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Field to flight: A techno-economic analysis of the corn stover to aviation biofuels supply chain

Author

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  • Bittner, Amanda
  • Tyner, Wallace E.
  • Zhao, Xin

Abstract

This analysis focuses on aviation biofuel production using fast pyrolysis from corn stover. Cellulosic biofuels carry a lot of risks, because conversion technology is expensive. As a result, incentives are needed to reduce the risk for private investors. The issue is choosing which policy will provide the most reduction in risk, while providing a lowest cost to the government. Uncertainty is added in benefit-cost analysis to fuel price and four technical variables: capital cost, final fuel yield, hydrogen cost, and feedstock cost. We look at the impact of two policies: reverse auction and capital subsidy. For the reverse auction and capital subsidy, we used contract lengths of 5, 10, and 15 years to see the impact a longer contract could have on the probability of loss. A reverse auction reduced more risk of investment. As the contract length increased, the probability of loss and coefficient of variation in net present value were reduced substantially. When fuel price increased stochastically and a contract length of 15 years was used, the probability of loss was reduced to 18.4 percent.

Suggested Citation

  • Bittner, Amanda & Tyner, Wallace E. & Zhao, Xin, 2015. "Field to flight: A techno-economic analysis of the corn stover to aviation biofuels supply chain," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205091, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea15:205091
    DOI: 10.22004/ag.econ.205091
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    Citations

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    Cited by:

    1. Chu, Pei Lin & Vanderghem, Caroline & MacLean, Heather L. & Saville, Bradley A., 2017. "Financial analysis and risk assessment of hydroprocessed renewable jet fuel production from camelina, carinata and used cooking oil," Applied Energy, Elsevier, vol. 198(C), pages 401-409.
    2. Zhao, Xin & Yao, Guolin & Tyner, Wallace E., 2016. "Quantifying breakeven price distributions in stochastic techno-economic analysis," Applied Energy, Elsevier, vol. 183(C), pages 318-326.
    3. Perkis, David F. & Tyner, Wallace E., 2018. "Developing a cellulosic aviation biofuel industry in Indiana: A market and logistics analysis," Energy, Elsevier, vol. 142(C), pages 793-802.
    4. Zhao, Xin & Guolin, Yao & Wallace, Tyner, 2016. "Quantifying Breakeven Price Distributions in Stochastic Techno-Economic Analysis — A Case of Cellulosic Biofuel Production from Fast Pyrolysis and Hydroprocessing Pathway," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235215, Agricultural and Applied Economics Association.
    5. Shila, Jacob & Johnson, Mary E., 2021. "Techno-economic analysis of Camelina-derived hydroprocessed renewable jet fuel within the US context," Applied Energy, Elsevier, vol. 287(C).
    6. Jåstad, Eirik Ogner & Bolkesjø, Torjus Folsland & Rørstad, Per Kristian, 2020. "Modelling effects of policies for increased production of forest-based liquid biofuel in the Nordic countries," Forest Policy and Economics, Elsevier, vol. 113(C).

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