Coordinated markets for furfural and levulinic acid from residual biomass: A case study in Guanajuato, Mexico

Abstract

Combustion of residual (waste) biomass represents an environmental hazard and a lost economic opportunity. The production of specialty chemicals provides a more attractive pathway to dispose of residual biomass; however, a problem that arises in recovering products from waste is that there are currently no well-established markets that bring together all stakeholders involved (e.g., biomass production, collection, transportation, and processing). In this context, coordination is essential as all the stakeholders in the supply chain (SC) depend on the revenue generated from the derived products. In this work, we propose a market coordination framework for the production of levulinic acid and furfural from lignocellulosic biomass (obtained from agricultural residues). Coordination brings a number of important economic benefits that would be difficult to achieve under existing markets (which are uncoordinated and based on peer-to-peer transactions). We demonstrate insights provided by our framework by using a case study for the State of Guanajuato in Mexico. Our results indicate that production of 330,000 tonnes per year of levulinic acid and 394,000 tonnes per year of furfural can be achieved. This constitutes 3% of the annual global demand for methyltetrahydrofuran. The SC is designed around a single biorefinery and the SC creates a total value of 3.57 billion USD per year and draws 64.65% of the available biomass supply. Our results also indicate that this market would avoid the generation of 850,000 tonnes of CO2 annually (corresponding to a 34% reduction in emissions from the combustion of agricultural residues). As such, the deployment of such a market can bring both economic and environmental benefits.