ECONOMIC ASPECT OF BIOFUEL PRODUCTION - unifg.it .ECONOMIC ASPECT OF BIOFUEL PRODUCTION Bioethanol

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ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Energy production from biomass in the EU

CONTENTCONTENT

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Background about biofuels production

Introduction Economic Aspect

supply chain for biofuel

Economic aspect: Bioethanol & BiodieselBiogas

INTRODUCTIONINTRODUCTION

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

BACKGROUND ABOUT BIOFUELS PRODUCTION

INTRODUCTIONINTRODUCTION

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

BACKGROUND ABOUT BIOFUELS PRODUCTION

GENERATION FEEDSTOCK EXAMPLE

First generation biofuelsSugar, starch, vegetable

oils, or animal fatsBioalcohols, vegetable oil,

biodiesel, biosyngas, biogas

Second generation biofuels

Non food crops, wheat straw, corn, wood, solid

waste, energy crop

Bioalcohols, bio oil, biogydrogen, bio fisher tropsh diesel, wood

dieselThird generation

biofuelsAlgae Vegetable oil, biodiesel

Fourth generation biofuels

vegetable oil, biodiesel Biogasoline

Table 1. Classification of biofuels based on their production technologies

INTRODUCTIONINTRODUCTIONEVALUATION OF BIOFUELS

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

INTRODUCTIONINTRODUCTIONEVALUATION OF BIOFUELS

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

ENVIRONMENTALENVIRONMENTAL

Greenhouse gas reductionsReducing of air pollutionBiodegradabilityCarbon sequestration

INTRODUCTIONINTRODUCTIONEVALUATION OF BIOFUELS

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

ENERGY SECURITYENERGY SECURITY

Domestic TargetsSupply reliabilityReducing use of fossil fuelsRenewability

INTRODUCTIONINTRODUCTIONEVALUATION OF BIOFUELS

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Sustainability Increased number of rural manufacturing

jobs Increased income taxes Agricultural development International competitiveness Reducing the dependency on imported

petroleum

ECONOMICSECONOMICS

INTRODUCTIONINTRODUCTIONECONOMIC ASPECT

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Feedstock costinvestment costsfixed and variable costdistribution and retail costspolicies

ECONOMICSECONOMICS

INTRODUCTIONINTRODUCTIONTHE IMPACT OF FEEDSTOCK

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Figure 1. Feedstock price development over the period 1996-2009

INTRODUCTIONINTRODUCTIONSUPPLY CHAIN FOR BIOFUEL

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

INTRODUCTIONINTRODUCTIONSUPPLY CHAIN FOR BIOFUEL

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Feedstock Production: comprises the cultivation of biomass resources such as corn, crop residues, and woody residues used as raw material inputs for biofuels production.

Feedstock Logistics: consists of harvesting or collecting feedstock from the area of production, processing it for use in biorefineries, storing it between harvests, and delivering it to the plant gate.

Conversion: This is an industrial activity in which the raw biomass is converted into biofuel along with one or more co products.

Distribution and retailing of finished fuels: This involves distribution of finished fuel for blending with fossil fuels. In the case of electricity, this involves the transmission and distribution of electricity to demand centers.

Consumption of bioenergy: This refers to the ultimate end use in which the biofuel enters the fuel tank of a vehicle or provides electricity

INTRODUCTIONINTRODUCTIONSUPPLY CHAIN FOR BIOFUEL

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Liquid Biofuels

Bioethanol

Biodiesel

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Liquid BiofuelsBioethanol

Feedstock costs Production costs Taxation Bioethanol vs.

Convetional fuels

Bioethanol in other countries

Biodiesel

Feedstock costs Production costs Taxation Biodiesel vs. diesel Biodiesel in other

countries

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Bioethanol

2nd Generation of Biofuels lignocellulosic materials

such as woody biomass and waste residues from forestry.

1st Generation of Biofuels starch (cereal) crops,

such as corn, wheat, barley and rye

sugar cropssuch as sugar cane, sugar beet and sweet sorghum.

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Bioethanol production chainDepending on the biomass source the steps generally include:1. Storage2. Crushing and juice extraction3. Dilution4. Hydrolysis for starch and woody biomass5. Fermentation with yeast and enzyme6. CO2 storage and ethanol recapture7. Evaporation8. Distillation9. Waste water treatment10. Fuel Storage

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

BioethanolBioethanol Production from

lignocellulosic materials

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Bioethanol

Limiting factors of the bioethanol industry:

feedstock prices bioethanol production costs oil prices taxation of energy products

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Bioethanol

Feedstock Prices

(Techno-economic analysis of Bio-alcohol production in the EU of 2002)

Euro/1000 L Bioethanol

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

BioethanolProduction Costs

The production cost for sugar beet takes advantage fromthe existing sugar and alcohol industry, so that the processing costs are the lowest.

Two salient facts have to be underlined:-The most important share in the final cost calculations is attributable to the procurement costs of bio-mass. -The second salient fact is that the processing cost for straw is rather high.

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Bioethanol

In the following table an estimated cost of bio-ethanol production is presented.

Production Costs

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Bioethanol

Important factors: The number of chemicals that are produced in the ethanol industry Potentially even more in the 2nd generation bio-ethanol industry, serving a wide range of uses in the pharmaceuticals, cosmetics, beverages and medical sectors as well as for industrial uses. The market potential for bioethanol is therefore not just limited to transport fuel or energy production but has potential to supply the existing chemicals industry

Production Costs

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

BioethanolTaxation

Bio-ethanol reduction costs are given according to the linear relationship:

Cost = 108 + 2.86*WP

where WP stands for wheat price.

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Bioethanolvs. Conventional fuels One of the biggest barriers to large-scaledevelopment of biofuels remains their higher economic costs compared to conventional fuels.Estimates show that bioethanol in the EU becomes competitive when the oil price reaches US$ 70 a barrel while in the US it becomes competitive at US$ 50 - 60 a barrel. For Brazil the threshold is much lower between US$ 25 and US$ 30 a barrel.

There are also differences depending on the feedstock used. The current high oil prices mean that biofuels production have become competitive in some parts of the world.

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Bioethanol

- Sugar cane ethanol in Brazil costs $0.30/lge free-on-board (FOB). Thiscost is competitive with that of gasoline at oil prices of $40-$50/bbl ($0.3-$0.4/lge). In other regions, costs can be more than $0.40- $0.50/lge, although potential exists for cost reduction.

- Ethanol from maize, sugar-beet and wheat cost around $0.6-$0.8/lge(excl. subsidies), potentially reducible to $0.4-$0.6/lge.

- Ligno-cellulosic ethanol currently costs around $1.0/lge at the pilot scale,assuming a basic feedstock price of $3.6/GJ for delivered straw (whereas cereals for ethanol production may cost $10-$20/GJ). The cost is projected to halve in the next decade with process improvement, scaling up of plants, low-cost waste feedstock and co-production of other by-products (bio-refineries).

Different countries

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

BioethanolDifferent countries

The production costs for firts-generation ethanol in Brazil, the United States and Europe.

ECONOMIC ASPECT OF BIOFUEL PRODUCTIONECONOMIC ASPECT OF BIOFUEL PRODUCTION

Biodiesel

Different bio-diesel types:

Esterificated oilsNon esterificated oilsWaste vegetable oil

The most common bio-diesel technology uses the so-called "transesterification" technique, a process that combines oils and fats with mono-alcohols in the presence of a base cata