Biomass Supply Strategy for Building a Sustainable Cellulosic Biofuel Business

  • Rajdeep Golecha
Keywords: Corn Stover, Supply Variability, Feedstock Diversification, Biofuels, Efficient Frontier

Abstract

Companies venturing into the cellulosic biofuels business will be required to make portfolio decisions based on feedstock availability and variations in biomass supplies. Fundamental differences exist in biomass supplies for first-generation corn ethanol and second-generation cellulosic biofuels. While first-generation ethanol in the U.S. is produced primarily from corn, a tradable commodity that is transported long distances, second-generation cellulosic biofuels are produced from cellulosic biomass and there are greater limitations due to transportation distances. As a result, cellulosic biofuels producers will be exposed to local variations in biomass supplies. Studies have shown that 20-30% variations in collectable stover supply are typical. Such large variations translate into business risk and impacts issues associated with sustainability. Hence, companies venturing into cellulosic biofuels will be required to develop strategies to reduce the impact of feedstock supply variations. A sustainable biomass supply chain will need strategies for developing supply market structures, contracting programs with farmers, and a feedstock diversification program that reduces the impact of these large variations. This study focuses on identifying potential options for managers to consider when developing sustainable feedstock supply programs, and key trade-offs that help reduce costs and manage feedstock supply risks.

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Author Biography

Rajdeep Golecha

Rajdeep Golecha is an industry expert in Bioenergy. His expertise is in business portfolio development for a sustainable Biofuel business, and commercial optimization to reduce input costs. He has served as the Commercial Manager for a major energy company’s multi-billion dollar biofuel portfolio, where he led the development of Cellulosic Biofuel projects, and brought significant improvements to capital efficiency and reduction in feedstock (biomass) costs through effective feedstock supply and business strategies. His current focus is on developing optimal market structures for Cellulosic Biofuel programs.

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Published
2016-03-01
Section
Articles