The effect of feedstock cost on biofuel cost as exemplified by biomethane production from grass silage

Abstract

AbstractThe potential variance in feedstock costs can have significant implications for the cost of a biofuel and the financial viability of a biofuel facility. This paper employs the Grange Feed Costing Model to assess the cost of on‐farm biomethane production using grass silages produced under a range of management scenarios. These costs were compared with the cost of wheat grain and sugarbeet roots for ethanol production at an industrial scale.Of the three feedstocks examined, grass silage represents the cheapest feedstock per GJ of biofuel produced. At a production cost of €27/tonne (t) feedstock (or €150/t volatile solids (VS)), the feedstock production cost of grass silage per gigajoule (GJ) of biofuel (€12.27) is lower than that of sugarbeet (€16.82) and wheat grain (€18.61). Grass biomethane is also the cheapest biofuel when grass silage is costed at the bottom quartile purchase price of silage of €19/t (€93/t VS). However, when considering the production costs (full‐costing) of the three feedstocks, the total cost of grass biomethane (€32.37/GJ of biofuel; intensive 2‐cut system) from a small on‐farm facility ranks between that of sugarbeet (€29.62) and wheat grain ethanol (€34.31) produced in large industrial facilities.The feedstock costs for the above three biofuels represent 0.38, 0.57, and 0.54 of the total biofuel cost. The importance of feedstock cost on biofuel cost is further highlighted by the 0.43 increase in the cost of biomethane when grass silage is priced at the top quartile (€46/t or €232/t VS) compared to the bottom quartile purchase price. © 2011 Society of Chemical Industry and John Wiley & Sons, Ltd