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Cost-Effectiveness of Lignocellulose Biorefineries and their Impact on the Deciduous Wood Markets in Germany

  • Sorda, Giovanni

    ()

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Madlener, Reinhard

    ()

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Biorefineries, especially if based on woody biomass, may cause significant changes to the forest and wood-based industry. The resulting changes may, in turn, affect the economic feasibility of lignocellulosic biofuels production. In this article, we introduce a spatial partial equilibrium model of the forest and wood processing industries in Germany. The wood market model is linked to the Reaction Network Flux Analysis (RNFA), a model for the systematic selection of reaction pathways in the preliminary evaluation of the mass balance of innovative biofuel components. In doing so, we can simulate the impact of wood-based biorefineries on their feedstock markets and also assess the economic feasibility of the proposed production process. In a case study based on the transformation of beech wood to methyltetrahydrofuran (MTHF), a potential biofuel component currently under development, we show how the net present value of lignocellulosic biorefineries of various sizes is completely reversed once the wood market’s response to the entry of a new high-volume consumer is taken into account.

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Paper provided by E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN) in its series FCN Working Papers with number 8/2012.

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Length: 35 pages
Date of creation: Sep 2012
Date of revision:
Handle: RePEc:ris:fcnwpa:2012_008
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  1. Solow, Robert M, 1974. "The Economics of Resources or the Resources of Economics," American Economic Review, American Economic Association, vol. 64(2), pages 1-14, May.
  2. He, Jie & Zhang, Wennan, 2011. "Techno-economic evaluation of thermo-chemical biomass-to-ethanol," Applied Energy, Elsevier, vol. 88(4), pages 1224-1232, April.
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  4. Maung, Thein A. & Gustafson, Cole R., 2010. "The Economic Feasibility of Sugarbeet Biofuel Production in Central North Dakota," Agribusiness & Applied Economics Report 95745, North Dakota State University, Department of Agribusiness and Applied Economics.
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  9. Lyon, Kenneth S., 1981. "Mining of the forest and the time path of the price of timber," Journal of Environmental Economics and Management, Elsevier, vol. 8(4), pages 330-344, December.
  10. Leistritz, F. Larry & Senechal, Donald M. & Stowers, Mark D. & McDonald, William F. & Saffron, Chris M. & Hodur, Nancy M., 2006. "Preliminary Feasibility Analysis For An Integrated Biomaterials And Ethanol Biorefinery Using Wheat Straw Feedstock," Agribusiness & Applied Economics Report 23500, North Dakota State University, Department of Agribusiness and Applied Economics.
  11. Berck, Peter, 1981. "Optimal management of renewable resources with growing demand and stock externalities," Journal of Environmental Economics and Management, Elsevier, vol. 8(2), pages 105-117, June.
  12. Dug Lee & Kenneth Lyon, 2001. "A dynamic analysis of the global timber market under global warming: an integrated modeling approach," Working Papers 2001-11, Utah State University, Department of Economics.
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