest group of respondents agreed or strongly agreed that biofuels positively impact the environmen t by using fewer chemica ls in biofuels production (70.6 %), followed by decreasing p ollution in the waterways (66.7 %), lowering carbon emissions (60.7 %), and reducing g lobal climate change (54.0 %) (Figure 6 18). This outcome show s that both U.S. and Polish strongly believe that biofuels have positive im pact on the environment The results between both countries are very similar.
64 To investigate how individuals felt their behavior impacts pollution, the Perceived Consumer Effectiveness (PC E) scale was used (F igure 6 19) The average scale was 16. 16 out of 20 a relatively high score, indicating the U.S. students feel their behavior impacts the environment. C for the scale was 0.75, indicating the scale is reliable (Hair, Black, & Babin, 2006) In the case of Poland, the average PCE scale was 15.44 out 20, also presenting quite a high average score (Figure 6 20) It means that students felt they can impact positively the 0.63, showing the scale is reliable. Students perception towards the environment was measured using the New Environmental Paradigm (NEP) scale. The av erage scale for UF students was 34. 04 out of 50 (Table 6 3) T he C for this scale is 0.80, indicating a high level of reliability. Investigating Polish students perception towards the environment, the average scale of NEP was 33.71 out of 50 (Table 6 4) this scale is 0.68 indicating also a high level of reliability I n general, the results in both countries are similar with both U.S. and Polish students indicating a relatively strong support of NEP opinions about the food versus fuel debate two que stions were asked about their percept ion of the influence of biofuels on food production and prices In the Uni ted States fewer students (45.6 %) agreed that production of biofuels impacts food availability than those that believ ed it impacts food prices (65.6 %) (Figures 6 21 and 6 23). In P oland, a higher number of stu dents agreed that biofuels production impacts food pri ces (31.33%) than those that believed it inf luences food availability (20.9 %) (Figures 6 22 and 6 24). These low results in Poland indicate that students are not aware of li nkage between biofuels and agro food issues. Among U.S. stud ents this awareness is two times higher
65 Behavio u ral Intention and Behavio u r The next series of questions are about behavioural intention and behavio u r of students. Most U.S. students (85.9 %) i ndicated they own a car. For those that owned a car, there were 206 different vehicles types reported, ranging in age from 10 years old to new. In Poland, more than ha lf of the respondents (60.7 %) indicated they have a car. Those students reported 121 diff erent types of car, in a range age from 20 years old to new. To determine if students have strong preferences related to gasoline, they were asked to identify their favorite brand of gasoline. More than half of U.S. respondents (60.2 %) indicated they do no t have a preferred brand (Figure 6 25). For those that did, the companies they preferred included Shell (12.5%), BP (7.1 %) and Chevron (6.2%).In Poland, the most p referable brand was Orlen (37.8%), followed by BP (33.8%), Neste 24 (10.8%) and Shell (7.4 %) (Figure 6 26). The majority of UF students (78.0 %) prefer E10 (mandated since January 2011), including: regular gasolin e (87 octane), followed by 11.2 % preferring premium gasoline ( 93 octane), and plu s gasoline (89 octane) with 6.6 % of respondents. The re maining types of fuel include Diesel (D), Biodiesel (B20), Ethanol (E85) and Propane (LPG), an d together only account for 2.5 % of the students. When asked about preference of the gasoline in Poland, the majority of s tudents (41.6%) prefer regular gas oline (PB 95), followed by 26.1 % of respondents preferring ON (Diesel Stan dard), 11.4 % Autogas (LPG). Small number of respondents indicated preference for Ekodiesel, ON bio or BIO 100 (2.7 %). In general, in Florida the most common type of fuel is E10 In Poland, the most popular t ype of fuel is gasoline, diesel and autogas
66 A large number of UF students (39.0 %) report neve r buying or rarely buying (22.8 %) high biofuels blends (Figure 6 27). More than one fifth of the stud ents (20.8 %) were not aware if th ey are purch asing biofuels or not. Only 6.6 % stated that they buy higher blends of biofuels quite often or very often. The ma jority of Polish students (75.3 %) report never buyi ng or almost never buying (12.7 %) biofuels (Figure 6 28) Only 7.3 % of responden ts were not aware if they purchas e biofuels and just 1.3 % answered that they buy biofuels often or very often. U.S. students seem unaware of the availability of biofuels for refueling their current car. Nearly half ( 48.3 %) thought biofuels were not availa ble for their engine at all, while another third thought they wer e only slightly available (32.1 %) (Figure 6 29). Similarly, Polish students believed that biofuels are slightly a vailable for their engine (46.9 %), however over t han one fifth of students (21 .5 %) thought that biofuels were not ava ilable at all for their engine (Figure 6 30). When asked about the price of biofuels in compar ison to traditional fuels, 75.7 31). Almost one fifth of respondents (19.3 %) thought that price of b iofuels is too high Similarly, the ma jority of Polish students (73.3 %) had neutral opinion about price appropriateness (Figure 6 32). Almost one fourth of Polish students (24.7 %) indicated tha t the price is too high. The majority of U.S. and Polish respondents Taking into account resp indicated that they spent from $10 and $400, with the majority spen ding $50 70. Most people (36.7 %) spent between 6 10% of their monthly income on fuel (Figure 6 33). By contrast, only 8.4 % of UF students indicated they spent more than 20% of their monthly income on fuel.
67 In Poland students were asked to indicate their m onthly income in polish currency (PLN), which was later converted into dollars ($). Polish respondents spent from $10 and $420, with the biggest group spending $60 8 0. The majority of people (27.2 %) spent between 0 5% of their income on fuel (Figure 6 34). Only 10.8 % of students spent on fuel between 21 25% of their income. The majority of U.S. respondents indicated that they drive an average of 50 80 miles per week, with a range of 5 and 475 miles. They reported a fuel efficiency ranging from 10 70 miles p er gallon, with the average between 20 and 30 miles/gallon. Polish students reported that they drive between 50 and 90 miles per week, with a range of 20 and 310 miles. Their reported fuel efficiency ranged from 7 30 miles per gal lon, with the average betw een 10 and 15 miles/gallon. In order to reveal consumer preferences for vehicle and fuel characteristics, a series of questions were asked about the importance of different characteristics a car offers. The most important factor for U.S. students was the price of the car (95.4 %), fo llowed by fuel efficiency (91.7%) and safety (89.6 %) (Table 6 5). All characteristics received more than 70% of importance except issue regard (40.3%). Similar to U.S. students, in terms of car character istics in Poland, the majority answered that the most important factor was the price of the car (96.6 %), fo llowed by fuel efficiency (93.3 %), and safety (91.3 %) (Table 6 6). The highest rate of lack of importance was associated with Students were also asked their preference for the engine type for future cars. The majority of U.S. students preferred a gasoline powered engine (87 .1%), followed by hybrid (82.8 %) (Table 6 7). On the other side, the highest rate of lack of interest was as sociated with the diesel powered engine (39 .8%) and electric engine (35.3 %). In addit ion many U.S. students have never hea rd of flex fueled engines (14.2 %).
