Biodiesel is one kind of biodegradable fuel. Substituting fossil diesel with biodiesel can reduce air emissions, increase the domestic energy supply, and create new markets for farmers. Further, generating biodiesel from energy crops cultivated on polluted farmlands can provide a solution for re-using polluted farmlands. This paper investigates the characteristics and benefits of biodiesel and its current status and development potential in Taiwan, identifies barriers to the adoption of biodiesel, and formulates key policy measures to achieve the target (i.e., 100 million liters per year by 2010 and 150 million liters by 2020) of the 2nd National Energy Conference. The results of this study show that the potential annual output of biodiesel can amount to 233-285 million liters, meaning that the goal of the second National Energy Conference could be achieved. However, there are many barriers to the practical adoption of biodiesel. Many issues (such as acquiring material sources, establishing a recycling system, defining economic and legal measures, and improving public acceptance and inter-ministry coordination mechanisms) must still be addressed to actively promote biodiesel utilization.
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