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

Aklesso Egbendewe-Mondzozo, Scott Swinton, Bryan D. Bals and Bruce E. Dale

No 119348, Staff Paper Series from Michigan State University, Department of Agricultural, Food, and Resource Economics

Abstract: 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.

Keywords: Crop Production/Industries; Environmental Economics and Policy; Production Economics; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Pages: 38
Date: 2011-12
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-res
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Persistent link: https://EconPapers.repec.org/RePEc:ags:midasp:119348

DOI: 10.22004/ag.econ.119348

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