68 In Poland, the majority of respondents preferre d a diesel powered engine (82.4 %), followed b y gas oline powered engine (72.5 %) (Table 6 8). By contrast, the lowest interest was associated with the electric engine (49.3%) and hybrid (23.9 %). Additionally, 14.18% of Polish students have never heard of flex fueled engines. When asked about the importance of fuel characteristics for the next car purchase, th e majority of UF students (87.2 %) indicate the most important issue is the price of fuel, foll owed b y quality assurance (85.5%), top performance (82.2 %) ava ilability at gas stations (73.4 %), and e nviro nmental friendliness (68.9 %) (Figure 6 35). The least important characteristics were related to domestic fuel production (38.6 %) and odor characteristics (15.4 %). Results for Polish students differed slightly. Like the UF students, price was the most impor tant issue (88.8 %). Rankings after the top differed sligh tly, with top performance (81.9 %), engine modification requirements (8 0.0%), quality assurance (77.6 %), availabil ity at gas stations (76.1 %), and e nvironmental friendliness (50.2 %) all rated as impor tant by the majority of respondents (Figure 6 36). Similar to UF students, the two least important factors wer e the odor characteristic (33.1 %) and domestic fuel produ ction (16.1 %). Biofuels P erspectives and Information Sources The last section of the survey was about biofuels persp ectives and information sources. In the United States, the high est number of respon dents (68.9 %) agreed that biofuels can lead to economic development (Figu re 6 37). In Poland, many stu dents (46.7 %) also agreed that b iofuels can lead to eco nomic development (Figure 6 38) Though many students thought that biofuels can lead to economic development in their countries there was a large difference between those who agreed and those who felt neutral between the countries
69 In respo nse to the question about the importance of characteristics related to the adoption of biofuels in the fuel mar ket, the majority of U.S. stu dents indicated that the most important issue is technological development (83.8 %), fol lowed by social awar eness (80.1 %) and intensive promotion (73.0 %) (Figure 6 39). Similarly, students from Poland had technological development as the most important factor (88.0 %), social awareness (86.7 %), and intensive promotion (82.7 %) (Figure 6 40) In order to determi about government involvement in the biofuels industry, m any (70.5 %) U.S. respondents believed that government subsidies impact production and use of biofuels (Figure 6 41). In terms of the government as a controlling function for biofu els pro duction, most respondents (40.3 %) had a neutral opinion (Fig ure 6 43). When investigated Polish students percep tion, the majority (76.7 %) of respondents also believed that government subsidies impact product ion of biofuels, with only 17.3 % of stude nts having a neutral opinion (Figure 6 42). Taking into account the government as a controlling function for biofuels production, almost the same number of peop le agreed with this issue (36.0 %) and had neutral opinion (38.0%) (Figure 6 44) In general, bot h U.S. and Polish students strongly believed that government sub sidies impact production of biofuels. A large number of U.S. and P olish students thought that biofuels should not be controlled by the government When asked about the future of biofuels 76.8 % of U.S. students disagreed that biofuels will affect only the current generation (Figure 6 45). There was a high level of agreement that biofuels will strongly inf luence future generations (68.1 %). The ma jority of Polish students (61.3 %) also disagre ed that biofuels will affect only the current generation (Fig ure 6 46). More than half (52.0 %) indicated strong agreement that biofuels will influenc e future generation.
70 The last issue in this section investigated sources of biofuels information. The majo r ity of UF students did use informati on provided by government (90.5%), fuel sector (89.6%) or television and radio (81.3 %) (Figure 6 47). The most used source of information was the inte rnet (50.2 %) and un iversities and scientists (41.9 %).Most of the Poli s h students also did not use information from government and fuel se ctor (both at the level of 76.7 %) (Figure 6 48). As with the UF students, the most used source of inf ormation was the internet (67.3 %) and un iversities and scientists(52.0 %). At the end the questionnaire, respondents were given the opportunity to comment or remark on the topic. The following paragraph summarizes the thoughts of U.S. participants. Many students indicated they were glad to take part in this survey and wrote that it was an inte resting and relevant issue. Some respondents presented an extremely positive opinion about this research as being fascinating and great topic for further investigation. A few people had little information regarding biofuels and indicated the questionnaire prompted them to want to search for more information. Additionally a few students had a desire to focus their career on biofuels after graduating. In addition to the positive remarks, there were some critical views about the food versus fuel debate and gov ernment involvement in the biofuels. The final thoughts of Polish students indicated that the questionnaire was designed in a very clear and understandable way. A few people stated that the questions were really concrete, well considered and the responses were adequately developed. A lot of respondents wrote that it was a very interesting survey. Some people revealed their field of interest regarding specific type of engine cars, for example electric cars. Others presented positive opinions about biofuels, indicating that this research should be dedicated not only to students but also to other segments of population. In general, people were glad to participate in this survey.
71 Figure 6 1. University of Florida respondents, divided by College. Figure 6 2. Warsaw University of Life Sciences respondents, divided by College. Figure 6 3. Standing of the respondents at the University of Florida Agricultural and Life Sciences, 60 00% Business Administratio n, 16 25% Engineering, 14 17% Liberal Arts and Sciences, 6 67% Other, 2 91% Agriculture and Biology 52,00% Production Engineering 2 6.67 % Regional Planning and Management 13 .33 % Other 8 .00 %
72 Figure 6 4. Standing of the respondents at the Warsaw University of Life Sciences Figure 6 5. Level of knowledge about biofuels among student at the University of Florida Figure 6 6. Level of knowledge about biofuels among student at WULS
73 Figure 6 feelings about biofuels Figure 6 Figure 6 9. U.S. student knowledge of raw materials that can be converted to biofuels.
74 Figure 6 10. Polish student knowledge of raw materials that can be converted to biofuels. Figure 6 11. UF student belief in a vailability of biofuels in Florida Figure 6 12. WULS student belief in a vailability of biofuels in Florida
75 Figure 6 13. UF student belief of t he sustainable alternative of biofuels compared to traditional fossil fuels Figure 6 14. WULS student belief of t he sustainable alternative of biofuels compared to traditional fossil fuels Figure 6 fossil fuels replacement by biofuels
76 Figure 6 fossil fuels replacement by biofuels Figure 6 mpact of biofuels on the environmental issues Figure 6 mpact of biofuels on the environmental issues
77 Figure 6 19. Perceived Consumer Effectiveness (PCE) scale in the United States. Figure 6 20. Perceived Consumer Effectiveness (PCE) scale in Poland. Figure 6 nflu ence on agricultural production.
78 Figure 6 nflu ence on agricultural production. Figure 6 23. Influence of biofuels production on the food price in the United States Figure 6 24. Influence of biofuels production on the food price in Poland
79 Figure 6 25. P reference of gasoline brand by UF students. Figure 6 26. P reference of gasoline brand by WULS students. Figure 6 erception of biofuels use
80 Figure 6 erception of biofuels use Figure 6 29. Availability of biofuels for refueling current car Figure 6 30. Availability of biofuels for refueling current car
81 Figure 6 31. Level of appropriateness of biofuels price in the United States Figure 6 32. Level of appropriateness of biofuels price in Poland Figure 6 33. Proportion of monthly expenses spent on fuel by UF students.
82 Figure 6 34. Proportion of monthly expenses spent on fuel by WULS students. Figure 6 35. F uel characteristics for the future car in the United States Figure 6 36. F uel characteristics for the future car in Poland
83 Figure 6 biofuels leading to economic development in the United States. Figure 6 biofuels leading to economic development in Poland Figure 6 39. Importance of biofuels adoption in the fuel market perceive d by UF students.
