The impact of energy prices on the volatility of ethanol prices and the role of gasoline emissions

The contribution of Renewable Energy Resources is vital for a country׳s economic growth by providing high efficiency in energy, as well as an effective tool for the confrontation of climate change. In particular, concerning the EU, an increase in the consumption of Renewable Energy Resources as a proportion of the total energy consumption by its member states was set as an objective until 2020. Ethanol has been widely used as a substitute to conventional energy like gasoline and oil. The present paper surveys the role of alternative energy prices and gas emissions in the formation of the ethanol prices. The results of the empirical survey confirmed the existence of a sole relationship among the variables employed. According to the results obtained, an increase in the volume of emissions or in gasoline prices results in an increase in ethanol prices while the opposite is confirmed in the case of crude oil. Τhe elasticity of ethanol prices to the increase of the emissions is another result worth mentioning, indicative of the significant role of the emissions in the formation of ethanol prices.