Modeling biomass procurement tradeoffs within a cellulosic biofuel cost model

Alicia Rosburg, John Miranowski and Keri Jacobs

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: We develop a long-run cellulosic biofuel cost model that minimizes feedstock procurement and processing costs per gallon. The distinguishing feature of the model is that it accounts for the procurement tradeoff between the intensive margin (biomass producers' participation rate) and extensive margin (biomass capture region). To investigate the extent to which this procurement tradeoff affects processors' cost-minimizing decisions, we apply the model to switchgrass ethanol production in U.S. crop reporting districts. Results suggest that location characteristics will determine the extent to which processors can reduce their total procurement costs by offering a higher biomass price to increase participation near the plant and reduce transportation costs.

Date: 2016-08-01
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Related works:
Journal Article: Modeling biomass procurement tradeoffs within a cellulosic biofuel cost model (2016)
Working Paper: Modeling biomass procurement tradeoffs within a cellulosic biofuel cost model (2015)
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