84 Figure 6 40. Importance of biofuels adoption in the fuel market perceived by WULS students Figure 6 41. UF Student opinion about gover nment subsidies ls production Figure 6 42. WULS Student opinion about gover nment subsidies ls production
85 Figure 6 43. UF student views of government control over biofuels production Figure 6 44. WULS student views of government control over biofuels production Figure 6 45. UF student belief of biofuels decisions impacting future situation
86 Figure 6 46. WULS student belief of biofuels decisions impacting future situation Figure 6 47. U.S. student s ources of information about biofuels Figure 6 48. Polish student s ources of information about biofuels
87 Ta ble 6 1. UF student opinion with the characteristics of biofuels Question Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree Mean Are high quality fuels 1.66% 15.77% 45.64% 34.02% 2.90% 3.21 Are safe to use 0.00% 6.22% 26.56% 57.26% 9.96% 3.73 Are a high performance fuel 3.73% 29.88% 39.00% 24.07% 3.32% 2.93 Will not damage the car 1.66% 16.18% 44.81% 32.78% 4.56% 3.22 Are cheaper than regular fuels 4.98% 29.88% 35.27% 27.39% 2.49% 2.93 Are enviromentally friendly 2.07% 8.30% 20.33% 53.11% 16.18% 3.73 Lead to lower maintenance costs for the vehicle compared to regular fuel 2.49% 21.58% 54.77% 19.50% 1.66% 2.96 Are still in the experimental stage of product development 1.66% 10.37% 19.92% 52.28% 15.77% 3.70 Meet quality standards 0.41% 9.13% 53.53% 34.44% 2.49% 3.29 Can only be used in vehicles with modified engines 1.24% 13.28% 32.37% 43.98% 9.13% 3.46 T a ble 6 2. WULS student opinion with the characteristics of biofuels Question Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree Mean Are high quality fuels 0.67% 23.33% 42.00% 25.33% 8.67% 3.18 Are safe to use 1.33% 5.33% 29.33% 51.33% 12.67% 3.69 Are a high performance fuel 2.68% 26.85% 40.94% 24.16% 5.37% 3.03 Will not damage the car 3.33% 22.00% 52.00% 16.67% 6.00% 3.00 Are cheaper than regular fuels 5.33% 24.67% 28.67% 26.67% 14.67% 3.21
88 Table 6 2. Continued Are enviro n mentally friendly 4.67% 6.67% 13.33% 41.33% 34.00% 3.93 Lead to lower maintenance costs for the vehicle compared to regular fuel 6.00% 20.00% 42.67% 22.00% 9.33% 3.09 Are still in the experimental stage of product development 2.00% 9.33% 20.00% 52.00% 16.67% 3.72 Meet quality standards 0.00% 6.67% 44.67% 42.00% 6.67% 3.49 Can only be used in vehicles with modified engines 6.00% 16.67% 33.33% 32.00% 12.00% 3.27 Table 6 3 New Environmental Paradigm (NEP) scale in the United States Question Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree Mean The so called facing humankind has been greatly exaggerated 11.62% 35.68% 31.54% 16.18% 4.98% 2.67 If things continue on their present course, we will soon experience a major ecological catastrophe 2.90% 8.71% 21.99% 48.13% 18.26% 3.70 Humans will eventually learn about how nature works to be able to control it 9.54% 26.14% 32.78% 27.39% 4.15% 2.90 The balance of nature is very delicate and easily upset 1.24% 12.45% 24.90% 46.89% 14.52% 3.61 Humans were meant to rule over the rest of nature 17.01% 29.05% 25.31% 21.99% 6.64% 2.72
89 Table 6 3. Continued Plants and animals have as much right as humans to exist 2.49% 11.62% 22.41% 37.34% 26.14% 3.73 Human ingenuity will insure that we do not make the earth unlivable 7.47% 17.01% 31.95% 35.68% 7.88% 3.20 We are approaching the limit of the number of people the earth can support 3.73% 19,09% 27.80% 32.37% 17.01% 3.40 The balance of nature is strong enough to cope with the impacts of modern industrial nations 12.03% 42.74% 24.48% 18.67% 2.07% 2.56 The earth is like a spaceship with very limited room and resources 2.90% 12.03% 21.58% 43.57% 19.92% 3.56 Table 6 4 New Environmental Paradigm (NEP) scale in Poland Question Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree Mean The so called facing humankind has been greatly exaggerated 7.33% 30.67% 34.67% 22.67% 4.67% 2.87 If things continue on their present course, we will soon experience a major ecological catastrophe 2.00% 11.33% 26.67% 38.67% 21.33% 3.86 Humans will eventually learn about how nature works to be able to control it 4.67% 21.33% 34.00% 34.00% 6.00% 3.15
90 Table 6 4. Continued The balance of nature is very delicate and easily upset 2.67% 4.67% 10.00% 43.33% 39.33% 4.12 Humans were meant to rule over the rest of nature 12.67% 27.33% 22.67% 27.33% 10.00% 2.95 Plants and animals have as much right as humans to exist 5.33% 6.00% 5.33% 28.00% 55.33% 4.22 Human ingenuity will insure that we do not make the earth unlivable 1.33% 10.00% 10.67% 45.33% 32.67% 3.98 We are approaching the limit of the number of people the earth can support 5.33% 15.33% 39.33% 31.33% 8.67% 3.23 The balance of nature is strong enough to cope with the impacts of modern industrial nations 23.33% 48.00% 22.00% 6.00% 0.67% 2.13 The earth is like a spaceship with very limited room and resources 5.33% 15.33% 18.67% 40.00% 20.67% 3.55 Table 6 5. Level of importance considering future car characteristics in the United States Question Not at all Important Not Important Neither Important nor Unimportant Important Very Important Mean Price of the car 0.83% 1.66% 2.07% 34.02% 61.41% 4.54 Fuel efficiency (miles/gallon) 1.24% 2.07% 4.98% 47.72% 43.98% 4.31 Safety 0.83% 2.49% 7.05% 44.40% 45.23% 4.31
91 Table 6 5. Continued Comfort 0.00% 3.33% 10.83% 55.00% 30.83% 4.13 Size 0.41% 3.32% 9.13% 58.92% 28.22% 4.11 Insurance costs 1.24% 4.98% 9.96% 51.45% 32.37% 4.09 Fuel price 1.24% 4.98% 12.03% 50.62% 31.12% 4.05 Maintenance cost 0.83% 5.81% 11.20% 52.70% 29.46% 4.04 Appearance 1.66% 6.64% 15.35% 43.57% 32.78% 3.99 Brand 2.07% 9.13% 17.01% 51.87% 19.92% 3.78 Performance (horse power, acceleration, handling, speed) 2.49% 7.88% 18.67% 52.28% 18.67% 3.77 Engine type 2.07% 11.62% 33.61% 40.25% 12.45% 3.49 CO2 emmission 6.22% 17.84% 35.68% 30.29% 9.96% 3.20 Table 6 6. Level of importance considering future car characteristics in Poland Question Not at all Important Not Important Neither Important nor Unimportant Important Very Important Mean Price of the car 0.00% 1.33% 2.00% 37.33% 59.33% 4.55 Fuel efficiency (miles/gallon) 0.00% 2.67% 4.00% 43.33% 50.00% 4.41 Safety 0.00% 3.33% 5.33% 40.67% 50.67% 4.39 Comfort 0.00% 3.33% 10.67% 60.67% 25.33% 4.08 Size 0.67% 4.67% 8.00% 63.33% 23.33% 4.04 Insurance costs 0.00% 6.00% 14.67% 53.33% 26.00% 3.99 Fuel price 0.67% 3.33% 9.33% 48.67% 38.00% 4.20 Maintenance cost 0.00% 2.67% 5.33% 53.33% 38.67% 4.28 Appearance 0.67% 6.00% 8.67% 56.00% 28.67% 4.06 Brand 1.33% 10.00% 22.67% 54.67% 11.33% 3.65 Performance (horse power, acceleration, handling, speed) 0.67% 8.67% 17.33% 51.33% 22.00% 3.85 Engine type 0.00% 14.00% 16.67% 52.00% 17.33% 3.73 CO2 emmission 7.33% 23.33% 34.00% 29.33% 6.00% 3.03
92 Tab le 6 7. Preference of future engine types in the United States Question Definitely Would Consider Would Not Consider Would Consider Idefinitely Would Consider Have Never Heard Of Mean Gasoline powered (up to 10% bioethanol blend) 2.07% 3.32% 41.49% 45.64% 7.47% 3.53 Diesel powered (up to a 5% biodiesel blend) 12.45% 27.39% 32.37% 21.58% 6.22% 2.82 Hybrid (uses gasoline and electricity) 6.30% 10.08% 31.51% 51.26% 0.84% 3.30 Electric (battery powered) 12.86% 22.41% 30.29% 33.61% 0.83% 2.87 Flex fueled (can use gasoline or gasoline/ ethanol blends up to 85% ethanol) 4.60% 5.02% 39.33% 36.82% 14.23% 3.51 Other (please list) 5.88% 3.92% 19.61% 15.69% 54.90% 4.10 Tab le 6 8. Preference of future engine types in Poland Question Definitely Would Consider Would Not Consider Would Consider Idefinitely Would Consider Have Never Heard Of Mea n Gasoline powered (up to 10% bioethanol blend) 3.52% 15.49% 60.56% 11.97% 8.45% 3.06 Diesel powered (up to a 5% biodiesel blend) 2.11% 5.63% 57.04% 25.35% 9.86% 3.35 Hybrid (uses gasoline and electricity) 9.15% 14.78% 42.25 % 23.94% 9.86% 3.11 Electric (battery powered) 15.49% 33.80% 28.17% 14.78% 7.75% 2.65 Flex fueled (can use gasoline or gasoline/ ethanol blends up to 85% ethanol) 5.67% 12.06% 55.32% 12.77% 14.18% 3.18 Other (please list) 6.90% 6.90% 20.69% 6.90% 58.62% 4.03
93 CHAPTER 7 MODEL SPECIFICATIONS AND R ESULTS Tobit Model A detailed review of the literature reveals that t obit models have been applied to a wide variety of problems and a variety of economic and sociological issues T obit models are particularly used to study censored and limited dependent variables, which ha ve become increasingly common in applied social science research over the past two decades (Smith & Brame, 2003) T obit analysis assumes that the dependent variable has a number of its values clustered at a limiting va lue. In economics, such a model was first suggested by James Tobin in 1958. The tobit model was developed in order to handle cross sectional data sets where some observations in the sample lacked data or had zero values for the depende nt variable (Gujarati 2004) The tobit model was first used by Tobin to analyze household expenditure on durable goods which was the classic example of censoring. By definition of Long ( 1997) censoring occurs when we observe the independent variable for the entire sample, b ut for some observations we have only limited information about the dependent variable truncation limits data more severely by excluding observations based on characteristics of the dependent variable truncation changes the sam ple, but censoring does not. Before 1970, the t obit model was used very rarely in econometric applications, continue to appear (Amemiya, 1984) In comparison to the Ordin ary Least Squares (OLS) regression model t obit estimates are theoretically superior when using censored data (McDonald & Moffitt, 1980) OLS estimates become biased and inefficient depending on the number of zeros in relation to the number of observation s in the data set. T he higher the number
94 of zeros in relation to the total number of observations, the greater is the instability of the OLS estimates and vice versa. By contrast, in cases where the number of zeros is low, then the difference between OLS a nd t obit estimates is usually marginal. Amemiya, ( 1984) showed that the presence of zeros in the dependent variable destroys the linearity assumption so that the least squares method is clearly inappropriate ". As a result, a Tobit analysis is used in pref erence to OLS. According to Sigelman & Zeng ( 1999), the Standard Tobit model can be defined as follows: y* = x i + i y i = y* if y i > 0, y i = 0 if y i (7 1) where: y i non observable variable y i ob served outcome variable; x i vector of independent variables vector of tobit regression coefficients random, standard normal disturbanc e term i number of observations, Maximum likelihood estimation of the tobit model is straightforward. Let f ( ) and F ( ) denote the de nsity function and the cumulative density function for y* Then the model implies that the probabilities of observing a non zero y and a zero y are f(y) and p( y* <0) = F(0), respectively (Sigelman & Zeng, 1999) The log likelihood function for the model is therefore:
