Designing a Renewable Jet Fuel Supply Chain: Leveraging Incentive Policies to Drive Commercialization and Sustainability

Sajad Ebrahimi, Joseph Szmerekovsky (), Bahareh Golkar and Seyed Ali Haji Esmaeili
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Joseph Szmerekovsky: Transportation, Logistics, and Finance Department, College of Business, North Dakota State University, Fargo, ND 58108, USA
Bahareh Golkar: Department of Agribusiness and Applied Economics, North Dakota State University, Fargo, ND 58108, USA
Seyed Ali Haji Esmaeili: Department of Management, Marketing and Operations, College of Business, Embry-Riddle Aeronautical University, Daytona Beach, FL 32114, USA

Mathematics, 2023, vol. 11, issue 24, 1-20

Abstract: Renewable jet fuel (RJF) production has been recognized as a promising approach for reducing the aviation sector’s carbon footprint. Over the last decade, the commercial production of RJF has piqued the interest of airlines and governments around the world. However, RJF production can be challenging due to its dispersed supply resources. Furthermore, the production of RJF is more costly compared to producing conventional jet fuel. In this study, using a mixed integer linear programming (MILP), we design a corn-stover-based RJF supply chain network in which we obtain an optimized configuration of the supply chain and determine operational decisions required to meet RJF demand at airports. To accelerate the commercialization of RJF production, we examined four incentive programs designed to cover the supply chain’s costs, with agricultural statistics districts serving as the designated supply regions. This study is validated by employing the model to design the supply chain in the Midwestern United States. The results from this study are promising as they show the supply chain can achieve commercialization with partial financial coverage from the incentive programs. Based on the findings of this study, policymakers can devise policies to commercialize RJF production and accelerate its adoption by the industry.

Keywords: renewable jet fuel; supply chain optimization; monetary incentives; incentive policy (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
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