Strategic biofuel supply chain network design and techno-economic-environmental analysis for an Indian scenario

Abstract

To tackle the increasing demand, adverse environmental and financial impact of fossil fuels on Indian economy, Indian government has taken a green move towards blending of 20% bioethanol into gasoline and 20% biodiesel into diesel. A feasibility analysis of this kind of move has been studied by performing techno-economic-environmental analysis of a four-layered SCN using second generation lignocellulose bio mass as feedstock. Using supply chain flow decisions as continuous variables and the existence and connectivity between the nodes among nodes in several echelons as binary variables, overall net present value of the supply chain network is maximized using transport, storage, production and import as operating expenditure and infrastructure as capital expenditure. The overall objective function also considered the revenue generation from selling the final product and also from the carbon credits via greenhouse gas emission savings throughout the project life cycle assessment. External imports are allowed to meet the unmet demand and maintain the product quality in terms of research octane number. With ~80% increase in demand in bioethanol and ~37% increase in biodiesel over the 9-year planning horizon, a dynamically changing SC structure coming as an outcome of the aforementioned mixed integer linear programming framework shows overall ~88% increase in the newly added locations. Further analysis shows that at least 40% of the feed supply should be provided to meet the all-time demand and keep the project alive.