95 = (7 2) Because y* is normally distributed f( ) and F( ), and therefore the log likelihood function, can be expresses in case of the density function and the cumulative density function of the standard normal distribution and and the log likelihood function can be written in the familiar form: (7 3) In order to interpret the estimation results, the marginal effects of the independent variables on some conditional mean functions should be examined. In the tobit model, there are three different conditional means. Those of the latent variable y* the obs erved dependent variable y, and the uncensored observed dependent variable y / y > 0. The interpretation depends on whether one is censored with the marginal effect of x on y* y, or y/y > 0. Once one determines which marginal effect one is interested in, one simply examines the marginal effects of x on the appropriate conditional expectations (Sigelman & Zeng, 1999) The three marginal effect expressions are derived using standard results on moments of censored normal distributions, as follows: (7 4) (7 5) = (7 6)
96 In this study, the t and to learn about the relationship of those beliefs with societal, economic and environmental variables The dependent variable, belief, was censored at both ends. to a series of three questions: Sustainability of biofuels (Belief that biofuels are a sustainable alternative to traditional fossil fuels) Replacement of fossil fuels (Belief that biofuels can replace a significant amount of traditional fossil fuels in the near future) Impact of biofuels (Belief that biofuels reduce glob al climate change, lower carbon emissions, pollute waterways less than traditional fuels and use fewer chemicals to be produced) All three questions are summed to create a scale measuring attitude towards biofuels. A test was run to determ ine if the scale was reliable, with a result of 0.743, indicating there is internal reliability A tobit model is then estimated using societal, economic and environmental variables as the independent variables and belief as the dependent variable The Sta tistical Package for the Social Sciences ( SPSS ) and the LIMDEP were used to compute data from both countries the United States and Poland. The general format for the model is shown in Equation 7 7. Belief = f(Demographic variables, K nowledge about biofu els, Food versus fuel preference, Perceived Consumer Effectiveness, New Environmental Paradigm, Current car characteristics and fuel consumption, Biofuels perspectives, Information sources) (7 7) Specific variables included in the model are show n in Equation 7 8 and are described in detail in Table 7 1 S pecific information on the means and responses for the variables i ncluded is provided in Chapter 6
97 Belief = f (Sub_know, Obj_know, FAC1, FAC2, FAC3, Food_Prod, Food_Price, Car_owner, Availab, Ec on_dev, Gov_subs, TV&Radio, Internet, News&Journ, Univ&Scient, E nv/Con_Org, Governm Fuel_Sec, Country, Expenses, Distance, Fuel_eff, Age, Gender, College, PCE, NEP, Sub_knowI, Obj_knowI, FAC1I, FAC2I, FAC3I, Food_ProdI, Food_PriceI, Car_ownerI, AvailabI, Econ_devI, Gov_subsI, TV&RadioI, InternetI, News&JournI, Univ&ScientI, Env/Con_OrgI Governm I, Fuel_SecI, ExpensesI, DistanceI, Fuel_effI, AgeI, GenderI, CollegeI, PCEI, NEPI) (7 8) Tobit Results The dependent variable, belief, was censored at both ends, with a mean of 15.5 and range of 1 to 24. In total, 370 observations were used to e stimate the model in equation 7 8 Results are presented in Table 7 2. Demographics The dummy variable representing country did not have a statistically significant effect on the beliefs of biofuels. This implies that there is no statistical difference b etween students in the United States and Poland based only on the country they are from. However, country was included as an interaction variable with all other independent variables to see if belief in biofuels differs for different sub groups between the countries Age was also not significant in terms of students beliefs, which is not surprising due to the relatively small range of ages among students. The majority of student s were between the ages of 19 and 24, with a few age exceptions. Gender was als o not statistically significant in determining perception of biofuels. College was significantly related College of Agriculture and Life Sciences (CALS) had a lower belief score than non CALS students by 0.01 uni ts. Respondents from Poland who were in the College of
98 Agriculture also had lower perceptions of biofuels than those not in agriculture, but by a greater amount than their U.S. counterparts (1.35 units). K nowledge about Biofuels Subjective knowledge was not statistically related to the belief score of biofuels. This effect is somewhat unexpected as people are often influenced by their subjective knowledge On the other hand, objective knowledge was statistically significant related to belief in biofuel fo r all students. In case of students from the United States, for every increased unit of objective knowledge, the belief score of biofuels increases by 0.10. Students in Poland had a stronger increase in belief for every unit increase in objective knowledge For each additional unit of the objective knowledge in Poland, the belief score increases by 0.59. Three factors (quality, cost, and trust in technology) were created b ased on the question related to biofuels characteristics. The first two, quality and cost, were statistically significant indicating that environ mental friendliness and economy biofuels In both cases there was no statistically significant difference between the countries. Of these, the most important factor was the first, related to quality, including characteristics of environmental friendliness and safety of biofuels For both the Unite d States and Poland, for every one unit increase of biofuel quality factor, the belief score increased by 1.03 units. The second significant factor was the cost factor which focuses on biofuels overall and maintenance cost s in comparison to regular fuel. For Poland and the United States the cost factor was statistically significant at the same level with each additiona l unit of cost incurred, leading to an increase in belief score of 0 45 for students in both countries.
99 The third factor related to trust i n technology was not significant. This indicates trust in technology. The variable is statistically significant in bo th countries. In the United States, for every additional unit a person increases their score on the availability of biofuels, the belief score increases by 0.27. However in Poland, the belief score will decrease by 0.65. This inverse relationship may well indicate that U.S. students associate product availability with other aspects of product quality, or, in another variation, that perceived experience with the good lends itself to the development of positive attitudes amongst this group. If students percei ve that biofuels are available, American students think more positively about this fact. On the contrary, Polish participants think more negatively about biofuels the more they believe they are availabl e Food v ersus Fuel P reference Consumer concerns abo ut biofue l production leading to changes in food availability and price are also included in the model. To account for the influence these perceptions might have on the acceptance of biofuels, respondents were asked specific questions about their beliefs o n the interaction of biofuels p roduction and agro food issues. Belief in an impact on food production did not have a statistically significant effect on the overall belief in biofuels among respondents in the United States and Poland. Therefore, the linkag e between biofuels production and food production, followed by linkage between biofuels production and food price Perceived Consumer Effectiveness The PCE scale was statistically significantly r elated to belief in biofuel in both countries. For every additional unit of PCE, the belief score of biofuels increased by 0.01 unit for U.S. students For the same increase in the PCE score in Poland, the
100 belief score increase d by 0.24. Therefore, if Polis h students felt they had more c ontrol over the environment, they believed more strongly in biofuels than U.S. students. New Environmental Paradigm The New Environmental Paradigm was not statistically significant at or above a 90% confidence level nor was the interaction variable This indicates that the NEP scale was not related to beliefs of biofuels among students in either country Biofuels Economy Most characteristics about cars and fuel consumption were not statistically significant This includ es car ownership, fuel expenses and d istance driven in an average week. The exception was fuel efficiency which was significant for both U.S. and Polish students. For every additional mile per gallon increase in fuel efficiency the belief score of biofuel s increase s by 0 01 unit for U.S. students For Polish students, the result was opposite, with a decrease in perceptions of biofuels of 0 06 unit s for every mile per gallon increase in fuel efficiency Biofuels P erspectives Frequently the media presents investment in biofuels technology and production as a pathway towards economic development, stability and diversification. R espondent s who believe that biofuels are tied to economic development were likely to have a belief score that was 1.27 units higher Majority of students claimed that biofuels can help with economic development in their countries. Whether or not the respondent believed that government subsidies was not statistically significant for students in either country Information S ources Stu dents who use television and radio as a source of information were significantly more likely to have a higher belief toward biofuel s For every additional unit they rated television and radio as a source of information, the belief score
101 increased by 0.68. This did not differ by country. Both, U.S. and Polish students who rated television and r adio as a more important source, they believed more strongly in biofuels than average students. Internet is found as a very significant source of biofuels knowledge. For Americans, for ev ery additional unit they rated i nternet as a source of information, the belief score increased by 0,16. By contrast, student s in Poland when rating higher i nternet as an information source about biofuels, they exhibited a decrease in t heir belief score by 0 71. U.S. students who rated i nternet as a more important source of information, they believed more strongly in biofuels than average students. Howe ver, Polish students who rated i nternet as a more important information source, they l ess strongly believed in biofuels. Con sidering n ewspaper s and j ournalists as the sour ce of information, for students in the United States and Poland this source was statistically significant. For every additional unit the belief score decreased by 0 72 un it in relation to the average person. There was no country effect Both, U.S. and Polish students who rated n ewspa per and j ournalists as a more important source, they believed less strongly in biofuels than average students. E nvironmental and consumer o rg anizations are significant and crucial only for the U.S. respondents. For every additional unit they rated these organizations as a source of information the bel ief score increase d by 0 63. Polish students, on the other hand, are not shown to have their v iews significantly impacted by considering information from environmental and consumer o rganizations. U.S. students who rated these organizations as a more important source of information, they believed more strongly in biofuels than average students.
