Abstract
Large-scale implementation of forest-based biofuel production will have an impact on biomass prices, something which in turn will affect biofuel production costs. The profitability of emerging biofuel production technologies is usually assessed using techno-economic or market approaches. While techno-economic approaches have a detailed description of technologies within plant-level or supply chain system boundaries, they build on exogenously given static biomass prices. Conversely, market approaches have a consistent description of the economic system including market interactions for prices within local or national boundaries, but they generally lack technological depth. This paper combines these two approaches using an iterative framework for a case study optimising the production cost of liquefied biomethane (LBG) using different configurations of sawmill-integrated biomass gasification.Cost estimates are developed using system boundaries surrounding a LBG production plant, and the Swedish national borders, reflecting the plant-owner and policymaker perspectives, respectively. The results show that different plant configurations are favoured depending on the choice between minimising the biofuel production cost for the plant-owner or for the policymaker. Market dynamics simulated by the iterative procedure show that a direct policy support of 36–56 EUR/MWh would be needed to sustain large-scale LBG production, which is 12–31% higher than the necessary policy support estimated based on static biomass prices.
Highlights
Producing bio-synthetic natural gas (Bio-SNG) by gasification of forest residues is an economically viable option for manufacturing bio fuels with high efficiency [1]
The paper aims to estimate what levels of support that would be required when the biomass market has been affected by the large-scale implementation, which corresponds to the policy support necessary to maintain a large-scale biofuel production
We applied the interdisciplinary soft-linking framework presented by Zetterholm, Bryngemark, and Ahlstrom [25], which considers the biomass market impacts of introducing large-scale biofuel production
Summary
Producing bio-synthetic natural gas (Bio-SNG) by gasification of forest residues is an economically viable option for manufacturing bio fuels with high efficiency [1]. The economic case is enhanced further if Bio-SNG production is feedstock and heat-integrated with a sawmill [2,3,4]. Investments in large-scale forest-based biofuel production have been rare, partly explained by uncertainties in future market prices, policy support, and technology costs [5,6,7]. These factors reduce investment likelihood as low-risk projects are preferred [8,9]. Of particular impor tance is biomass cost risk [1,8], which can constitute 10–28% of forest-based biofuel production cost [7]
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