Implications of agricultural bioenergy crop production in a land constrained economy – The example of Austria

► With the presented model framework, the bio-physical and economic potentials of bioenergy crop production will be assessed. ► Scenarios have been constructed to analyze the consequences for land use and environment if bioenergy crop production will be expanded for production of first and second generation biofuels. ► The economic analysis considers differences of regions and site conditions, which lead to differences in opportunity costs, and hence, in higher feedstock costs. ► Promoting bioenergy crop production intensifies production and competes directly with alternative land uses to produce food and feed. Ambitious renewable energy targets have been implemented in the EU that can only be attained if further policy measures are taken to boost, among others, bioenergy production on agricultural land. The aim of this article is to explore consequences for land use, environment, and policy if bioenergy crop production will be expanded in Austria considering constrained arable land availability. In a policy experiment, we assess the bio-physical and economic production potentials of bioenergy crops and explore the trade-offs between food, feed and bioenergy crop production on arable lands in Austria. In particular, we analyze how costly it is to expand domestic bioenergy crop production by employing an integrated modeling framework using an elaborated set of bio-physical and economic data. The results indicate that an expansion of bioenergy crop production for first and second generation biofuels would imply significant adjustment costs for the agricultural sector. Furthermore, increasing feedstock production would have significant impacts on land use and fertilizer intensity levels. The economic analysis considers regional contexts and bio-physical site conditions, which should better reflect the differences in opportunity costs, and hence, lead to higher feedstock costs as estimated in previous studies. Subsidies on domestic bioenergy crop production induce higher regional food and feed prices as well as leads to higher land prices in a land constrained economy.