102 The next two sources of biofuels information, the government and the fuel sector, were not significant for students from the United States and Poland in terms of the beliefs score. In general all students did not consider information about biofuels from govern ment and fuel sector as being important Information gained from universities and s cientists was not statistically significant in terms of biofuels beliefs among students from both countries. Fifty three independent variables were entered into a tobit m o del on consumer beliefs of bio fu e ls All variables were grouped into 8 categories. Eighteen variables had a statistically significant impact on belief score at a 10% or better level of significance. Table 6 2 shows the estimated coefficients for one unit changes in each of the chosen variables. Almost in each category there were significant variables except for In the following chapter further interpretation of the results from the tobit model in comparison to the previous research will be showed. There will be also presented more detailed interpretation of the U.S. and Polish descriptive statistics. Table 7 1 Explanation of variable coding Variable name Variable description Coding Demographics Country Country of residence Poland (PL) = 0, United States (US) = 1 Age Age of individual Ranges from 19 to 45 AgeI Interaction of age and country = 0 if Country = PL = Age if Country = US Gender Gender of individual Female = 0, Male = 1 GenderI Interaction of gender and country = 0 if Country = PL = Gender if Country = US
103 Table 7 1 Continued College_Ag College specification Age = 1, Non ag. = 0 College_AgI Interaction of college and country = 0 if Country = PL = College_Ag. if C ountry =US K nowledge ab o ut biofuels Sub_know Subjective knowledge of individual Ranges from 1 to 5 Sub_knowI Interaction of subjective knowledge and country = 0 if Country = PL = Sub_know if Country = US Obj_know Objective knowledge of individual Ranges from 1 to 5 Obj_knowI Interaction of objective knowledge and country = 0 if Country = PL = Obj_know if Country = US FAC1 Quality Factor Ranges from 3,43 to 0,09 FAC1I Interaction of quality factor and country = 0 if Country = PL = FAC1 if Country = US FAC2 Cost Factor Ranges from 2,86 to 0,03 FAC2I Interaction of cost factor and country = 0 if Country = PL = FAC2 if Country = US FAC3 Trust Factor Ranges from 4,15 to 0,23 FAC3I Interaction of trust factor and country = 0 if Country = PL = FAC3 if Country = US Availab Belief in availability of biofuels Ranges from 0 to 5 AvailabI Interaction of availability and country = 0 if country = PL = Availab if country = US Food vs Fuel preference Food_prod Biofuels influence on food production Ranges from 1 to 5 Food_prodI Interaction of biofuels influence on food production and country = 0 if Country = PL = Food_prod if Country = US Food_price Biofuels influence on food production Ranges from 1 to 5 Food_priceI Interaction of biofuels influence on food price and country = 0 if Country = PL = Food_ price if Country = US Perceived Consumer Effectiveness PCE Individual score of PCE Ranges from 4 to 20 PCEI Interaction of PCE and country = 0 if Country = PL = PCE if Country = US New Environmental Paradigm NEP Individual score of NEP Ranges from 10 to 50 NEPI Interaction of NEP and country = 0 if Country = PL = NEP if Country = US Current car characteristics and fuel consumption Car_owner Car ownership NO = 0, YES = 1 Car_ownerI Interaction of car ownership and country = 0 if Country = PL = Car_owner if Country = US Expenses Monthly money spent on fuel ($) Ranges from $10 to 400 ExpensesI Interaction of biofuels expenses and country = 0 if Country = PL = Expenses if Country = US Distance Distance driven per week (miles) Ranges from 5 to 475 miles DistanceI Interaction of distance and country = 0 if Country = PL = Distance if Country = US
104 Table 7 1 Continued Fuel_eff Fuel efficiency (miles/gallon) Ranges from 10 50 miles/gallon Fuel_effI Interaction of fuel efficiency and country = 0 if Country = PL = Fuel_ eff if Country= US Biofuels perspectives Econ_dev Economic development Ranges from 1 to 5 Econ_devI Interaction of economic development and country = 0 if Country = PL = Econ_dev if Country = US Gov_sub Government subsidies Ranges from 1 to 5 Gov_subI Interaction of government subsidies and country = 0 if Country = PL = Gov_sub if Country = US Information sources TV&Radio Information source TV and Radio Ranges from 1 to 4 TV&RadioI Interaction of TV & Radio and country = 0 if Country = PL = TV&Radio if Country = US Internet Information source Internet Ranges from 1 to 4 InternetI Interaction of Internet and country = 0 if Country = PL = Internet if Country = US News&Journ Information source Newspapers & Journalists Ranges from 1 to 4 News&JournI Interaction of Newspapers & Journalists and country = 0 if Country = PL = N ews&Journ if Country= US Uni&Scien Information source Universities & Scientists Ranges from 1 to 4 Uni&ScienI Interaction of Universities & Scientists and country = 0 if Country = PL = Uni&Scien if Country = US Env/Con_Org Information source Environmental/Consumer Organizations Ranges from 1 to 4 Env/Con_OrgI Interaction of Envir onmental/Consumer Organizations and country = 0 if Country = PL = Env/Con_Org if Country = US Governm Information source Government Ranges from 1 to 4 GovernmI Interaction of Government and country = 0 if Country = PL = Governm if Country = US Fuel_sec Information source Fuel sector Ranges from 1 to 4 Fuel_secI Interaction of Fuel sector and country = 0 if Country = PL = Fuel_sec if Country = US Table 7 2 Tobit analysis results Std.Error T ratio P value Coefficient Demographics Country 5,294 0,659 0,510 3,487 Age 0,153 1,396 0,163 0,214 AgeI 0,166 0,915 0,360 0,152 Gender 0,507 0,544 0,586 0,276 GenderI 0,639 0,033 0,973 0,021
105 Table 7 2 Continued College_ag* 0,512 2,627 0,009 1,346 College_agI** 0,646 2,068 0,039 1,336 Current knowledge and perception about biofuels Sub_know 0,319 0,405 0,685 0,129 Sub_knowI 0,384 0,760 0,447 0,292 Obj_know* 0,171 3,447 0,001 0,589 Obj_knowI* 0,213 2,288 0,022 0,488 FAC1* 0,240 4,290 0,000 1,028 FAC1I 0,318 0,019 0,985 0,006 FAC2* 0,204 2,222 0,026 0,454 FAC2I 0,302 1,356 0,175 0,409 FAC3 0,213 1,357 0,175 0,289 FAC3I 0,296 1,579 0,114 0,467 Availability*** 0,384 1,705 0,088 0,654 AvailabilityI** 0,430 2,140 0,032 0,920 F ood vs fuel preference Food_prod 0,418 1,438 0,150 0,601 Food_prodI 0,468 0,686 0,493 0,321 Food_price 0,380 0,060 0,952 0,023 Food_priceI 0,454 1,508 0,132 0,684 Perceived Consumer Effectiveness PCE* 0,090 2,627 0,009 0,235 PCEI*** 0,126 1,825 0,068 0,229 New Environmental Paradigm NEP 0,063 0,808 0,419 0,051 NEPI 0,072 0,394 0,693 0,028 Current car characteristics and fuel consumption Car_owner 0,495 1,116 0,264 0,552 Car_ownerI 0,743 0,324 0,746 0,240 Expenses 0,004 1,130 0,258 0,004 ExpensesI 0,005 0,230 0,818 0,001 Distance 0,003 0,683 0,495 0,002 DistanceI 0,003 0,054 0,957 0,000 Fuel_eff*** 0,033 1,861 0,063 0,062 Fuel_effI*** 0,039 1,721 0,085 0,067 Biofuels perspectives Econ_dev* 0,324 3,916 0,000 1,267 Econ_devI 0,416 0,525 0,599 0,219 Gov_subs 0,302 0,283 0,778 0,085 Gov_subsI 0,382 0,587 0,557 0,224 Information sources TV&Radio* 0,302 2,239 0,025 0,676 TV&RadioI 0,395 0,536 0,592 0,211 Internet* 0,298 2,385 0,017 0,710 InternetI* 0,373 2,331 0,020 0,869
106 Table 7 2 Continued News&Journ* 0,303 2,366 0,018 0,716 News&JournI 0,408 1,355 0,176 0,552 Uni&Scienc 0,250 0,207 0,836 0,052 Uni&SciencI 0,338 0,494 0,621 0,167 Envi/Con_Org 0,281 1,142 0,253 0,321 Envi/Con_OrgI*** 0,369 1,711 0,087 0,631 Governm 0,356 1,051 0,293 0,374 Governm 0,479 0,719 0,472 0,344 Fuel_sector 0,334 1,291 0,197 0,431 Fuel_sectorI 0,445 1,470 0,141 0,654 (*variable is significant with a 99% confidence level, ** variable is significant with a 95%confidence interval, *** variables is significant with a 90% confidence interval)
