Can Dispersed Biomass Processing Protect the Environment and Cover the Bottom Line for Biofuel?

This paper compares environmental and profitability outcomes for a centralized biorefinery for cellulosic ethanol that does all processing versus a biorefinery linked to a decentralized array of local depots that pretreat biomass into concentrated briquettes. The analysis uses a spatial bioeconomic model that maximizes predicted profit from crop and energy products, subject to the requirement that the biorefinery must be operated at full capacity. The model draws upon biophysical crop input-output coefficients simulated with the EPIC model, as well as input and output prices, spatial transportation costs, ethanol yields from biomass, and biorefinery capital and operational costs. The model was applied to 82 cropping systems simulated across 37 sub-watersheds in a 9-county region of southern Michigan in response to ethanol prices simulated to rise from $1.78 to $3.36 per gallon. Results show that the decentralized local biomass processing depots lead to lower profitability but better environmental performance, due to more reliance on perennial grasses than the centralized biorefinery. Simulated technological improvement that reduces the processing cost and increases the ethanol yield of switchgrass by 17% could cause a shift to more processing of switchgrass, with increased profitability and environmental benefits.


Issue Date:
2011-12
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/119348
Total Pages:
38
JEL Codes:
Q16; Q15; Q57; Q18
Series Statement:
Dept. of Agricultural, Food, and Resource Economics>Staff Paper Series
2011-15




 Record created 2017-04-01, last modified 2017-08-26

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