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Dynamic analysis of feasibility in ethanol supply chain for biofuel production in Mexico

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  • Rendon-Sagardi, Miguel A.
  • Sanchez-Ramirez, Cuauhtemoc
  • Cortes-Robles, Guillermo
  • Alor-Hernandez, Giner
  • Cedillo-Campos, Miguel G.

Abstract

Since ethanol is considered an essential additive for biofuel production, there may be the opportunity to employ it as such in Mexico. However, an analysis of the ethanol supply chain should be performed first. Therefore, in order to analyze the main variables of the ethanol supply chain, as well as the feasibility for its use, the present research developed a System Dynamics model based on an idea suggested by SENER (Secretariat of Energy in Mexico). The model explores five possible scenarios (between 2014 and 2030), and evaluates the availability of area for the sowing of sugarcane and grain sorghum crops, the production capacity for ethanol and fuel, as well as the possible reduction of carbon dioxide emissions. The model considers the trends and parameters of the agricultural and energy industries, and produces valuable information about future conditions of the Mexican biofuel and fossil fuel production and supply. The obtained results predicted two situations. First, Mexico would face a fuel shortage in the future. Second, from the amount of fuel available by that time, the biofuel produced and accumulated would collaborate little to meet the domestic fuel demand. Also, as System Dynamics is concerned, it is demonstrated that it is a powerful methodology to simulate and understand the biofuel supply chains in emerging markets as Mexico.

Suggested Citation

  • Rendon-Sagardi, Miguel A. & Sanchez-Ramirez, Cuauhtemoc & Cortes-Robles, Guillermo & Alor-Hernandez, Giner & Cedillo-Campos, Miguel G., 2014. "Dynamic analysis of feasibility in ethanol supply chain for biofuel production in Mexico," Applied Energy, Elsevier, vol. 123(C), pages 358-367.
    • Handle: RePEc:eee:appene:v:123:y:2014:i:c:p:358-367
    DOI: 10.1016/j.apenergy.2014.01.023
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    3. Armin Leopold, 2016. "Energy related system dynamic models: a literature review," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(1), pages 231-261, March.
    4. Nuñez, Hector M., 2016. "Biofuel Potential in Mexico: Land Use, Economic and Environmental Effects," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236067, Agricultural and Applied Economics Association.
    5. Adrián Bautista-Herrera & Francisco Ortiz-Arango & José Álvarez-García, 2021. "Profitability Using Second-Generation Bioethanol in Gasoline Produced in Mexico," Energies, MDPI, vol. 14(8), pages 1-16, April.
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    7. Castañeda-Ayarza, Juan Arturo & Cortez, Luis Augusto Barbosa, 2017. "Final and B molasses for fuel ethanol production and some market implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1059-1065.
    8. Qudrat-Ullah, Hassan, 2017. "How to enhance the future use of energy policy simulation models through ex post validation," Energy, Elsevier, vol. 120(C), pages 58-66.
    9. Chanthawong, Anuman & Dhakal, Shobhakar & Jongwanich, Juthathip, 2016. "Supply and demand of biofuels in the fuel market of Thailand: Two stage least square and three least square approaches," Energy, Elsevier, vol. 114(C), pages 431-443.
    10. Debnath, Deepayan & Whistance, Jarrett & Thompson, Wyatt & Binfield, Julian, 2017. "Complement or substitute: Ethanol’s uncertain relationship with gasoline under alternative petroleum price and policy scenarios," Applied Energy, Elsevier, vol. 191(C), pages 385-397.
    11. Palacio-Ciro, Santiago & Vasco-Correa, Carlos Andrés, 2020. "Biofuels policy in Colombia: A reconfiguration to the sugar and palm sectors?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    12. Ajanovic, Amela & Haas, Reinhard, 2014. "On the future prospects and limits of biofuels in Brazil, the US and EU," Applied Energy, Elsevier, vol. 135(C), pages 730-737.
    13. Setiawan, Andri D. & Dewi, Marmelia P. & Jafino, Bramka Arga & Hidayatno, Akhmad, 2022. "Evaluating feed-in tariff policies on enhancing geothermal development in Indonesia," Energy Policy, Elsevier, vol. 168(C).
    14. Eker, Sibel & van Daalen, Els, 2015. "A model-based analysis of biomethane production in the Netherlands and the effectiveness of the subsidization policy under uncertainty," Energy Policy, Elsevier, vol. 82(C), pages 178-196.
    15. Aguilar-Rivera, Noé, 2019. "A framework for the analysis of socioeconomic and geographic sugarcane agro industry sustainability," Socio-Economic Planning Sciences, Elsevier, vol. 66(C), pages 149-160.
    16. Sehatpour, Mohammad-Hadi & Kazemi, Aliyeh & Sehatpour, Hesam-eddin, 2017. "Evaluation of alternative fuels for light-duty vehicles in Iran using a multi-criteria approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 295-310.
    17. Sylvia Mardiana, 2023. "Gasoline Policy Simulation to Increase Responsiveness Using System Dynamics: A Case Study of Indonesia’s Gasoline Downstream Supply Chain," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 109-118, November.
    18. Nunez, H., 2018. "Building a Bioethanol Market in Mexico," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275921, International Association of Agricultural Economists.
    19. Becerra-Fernandez, Mauricio & Sarmiento, Alfonso T. & Cardenas, Laura M., 2023. "Sustainability assessment of the solar energy supply chain in Colombia," Energy, Elsevier, vol. 282(C).
    20. Judit Oláh & Eszter Krisán & Anna Kiss & Zoltán Lakner & József Popp, 2020. "PRISMA Statement for Reporting Literature Searches in Systematic Reviews of the Bioethanol Sector," Energies, MDPI, vol. 13(9), pages 1-35, May.
    21. Luis Armando Becerra-Pérez & Luis E. Rincón & John A. Posada-Duque, 2023. "Anhydrous Ethanol Pricing in Economies with an Underdeveloped Biofuels Market: The Case of Mexico," Sustainability, MDPI, vol. 15(9), pages 1-21, April.
    22. Zhao, Chunfu & Chen, Bin, 2014. "China’s oil security from the supply chain perspective: A review," Applied Energy, Elsevier, vol. 136(C), pages 269-279.

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