107 CHAPTER 8 CONCLUSIONS Summary The objective of this research wa s an analysis of consumer perceptions of biofuels. Due to the complexity of the concept, it should be treated as a descrip tive category. In general in this research we measure d knowledge, beliefs and pro or anti biofuel att itudes. This master thesis is a comparison of consumer perception towards biofuels in the United States and Poland. Many similarities and difference s were distinguished concerning demographics, knowledge, environmental issues, biofuels economy and perspec tives. The research allowed to verify hypotheses, assumed at the beginning of this study. The first in the United States and Poland are different. The results indicated that there is no statistical difference between students in the United States and Poland based only on the country they are from. However, using country as an interaction variable with other independent variables indicated there are differences between the countries rel ated to different sub groups. The differences were related to following aspects: demographics, knowledge, biofuels economy, environmental issues, biofuels perspectives and information sources. As a result of this finding, the first hypothesis is not reject ed. The second hypothesis suggested that consumers in the United States and Poland believe that biofuels are environmentally friendly and safe Results were mixed on this hypothesis as some variables representing belief in biofuels were positive and others were negative.
108 In order to investigate the statistical significance of selected variables a regression analysis was performed. Discussion of the Statistical R esults Demographics P articipants of the research were students from the University of Flo rida in the United States and Warsaw University of Life Sciences in Poland. Respondents from both countries were the homogenous group in terms of age. Both, U.S. and Polish stu dents were the interesting and c onvenient target group and they can be recognize d as the consumers of the fu tu re. Researc h results revealed that age and gender did not influence consumer belief of biofuels. The only significant variable was type of college the students were enrolled in, showing that Polish students from the Faculty o f Agriculture and Biology were less supportive toward biofuel s than U.S. students from College of Agriculture and Life Sciences (CALS) It can be said that students from the College of Agriculture in Poland are either exposed to more negative information a bout biofuels, or less positive information, than their U.S. counterparts. One potential explanation for the difference in messages obtained in both countries might be the differences in the process of learning at both Universities in Gainesville and Warsa w. Knowledge about biofuels Both, U.S. and Polish students have a relatively good objective knowledge and perception about biofuels is positively, however stronger in Pola nd. This indicates that Polish respondents a re more likely to respond to increases in knowledge about biofuels in a positive manner.
109 B oth U.S. and Polish students do not feel they are very knowledgeable about biofuels It may mean that their subjective knowledge is small. T his is consistent with the findings of a similar study (Polish Public Opinion Research Center, 2009 b ) Taking into account the low subjective and average objective knowledge, respondents seem to be uncertain a bout biofuels. This is similar to a previous study that found U.S. respondents have little knowledge about biofuels but most were interested in learning more (University of Wisconsin Madison, 2009) There was also a connection between belief in availability of biofuels and overall perception of biofuels This relationship was opposite for students from both countries. When U.S. students feel that biofuels are more available, the belief in biofuels increases, however Polish students negatively pe rceive biofuels. Biofuels economy Cost factor ( focuses on biofuels overall and maintenance costs in comparison to regular fuel ) was positively associated with belief towards biofuels. Students in the United States and Poland, had belief that biofuels are not cheaper than regular fuels and that biofuels will not lead to lower maintenance costs for the v ehicle compared to regular fuel. However in reality, the situation is different, because biofuels at the gas stations are cheaper than regular fuels due to g overnment subsidies. Another relationship between fuel efficiency and beliefs of biofuels was inverse for students from two countries. Students in the United States seem to be less satisfied about their current fuel efficiency and they are more likely to search for other solutions, such as higher biofuels blends Polish students were happier with the fuel efficiency they currently have, suggesting that the more fuel efficient the car is, the more likely people are to stay with their current fuel and are not interested in biofuel alternatives.
110 Environmental issues Three fourth of students from the United States and Poland str ongly believe d that biofuels are environmentally friendly and safe. There was a relationship between quality factor ( including characteristics of environmental friendliness and safety) and consu is the stronger beli ef of biofuels Overall, respondents in both countries equally strongly, believe that by using biofuels, they may improve environmental condition, which positively influences per ception of biofuels. Moreover, three fourth of U.S. and Polish students strongly believe that biofuels have a positive impact on lowering carbon emissions which lead to decrease of global climate change The results of this study were consistent with the findings of a similar U.S. study which showed that more than half of respondents believed that biofuels can have positive impacts on climate change by reducing greenhouse gas emissions (University of Wisconsin Madison, 2009) Continuing emphasis of global climate changes, a Polish study revealed that more than a half of respondents strongly believe that the use of renewable energy, including biofuels, protects the environment against climate changes (Polish Public Opinion Research Center 2009 a ) There was also connection between the behavior towards the environment protection and the belief of biofuels. It can be said that students from both countries positively believe in individual impact on the environment however Polish students have a stronger belief. Moreover, the regression model indicated that the New Environmental Paradigm (NEP) scale, was not related to beliefs of biofuels among students in either country. However, survey demonstrated importance of NEP.
111 Almost hal f of U.S. and Polish students also recognized that the production of biofuels impacts food availability and food prices. Surprisingly, this awareness did not Biofuels p erspectives More than half of U.S. and Polish respondents strongly believe d that biofuels can lead to the economic development of t heir countries. Respondents who believed in that were equally more likely to have a positive view s on biofuels. Three fourth of U.S. and Polish students strong ly believe that government subsidies impact production and the use of biofuels, however this belief is not related to their overall belief in biofuels. Almost half of the students, believe d that production and use of biofuels should not be controlled by th e government. Another third had no opinion These lack of acceptance towards government control among students are similar to negative views among the whole society in the United States and Poland, which is followed by certain actions. In April 2011 U.S. S enate voted to eliminate bioeth anol subsidies Similarly, In Poland on the 1 st of May 2011, the exemption from the excise duty was removed M ore than half of respondents in both countries believe d that biofuels are an alternative to traditional fossil fuels and that biofuels can be a significant replacement for fossil fuels in the near future Moreover, majority of U.S. and Polish students believe d that global p erspectives of biofuels depend on te chnological development. Thus, advanced new technologies are necessary to produce next generations biofuels.
