Solid Biofuels Scenarios from Rural Agricultural and Forestry Residues for Mexican Industrial SMEs

In Mexico, as in the rest of the world, the industry sector is frequently highly dependent on fossil fuels; in addition, energy transformation processes are not very efficient and scarcely oriented towards climate change mitigation. Given these facts, solid biofuels (SBFs) from agricultural and forestry residues from rural areas may represent an alternative that contributes to the decarbonization of the industrial sector, especially in Small- and Medium-Sized Enterprises (SMEs). From an economic and climate change mitigation perspective, this study evaluates harnessing SBFs in SMEs related to lime, bricks, dairy products, craft beer, and artisanal mezcal (a well-known Mexican distilled alcoholic beverage), products mainly manufactured in rural areas of Mexico. For each of these SMEs, we constructed two energy consumption scenarios that span from 2018 to 2050. On the one hand, a baseline scenario (BS) that reflects the behaviour of historical energy consumption in Mexico and, on the other hand, an alternative scenario (AS) that proposes the use of SBFs with modern and efficient technologies and sustainable inputs of agricultural and forestry residues originated mainly from rural areas. According to our results, a comparison between the two scenarios reveals that two out of five SMEs industrial niches studied, appear with mitigation costs in the AS namely brick kilns, and limekilns SMEs that have mitigation costs of 9.99 and 19.74 USD/tCO 2e , respectively, primarily due to the high investment cost of the new MK2 kilns and the relatively high cost of pellets, respectively. Since these niches have high mitigation potentials (7.77 MtCO 2e for brick kilns and 2.83 MtCO 2e for limekilns), their implementation requires adequate incentives and financing. On the contrary, the dairy, craft beer, and mezcal SMEs niches have negative mitigation costs (−14.30, −10.68, −0.98) USD/tCO 2e , mainly due to the high savings in the cost of fossil fuels and their materialization, especially for the mezcal niche which has a mitigation potential of 2.97 MtCO 2e , requires only an adequate regulatory and normative framework. We conclude that using commercial SBFs (pellets, briquettes, and traditional firewood) in SMEs niches contribute to generating formal markets with adequate distribution channels, both for SBFs and sustainable residual biomass inputs (residual firewood, agave bagasse, and spent barley grain). This alternative scenario also promotes the creation of green jobs in agricultural and forestry areas, adding an economic value to residual biomass inputs not previously considered and contributing to the social development of rural areas.