Profit and policy implications of producing biodiesel–ethanol–diesel fuel blends to specification

Jiefeng Lin, Gabrielle Gaustad and Thomas A. Trabold

Applied Energy, 2013, vol. 104, issue C, 936-944

Abstract: A nonlinear optimization model is developed in this work to analyze biodiesel–ethanol–diesel (BED) ternary blending processes. The model establishes optimal blends to improve the system profitability given production costs, market demand, and fuel prices while meeting multiple property criteria such as kinematic viscosity, density, lower heating value, cloud point, cetane number, fuel stability and sulfur content. Pertinent fuel mixing rules for predicting the fuel properties of BED blends were extrapolated from previous works and applied as constraints to the present model. Several dynamic and/or uncertainty factors were explored in further depth to quantify their impacts on the fuel composition of BED blends including petro-diesel supply reduction, diesel production cost, diesel blends market retail price, and policy changes on bio-fuel subsidies. By examining key optimization sensitivity analysis such as shadow prices and opportunity costs, the crucial limits or constraints on fuel specifications can be identified and used to proactively identify and promote the development of potential additives. The model also suggests the government policy of simultaneously implementing bio-fuel tax credits and mandates may not have a higher contribution to promoting bio-fuel production than the case only with tax credits for the firms with the goal of profit maximization. The firms enable 5–8% increase of the optimal profit from BED blends by utilizing ethanol derived from food waste feedstocks instead of edible biomass.

Keywords: Biodiesel–ethanol–diesel blends; Diesel blends; Bio-fuel blends; Multi-criteria optimization; Fuel mixing rule (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0306261912008525
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:appene:v:104:y:2013:i:c:p:936-944

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/bibliographic
http://www.elsevier. ... 405891/bibliographic

DOI: 10.1016/j.apenergy.2012.11.049

Access Statistics for this article

Applied Energy is currently edited by J. Yan

More articles in Applied Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().