112 Information s ources Finally, a few significant information sources of biofuels were distinguished. Though television and radio is not the most popular source of information it does positively impact perceptions of biofuels among students from both countries. Surprisingly, information received from internet, which is recognized as the most used source of information influences student views diffe rently. Students who use the internet more than average as a source of information in Poland were less likely to have positive perceptions of biofuels, where students from the United States had a more positive perception. One potential explanation for the difference between the two results might be the type of information provided by the internet source. Furthermore, information provided by newspapers and journalists had equally negative impacts the perception of biofuels in both countries. One of the possi ble reasons can be related to lack of trust towards above mentioned information source representing different political and economic options. In both count r i es one third of respondents use environmental and consumer organizations as a source of biofuel in formation, however only U.S. respondents were shown to have their views positively impacted by considering information from these organizations. It can be resulted from a big amount of organizations existing in the United States showing big potential impac ting on consumer perceptions. Further research revealed that information provided by the government, the fuel sector, and universities and scientists were not significant among students from both countries. Final R emarks R esearch results on perceptions of biofuels among students in the United States and Poland, countries with different levels of market development allow for the
113 formulation of several conclusions. American and Polish students indicated differences and simila rities in perceptions of biofuels that may be associated with different levels of market development. The Polish market is defined as the market in the early stages of development, with a large scope for increasing production capacities. However, U.S. mark et is an advanced market, and is the largest producer of biofuels in the world. The lower level of market development in Poland means that the availability of biofuels is limited, which significantly affects the lower perception of biofuels. From the point of view of Polish consumers, a key issue is availability of biofuels in gas stations, which unfortunately is missing in Poland. In the United States, the availability of higher biofuels blends is much higher but still is not sufficient in the eyes of stud ents. Another issue is the price of biofuels. Currently biofuels are more expensive than conventional fuels and reliant on government support systems. In the United States and Poland biofuels availability at gas statio ns are cheaper than traditional fuel; however students are not aware of this fact. If students were more aware of the lower price of biofuels, there is a possibility that they would buy them more frequently, which in the long term might affect their popularity. This lack of biofuels price awar eness might be a result of low level of subjec tive knowledge. Thus, providing more could significantly increase the perception of biofuels, and contribute to the market development. Results objective knowledge about biofuels is rather superficial. Students have basic knowledge about biofuels issues such as the belief that biofuels are environmentally friendly and safe. However, they
114 are lacking specific information. This is clearly seen on the example to answer the question about biofuels price in comparison to traditional fuels. In order to persuade consumers to buy biofuels for their current or future car, there should be provided a system of addition al incentives, educational activities and marketing. Therefore, major actions should be taken to promote and popularize knowledge about biofuels. Education and Marketing Incentives These above mentioned actions should be consistent with trends observed in the global economy. An important element of promotional efforts toward biofuels use can be informational and educational initiatives. They should lead to an increase in awareness of the benefits of biofuel s usage and an increase in the availability of inf ormation about conditions on the use of biofuels. One of the types of promotional activities can be actions directed to the public, especially car us ers. Issues concerning the use of biofuels should be introduced to training programs at all levels of educa tion. Car users should also be provided with educational elements of the economic and environmental aspects of biofuels. In addition, promotional techniques should be used, such as advertisements in televis ion and radio in both countries. Another type of action should include activities directed to cars manufacturers. There should be provided compulsory information in new cars about whether the car is designed to burn biofuels or not. Another type of actions should be aimed at increasing demand for biofue ls. These may include local incentives for the purchase and use of vehicles on biofuels, such as a system of exemption s from parking fees, possibilities of free of charge entry to the city center and lower annual registration fees. It follows that the biof uels require additional incentives.
115 APPENDIX A SURVEY Please read this consent document carefully before you decide to participate in this survey. The aim of this survey is to gain information on consumer attitudes towards the biofuels market The survey asks about your views on biofuels an d their use time and help. You will be asked to answer a series of questions about consumer perceptions of biofuels that should t ake you approximately 10 minutes to complete. Please note that there are no wrong or right answers. Only your opinion is important. There are no expected risks or benefits to you for participating in this survey, and you will not receive any compensation f or participating. The survey is anonymous and your participation is voluntary. You have the right to withdraw from the study at anytime by exiting the survey. If you have questions about th e survey, you can contact: Dr Lisa House, PO Box 110240, Gainesv ille, FL 32611, phone 352 392 1826. For questions about your rights as a research participant in the study, you can contact: IRB02 Office, Box 112250, University of Florida, Gainesville, FL 32611 2250; phone 352 392 0433. By answering the next question, you are indicating that you voluntarily agree to participate in this survey. I agree to participate I choose not to participate Here are some definitions of terms we will use during the survey. Though you might know what these are already, we define them so we all are thinking the same thing when we see the words. Biofuels liquid or gaseous fuel for transport produced from biomass. Biomass biodegradable fraction of products, waste and residues from agriculture (including plant and animal substan ces), forestry and related industries, as well as the biodegradable fractions of industrial and municipal waste. The most commonly used biofuels are bioethanol and biodiesel Bioethanol ethanol produced from biomass and/or the biodegradable portion of waste. Biodiesel methyl ester produced from vegetable or animal oil, of diesel quality. Both fuels can be used in pure form by suitably adapted engines or may be blended in a mi xture with diesel or gasoline, respectively. In this survey, when we refer to biofuels, we are referring to liquid biofuel for cars. raw material and technology used t o produce them. These are: First Generation derived from raw materials, mainly from food crops or plant and animal fats. Second Generation derived from non food raw materials, agricultural and municipal waste and from conversion of cellulose. Third Generation derived with a suitably modified material at the stage of cultivation and formed on the basis of the cultivation of algae. Fourth Generation derived from biological processing of carbon.
116 The following questions are about your feelings on biofuels. 1. How knowledgeable are you about biofuels? 1 = Not Knowledgeable at all 2 3 4 5 = Very Knowledgable 2. Generally, how would you describe your own feelings about biofuels? Very Negative Negative Neutral Positive Very Positi ve 3. Please indicate your level of agreement or disagreement with the following statements. Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree It is worthless for the individual consumer to do anything about pollution. When I buy products, I try to consider how my use of them will affect the environment and other consumers. Since one person cannot have any effect upon pollution and natural any difference what I do. Each have a positive effect on society by purchasing products sold by socially responsible companies. 4. Do you believe that biofuels are a sustainable alternative to traditional fossil fuels? Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree 5. Do you believe that biofuels can replace a significant amount of traditional fossil fuels in the near future? Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree
117 The following questions are about your current knowledge and perceptions on biofuels. 6. Please indicate if you think the following raw materials are converted to biofuels? Strongly Disagree Disagree Neither Agree nor Disagree Agree Stron gly Agree Crops grown for animal feed (e.g. soybeans) Crops grown primarily for food (e.g. vegetables) Crops grown for energy (e.g. switch grass) Residues (e.g. straw) Animal waste (e.g. manure) 7. Please indicate your level of agreement or disagreement with the following statements. Biofuels... Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree Are high quality fuels Are safe to use Are a high performance fuel Will not damage the car Are cheaper than regular fuels Are enviromentally friendly Lead to lower maintenance costs for the vehicle compared to regular fuel Are still in the experimental stage of product development Meet quality standards Can only be used in vehicles with modified engines 8. How often, on average, do you purchase biofuels (in Florida higher biofuels blends than 10%)? Never Rarely Sometimes Quite Often Very Often Don't Know 9. How would you rate the availability of biofuels (in Florida higher biofuels blends than 10%)? Not Available Slightly Available Moderately Available Available Very Available
118 The next questions are related to your views about biofuels and the environment. 10. Please indicate your leve l of agreement or disagreement with the following statements. Biofuels... Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree Can reduce global climate change Can lower carbon emissions Can pollute waterways less than traditional fuels Can use fewer chemicals to be produced 11. Please indicate your level of agreement or disagreement with the following statements Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree The so humankind has been greatly exaggerated If things continue on their present course, we will soon experience a major ecological catastrophe Humans will eventually learn about how nature works to be able to control it The balance of nature is very delicate and easily upset Humans were meant to rule over the rest of nature Plants and animals have as much right as humans to exist Human ingenuity will insure that we do not make the earth unlivable We are approaching the limit of the number of people the earth can support The balance of nature is strong enough to cope with the impacts of modern industrial nations The earth is like a spaceship with very limited room and resources The following questions are intended to determine your thoughts about biofuel production and its influence on food production. 12. Do you believe that the production of biofuels impacts food availability? Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree
119 13. Do you believe that biofuel production influences the price of food? Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree The following questions are about your current car and gas usage. 14. Do you currently own a car? Yes No 15. What make, model and year is your primary car? 16. Do you have a preferred brand of gasoline? BP Shell Chevron Conoco Philips Kangaroo Exxon Mobil No Preferred Brand Option Other (please list) ____________________ 17. What kind of fuel do you use in your primary car? Unleaded Regular Unleaded Plus Unleaded Premium Diesel (D) Biodiesel (B20) Biodiesel (B99 B100) Ethanol (E85) Other (please list) ____________________ 18. How available are biofuels for refueling your current car? Not Available Slightly Available Moderately Available Available Very Available 19. Do you agree that the price of biofuels is appropriate? Strongly Disagree Disagree
120 Neither Agree nor Disagree Agree S trongly Agree 20. How much do you spend on fuel in a typical month? ____________________ 21. What is the proportion of your monthly expenses spent on fuel? 0 5 % 6 10 % 11 15 % 16 20 % 21 25 % 22. How many miles do you drive during an average week (miles / week)? ____________________ 23. What is the fuel efficiency of your car (miles / gallon)? ____________________ The following questions are about your future car and gas usage. 24. When purchasing a new car, how important are each of these characteristics to you? Not at all Important Not Important Neither Important nor Unimportant Important Very Important Price of the car Size Fuel efficiency Performance (speed) Engine type Brand Safety Fuel price Maintenance cost Comfort CO2 emission Insurance costs Appearance
121 25. Which type of engine would you consider for your next car? Definitely Would Not Consider Would Not Consider Would Conside r Definitely Would Consider Have Never Heard Of Gasoline powered (up to 10% bioethanol blend) Diesel powered (up to a 5% biodiesel blend) Hybrid (uses gasoline and electricity) Electric (battery powered) Flex fueled (can use gasoline or gasoline/ ethanol blends up to 85% ethanol) Please select "Have Never Heard of" for this question Other (please list) 26. When considering your next car purchase how important are the following fuel characteristics? Not at all important Not Important Neither Important nor Unimportant Important Very Important Price of fuel Availability at gas stations Engine modification requirements for a new car Environmental friendliness Odor Quality assurance Produced in the United States (not imported) Reduces maintenance cost Allows vehicle to operate at top performance The next section is on your perspectives of biofuels. 27. Do you believe biofuels can lead to economic development in the US? Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree 28. Which factors do you believe are important regarding the adoption of biofuels and increase their share in the fuel market?
