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Evaluating the Economic Viability of Agricultural Pellets to Supplement the Current Global Wood Pellets Supply for Bioenergy Production

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  • Mahmood Ebadian

    (Department of Chemical & Biological Engineering, University of British Columbia, 2360 East Mall, Vancouver, BC V6T 1Z3, Canada)

  • Shahab Sokhansanj

    (Department of Chemical & Biological Engineering, University of British Columbia, 2360 East Mall, Vancouver, BC V6T 1Z3, Canada)

  • David Lee

    (Agriculture and Agri-Food Canada, 2010 12th Avenue, Regina, SK S4P 0M3, Canada)

  • Alyssa Klein

    (Agriculture and Agri-Food Canada, 2010 12th Avenue, Regina, SK S4P 0M3, Canada)

  • Lawrence Townley-Smith

    (Agriculture and Agri-Food Canada, 2010 12th Avenue, Regina, SK S4P 0M3, Canada)

Abstract

In this study, an inter-continental agricultural pellet supply chain is modeled, and the production cost and price of agricultural pellets are estimated and compared against the recent cost and price of wood pellets in the global marketplace. The inter-continental supply chain is verified and validated using an integration of an interactive mapping application and a simulation platform. The integrated model is applied to a case study in which agricultural pellets are produced in six locations in Canada and shipped and discharged at the three major ports in Western Europe. The cost of agricultural pellets in the six locations is estimated to be in the range of EUR 92–95/tonne (CAD 138–142/tonne), which is comparable with the recent cost of wood pellets produced in small-scale pellet plants (EUR 99–109/tonne). The average agricultural pellet price shipped from the six plants to the three ports in Western Europe is estimated to be in a range of EUR 183–204 (CAD 274–305/tonne), 29–42% more expensive that the average recent price of wood pellets (EUR 143/tonne) at the same ports. There are several potential areas in the agricultural pellet supply chains that can reduce the pellet production and distribution costs in the mid and long terms, making them affordable supplement to the existing wood pellet markets. Potential economic activities generated by the production of pellets in farm communities can be significant. The generated annual revenue in the biomass logistics system in all six locations is estimated to be about CAD 21.80 million. In addition, the logistics equipment fleet needs 176 local operators with a potential annual income of CAD 2.18 million.

Suggested Citation

  • Mahmood Ebadian & Shahab Sokhansanj & David Lee & Alyssa Klein & Lawrence Townley-Smith, 2021. "Evaluating the Economic Viability of Agricultural Pellets to Supplement the Current Global Wood Pellets Supply for Bioenergy Production," Energies, MDPI, vol. 14(8), pages 1-19, April.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:8:p:2263-:d:538129
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    References listed on IDEAS

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    1. Mariusz Jerzy Stolarski & Paweł Dudziec & Ewelina Olba-Zięty & Paweł Stachowicz & Michał Krzyżaniak, 2022. "Forest Dendromass as Energy Feedstock: Diversity of Properties and Composition Depending on Systematic Genus and Organ," Energies, MDPI, vol. 15(4), pages 1-60, February.

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