A stochastic techno-economic analysis of aviation biofuels production from pennycress seed oil

Abstract

Much of current interest in aviation biofuels centers on trying to curb emissions of carbon dioxide and other greenhouse gases (GHGs) [1]. The problem is that the alternative aviation fuels which have been developed so far are not economically viable without policy supports and are underwhelming in regards to their environmental sustainability. The objective of this research is to identify biofuel pathways that perform better economically and environmentally than those which have been developed thus far. This paper will pursue this objective by examining the economic performance of a CH pathway fed by field pennycress under a number of possible scenarios. We conduct a stochastic discounted cash flow techno-economic analysis (TEA) of a plant designed to use catalytic hydrothermolysis (CH) technology to produce renewable diesel fuel, renewable jet fuel, and renewable naphtha from pennycress seed oil on a “greenfield” site under sixteen different scenarios defined by plant location, stage of commercialization, choice of fuel product slate, and policy environment. We combine process parameters such as conversion efficiencies, heat and water requirements, and capital costs for our model plant with stochastic projections of key input and output prices in order to model the distribution of possible financial outcomes for the plant over a twenty-year productive life. Our work follows McGarvey and Tyner (2018) in many respects, but uses updated process parameters from Applied Research Associates, Inc. (ARA), connects with economic analyses of the potential pennycress oil supply chain, and includes novel approaches to modeling key policies (US Renewable Fuel Standard, California Low Carbon Fuel Standard, and US Biodiesel Blender Tax Credit) and price series (US No. 2 diesel fuel, soybean oil, and dried distiller’s grains with solubles) [2]. Our output metrics include distributions of Net Present Values (NPVs), Probabilities of Loss (POLs), and distributions of Breakeven Prices (BEPs) for key inputs and outputs. Our results show that aviation biofuels production at a greenfield CH plant fed by pennycress seed oil is not economic under current market and policy conditions. Our breakeven metrics for a renewable jet fuel policy incentive, crude oil prices, and the input cost of pennycress oil indicate this could change if one of the following were to occur: · A crude oil price increase of at least 31-52% · A jet fuel price increase of at least 11-26% · A pennycress oil price discount of 2-6% from soybean oil prices · Some combination of the above These findings are heavily influenced by current policy design.