Supply chain

This report provides a status of the markets and technology development involved in growing a domestic bioenergy economy. It compiles and integrates information to provide a snapshot of the current state and historical trends influencing the development of bioenergy markets. This information is intended for policy-makers as well as technology developers and investors tracking bioenergy developments. It also highlights some of the key energy and regulatory drivers of bioenergy markets. This report is supported by the U.S. Department of Energy’s (DOE’s) Bioenergy Technologies Office (BETO), and, in accordance with its mission, pays special attention to the progress and development of advanced liquid transportation fuels from cellulosic and algal biomass.

The bioenergy economy engages multiple industrial sectors across the biomass-to-bioenergy supply chain—from agricultural- and forestry-based industries that produce biomass materials, to manufacturers and distributors of biomass-based fuels, products, and power, to the ultimate end-user markets. The breadth of this report focuses on activities that occur after the production of biomass.

After opening with a discussion of the overall size and composition of the bioenergy market, this report features two major areas: one detailing the two major bioenergy markets—biofuels and biopower—and another giving an overview of bioproducts that have the potential to enable bioenergy production.

The biofuels section is broken out by fuel type with sections on ethanol, biodiesel, and hydrocarbon fuels (gasoline, diesel, and jet fuel). Ethanol includes both conventional starch ethanol and cellulosic ethanol. This report covers the development of the conventional ethanol industry as a backdrop for emerging cellulosic ethanol production, and discusses challenges with absorbing new production into the market. Hydrocarbon fuels include the developing renewable hydrocarbon biofuels market. Finally, the report offers an overview of the renewable natural gas, biopower, and bioproducts markets.

In total, the information contained in this report is intended to communicate an understanding of portions of the U.S. bioenergy market.

Indicators of the environmental sustainability of biofuel production, distribution, and use should be selected, measured, and interpreted with respect to the context in which they are used. The context of a sustainability assessment includes the purpose, the particular biofuel production and distribution system, policy conditions, stakeholder values, location, temporal influences, spatial scale, baselines, and reference scenarios. We recommend that biofuel sustainability questions be formulated with respect to the context, that appropriate indicators of environmental sustainability be developed or selected from more generic suites, and that decision makers consider context in ascribing meaning to indicators. In addition, considerations such as technical objectives, varying values and perspectives of stakeholder groups, indicator cost, and availability and reliability of data need to be understood and considered. Sustainability indicators for biofuels are most useful if adequate historical data are available, information can be collected at appropriate spatial and temporal scales, organizations are committed to use indicator information in the decision-making process, and indicators can effectively guide behavior toward more sustainable practices.

Understanding the development of the biofuels industry in the United States is important to policymakers and industry. The Biomass Scenario Model (BSM) is a system dynamics model of the biomass-to-biofuels system that can be used to explore policy effects on biofuels development. Because of the complexity of the model, as well as the wide range of possible future conditions that affect biofuels industry development, we have not developed a single reference case but instead developed a set of specific scenarios that provide various contexts for our analyses. The purpose of this report is to describe the scenarios that comprise the BSM scenario library. At present, we have the following policy-focused scenarios in our library: minimal policies, ethanol-focused policies, equal access to policies, output-focused policies, technological diversity focused, and the point-of-production- focused. This report describes each scenario, its policy settings, and general insights gained through use of the scenarios in analytic studies.

Abstract: To ensure effective biomass feedstock provision for large-scale ethanol production, a three-stage supply chain was proposed to include biomass supply sites, centralized storage and preprocessing (CSP) sites, and biorefi nery sites. A GIS-enabled biomass supply chain optimization model (BioScope) was developed to minimize annual biomass-ethanol production costs by selecting the optimal numbers, locations, and capacities of farms, CSPs, and biorefi neries as well as identifying the optimal biomass fl ow pattern from farms to biorefi neries. The model was implemented to study the Miscanthus-ethanol supply chain in Illinois. The results of the baseline case, assuming 2% of cropland is allocated for Miscanthus production, showed that unit Miscanthus-ethanol production costs were $220.6 Mg–1, or $0.74 L–1. Biorefi nery-related costs are the largest cost component, accounting for 48% of the total costs, followed by biomass procurement, transportation, and CSP related costs. The unit Miscanthus-ethanol production costs could be reduced to $198 Mg–1 using 20% of cropland, primarily due to savings in transportation costs. Sensitivity analyses showed that the optimal supply chain confi gurations, including the numbers and locations of supply sites, CSP facilities, and biorefi neries, changed signifi cantly for different cropland usage rates, biomass demands, transportation means, and pre-processing technologies. A supply chain composed of large biorefi neries with the support of distributed CSP facilities was recommended to reduce biofuels production costs. Rail outperformed truck transportation to ship pre-processed biomass. Ground biomass with tapping is the suggested biomass format for the case study in Illinois, while high-density biomass formats are suggested for long distance transportation.

Understanding the environmental effects of alternative fuel production is critical to characterizing the sustainability of energy resources to inform policy and regulatory decisions. The magnitudes of these environmental effects vary according to the intensity and scale of fuel production along each step of the supply chain. We compare the spatial extent and temporal duration of ethanol and gasoline production processes and environmental effects based on a literature review and then synthesize the scale differences on space-time diagrams. Comprehensive assessment of any fuel-production system is a moving target, and our analysis shows that decisions regarding the selection of spatial and temporal boundaries of analysis have tremendous influences on the comparisons. Effects that strongly differentiate gasoline and ethanol-supply chains in terms of scale are associated with when and where energy resources are formed and how they are extracted. Although both gasoline and ethanol production may result in negative environmental effects, this study indicates that ethanol production traced through a supply chain may impact less area and result in more easily reversed effects of a shorter duration than gasoline production.

Indicators of the environmental sustainability of biofuel production, distribution, and use should be selected, measured, and interpreted with respect to the context in which they are used. The context of a sustainability assessment includes the purpose, the particular biofuel production and distribution system, policy conditions, stakeholder values, location, temporal influences, spatial scale, baselines, and reference scenarios. We recommend that biofuel sustainability questions be formulated with respect to the context, that appropriate indicators of environmental sustainability be developed or selected from more generic suites, and that decision makers consider context in ascribing meaning to indicators. In addition, considerations such as technical objectives, varying values and perspectives of stakeholder groups, indicator cost, and availability and reliability of data need to be understood and considered. Sustainability indicators for biofuels are most useful if adequate historical data are available, information can be collected at appropriate spatial and temporal scales, organizations are committed to use indicator information in the decision-making process, and indicators can effectively guide behavior toward more sustainable practices.