Quantifying drivers’ acceptance of renewable fuel standard: Results from a choice experiment in South Korea

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Quantifying drivers’ acceptance of renewable fuel standard: Results from a choice experiment in South Korea

Huh, Sung-Yoon / Kwak, Donghwan / Lee, Jongsu / Shin, Jungwoo

Highlights • Korean customers’ preferences for RFS were analyzed with a mixed logit model. • Drivers’ acceptance of RFS according to levels of the attributes was quantified. • Increased fuel price was the most influential attribute on acceptance level. • Other attributes had little impact on acceptance level. • The benefit and cost of RFS implementation was also examined.

Abstract The production and use of renewable fuels in the transport sector are rapidly increasing. Renewable fuel standard (RFS) is a strong regulatory component and quantitative policy expected to have a significant market impact. In Korea, RFS implementation was agreed upon in July 2013 and will be enforced beginning in July 2015. Drivers’ acceptance is the most important consideration for RFS introduction and sustainable implementation. This study analyzed Korean customer preferences for RFS and quantified their acceptance level according to policy design. A choice experiment was analyzed with a mixed logit model to reflect the heterogeneity of respondents’ preferences. Respondents were relatively sensitive to the price increase, while other attributes had little effect on acceptance of RFS. Differences between the influences of attributes on drivers’ acceptance should be considered when designing RFS implementation. Furthermore, it is recommended that the price of transportation fuels should be limited to an increase between KRW 10 and 20/liter (USD 8.879×10⁻³ and 1.776×10⁻²/liter) to ensure high acceptance level, secure a budget for infrastructure, and achieve substantial environmental improvement.