Demand-pull and technology-push public support for eco-innovation: The case of the biofuels sector

The purpose of this paper is to explore the differentiated impact of demand-pull and technology-push policies in shaping technological patterns in the biofuels sector. The empirical analysis is based on a novel and original database (BioPat) containing patents in the field of biofuels selected using appropriate keywords and classified according to the technological content of the invention. Our results generally show that technological capabilities and environmental regulation spur innovative activities in the biofuels sector. Both demand-pull and technology-push factors are found to be important drivers of innovation in the biofuels sector. However, technology exploitation activities in first generation technologies are found to be mainly driven by quantity and price-based demand-pull policies. On the contrary, the pace of technology exploration efforts in advanced generation biofuels is shown to react positively to price-based demand-pull incentives but also to technology-push policy. The clear diversity in the impact of different public support instruments provides new insights which fuel discussion on the optimal policy mix debate and offers new elements for the design of future policy strategies.