The economics of cellulosic biofuels: Farm to fuel cost analysis of the supply chain

Cellulosic biofuels have become an important source of renewable energy. The 2007 Renewable Fuel Standard is to achieve 36 billion gallons in 2022, of which 16 billion gallons are cellulosic biofuels. With the force of mandate and the potential benefits, people are paying increased attention to cellulosic biofuels. However there is no commercial cellulosic biofuel plant to date and there is significant uncertainty about the costs of producing feedstocks and biofuels themselves. Economic analysis of these elements of the supply chain of cellulosic biofuels is needed to understand this uncertainty with a view towards expansion of cellulosic biofuels to meet the mandate. This research studies four feedstocks representing two types of crops: the annual crops corn stover and sorghum, and the perennial grasses switchgrass and miscanthus. Biochemical and thermochemical conversion technologies are also studied. Combining data from field experiments and existing studies in the literature, the farmgate and delivered feedstock cost, and the breakeven fuel price are obtained for each combination of feedstock and conversion pathway. This study also designs a moisture penalty charged by the biorefinery to the farmers based on the cost of drying biomass to the level required by the conversion pathways considered. Corn stover is found to be the lowest cost feedstock and the thermochemical conversion pathway costs less than the biochemical pathway. A high biomass sorghum variety and perennial grasses planted on pasture land are additional suggested feedstocks in order to meet the Renewable Fuels Standard at the lowest cost. The impacts of uncertainties associated with the parameters biomass yield and fertilization costs are found to be the most important parameters determining breakeven cost of production. In addition, the moisture content of the delivered biomass also has impact on the costs