122 Not at all Important Not Important Neither Important nor Unimportant Important Very Important More favorable policy for agriculture Intensive promotion Technological development Raising social awareness of biofuels 29. Do you think that government subsidies influence biofuels production and use? Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree 30. Do you think that biofuels production should be controlled by government? Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree 31. What is your level of agreement or disagreement with the following statements? Decisions about biofuels made over the next five years... Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree Will affect this generation only Will mostly affect future generations Will mostly affect agriculture rather than other economic sectors Will improve air quality 32. From which sources do you get information about biofuels? No information A Little bit information Much information Most information TV and Radio Internet Newspaper and Journalists Universities and Scientists Environmental / consumer organizations Government Fuel sector
123 To help with our analysis, we need to know a little bit about you. 33. In what year were you born? ____________________ 34. Please indicate your gender. Female Male 35. What is your standing at school? Freshman Sophomore Junior Senior Graduate, pursuing Masters degree or equivalent Graduate, pursuing PhD or equivalent 36. Please indicate what College your major is in? ____________________ 37. If there is anything you would like to add, please feel free to add comments or remarks. ____________________ Thank you for completing the survey. If you are completing this survey for extra credit in a class, please select the link below to submit your name. This will be kept in a seperate file so your responses to this survey will remain ano nymous. If you are not completing this for credit, please select finish below. Enter name for extra credit Finish survey
124 APPENDIX B DESCRIPTION OF THE U NIVERSITIES IN THE U NITED STATES AND POL AND University of Florida The University of Florida (UF) was founded in 1853 and currently is the state's oldest university and on e of the largest in the country. UF is a major land grant, sea grant, and space grant research university in Gainesville, Florida. University accounts for more than 50.0 00 students and 4. 000 faculty members. It is the second largest Florida unive rsity by student population According to UF demographics the majority is white population, followed by Hispanics Black and Asian. In terms of gender, females are dominating. The University of Florida offer s more than 100 undergraduate majors and nearly 200 graduate programs UF is home to more than 150 research centers and institutes and 16 academic colleges including: College of Dentistry, College of Design, Construction & Pl anning, College of Law, College of Education, College of Agricultural & Life Sciences, College of Business Administration, College of Medicine, College of Engineering, College of Fine Arts, College of Veterinary Medicine, College of Pharmacy, College of Nu rsing, College of Liberal Arts & Sciences, College of Journalism & Communications, College of Health & Human Performance, and College of Public Health & Health Profe ssion.
125 The University of Florida is well known for its excellent graduate programs includin g engineering, business law and medicine. In fact, all of these curriculums are held on one adjoining site, which administers 123 master's degree programs and seventy six doctoral degree programs in eighty seven schools and departments UF is a member of t he Association of American Universities, a confederation of the top research universities in North America It has been also included among the so called "Public Ivy" universities one of the 20 top public universities in the United States. The University of Florida is currently ranked fifty third among all national universities, public and private, in the current 2011 U.S. News & World Report rankings and consistently ranks within the top 100 universities worldwide Warsaw University of Life Sciences Warsaw University of Life Sciences (WULS SGGW) is the oldest agricultural university in Poland. Its history dates back to 1816, to the creation of the Institute of Agronomy in Marymont, the first agricultural institution of higher education in Poland an d onl y the fourth one in Europe. The campus of Warsaw University of Life Sciences is located in Ursynow district, in t he so uth part of Warsaw. WULS enrolls over 27 000 students, including undergraduate, graduate postgraduate and doctoral studies students. The teaching staff is over 1 200 including 340 full professors. The number of foreign students is growing, which recently accoun ted for 420. Taking into consideration demographics students, the y come from all regions of Poland with the majority from Warsaw
126 Students can choose from 28 major disciplines and 130 areas of specialization. Depending on the major, baccalaureate programs are 3 to 3.5 years in duration, and r anging programs of study from biological and technical, through medical, economics and humanities. The research and education covers the entire field of agriculture related sciences, among 13 faculties (agriculture and biology, forestry, horticulture an d landscape architecture, civil and environmental engineering, animal sciences, food sciences, wood technology, veterinary medicine, economic sciences, human nutrition and consumer sciences, production engineering, humanities, applied informatics and mathe matics), 5 interfaculty studies (biotechnology, environmental protection, regional planning, commodity science, tourism and recreation), 1 MBA program in agribusiness management and several experiment stat ions around Warsaw. WULS is well known and respecte d, both domestically and internationally. University is a member of many prestigious international organizations such as the European Universities Association (EUA), International Association of Universities (IAU), Association for European Life Science Uni versities (ICA), International Association of U niversity Presidents (IAUP), Eurol eague for Life Sciences (ELLS). WULS has the most modern university campus in Poland with excellent conditions not only for learning but also for teaching and research. Becau se of the and openness to the outside world, more and more research centers from around the world collaborate with WULS or declare their interest in establishing collabor ation.
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131 BIOGRAPHICAL SKETCH Mal gorzata Szczupska was born in 1985 in Warsaw, Poland. She received anagement from Warsaw University of Life Sciences in February of 2008. Upon completing her undergraduate degree, she continued her master studies in the same department of Interfaculty Study of Regional Planning and Management. During her final year, she moved to Belgium where she was enrolled in the framework of the Erasmus Program at the Faculty of Bioscience Engineering at Ghent University. After arriving i n Poland she earned her MSc in planning and m anagement from Warsaw University of Life Sciences in September 2009. Then s he rogram, ATLANTIS. She pursued the joint academic degree of Inte rnational Master of Science in rural d evelopment, awarded by the IMRD consortium consisting of the following partner universities: Ghent University (B elgium), Agrocampus Ouest (France), Humboldt University of Berlin (Germany), Slovak University of Agriculture in Nitra (Slovakia), University of Pisa (Italy), Wageningen University (Th e Netherlands), and the MSc in food and resource e conomics issued by the University of Florida (USA). The first semester, she studied at Ghent University, at the Department of Agricultural Economics The second semester she attended the Humboldt University of Berlin at the Faculty of Agriculture and Horticulture During July o f 2010 she did a case study in Italy at the University of Pisa. In August 2010 she moved to Gainesville, Florida, in the United States for one academic year, where she began the Master of Science in food and resource e conomics program at the University of Florida. This m thesis is the culmination of her EU US p rogram, which enabled her to gain theoretical and practical experience in the processes of rural development and food and resource economics.