Potential job creation in the cellulosic biofuel industry: the effect of feedstock price

Abstract

AbstractA large‐scale biofuel industry based on cellulosic materials would provide many new job opportunities. We model potential direct jobs generated by a cellulosic ethanol industry in the United States. These job projections are estimated via a bottom‐up approach based on the cellulosic feedstock supply chain systems as a function of the price farmers receive for the feedstock. The cellulosic feedstock types involved in the feedstock supply chain system are crop residues, perennial grasses, annual energy crops, and coppiced and non‐coppiced woody crops. Results show that the feedstock transportation sector is where most of the jobs are created, followed by the feedstock production sector. Jobs generated by the feedstock transportation sector account for around one‐third of total new jobs generated, while jobs generated by cellulosic feedstock production account for about one‐quarter of the new jobs. In the United States, most of the new jobs are created in Iowa, Kansas, Missouri, Oklahoma, and Texas. At feedstock prices over US$ 55 per dry ton, more than 100 000 new direct full‐time equivalent jobs are potentially generated. The number of jobs potentially generated by the cellulosic ethanol fuel production system is highly sensitive to the feedstock price. At $60 per ton, a 50% increase in feedstock price, the system generates over 6 times more jobs than it does at a feedstock price of $40 per ton. Many more farmers produce cellulosic feedstock for ethanol production at higher feedstock prices, and thus more ethanol production leads to more job creation. © 2015 Society of Chemical Industry and John Wiley & Sons, Ltd