Supply Chain Management Models for the Development of Green Fuel Production from Microalgae in Iran

Abstract

Background and Objective: Environmental pollution and dependency on fossil fuels are the most important incentives for the development of biofuels in Iran. Microalgae are introduced as one of the best raw materials for the production of biofuels in the world. In addition, for the production of microalgae, the emissions from power plants are used which leads to the reduction of greenhouse gas emissions to the atmosphere. Method: This paper proposes a microalgae-based biofuel supply chain network design model to study the development of such fuels. First, a deterministic model was developed to model the all activities of the supply chain including provision of raw materials for the production of microalgae, microalgae cultivation, turning them into biofuel and eventually biofuel distribution. Then, the deterministic model was extended to a robust network design model to achieve a safe and stable supply chain decisions in the face of uncertainty. Findings: Results of using the proposed model for the development of microalgal biofuel production show that the cost biofuel production from microalgae is 88.5 thousand Rials per liter. Discussion and Conclusion: Current production cost of microalgae-based biofuel cannot compete with that of fossil fuel, but the cost can be significantly decreased with a slight increase in algae productivity or oil content in future.