Simulation for assessing the liberalization of biofuels

In this context, and given multiple uncertainties that include technology evolution and fuel prices, scenario analysis has been considered for the examination of different, extreme, though plausible, futures. Simulations, under extreme scenarios, helped in assessing the possibility of removing incentives (that is, leaving decisions to an open market) and a partial reduction of subsidies. This paper concludes that for the case of Colombia, the potential of biofuels seems promising.