AbstractTechno‐economic and policy analyses were performed of hydrogen and gasoline production from forest biomass (FB). They were compared with fuels produced using agricultural residues and municipal solid waste in California. Twelve process designs were analyzed, with and without carbon capture and storage, and life‐cycle analysis was performed, using California's Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) 3.0 model, to calculate the average life‐cycle carbon intensity of different process designs for hydrogen and gasoline. Discounted cash flow models were developed to assess profitability in terms of the net present value and internal rate of return (IRR). The results showed that forest‐to‐fuel pathways (positive IRR between 2%−16%) were the least competitive biomass‐based pathway option. Sensitivity analysis was performed on economic parameters including feedstock price and renewable identification number (RIN) credit price. In the case of RIN credits, profitability declined significantly as the proportion of FB from federal lands increased given existing statutory limitations. Given the importance of increasing forest management to reduce wildfire risks, the necessary additional policy incentives were quantified to equalize the cost of forest‐to‐fuels pathways with the other biofuels pathways. To ensure FB‐to‐fuels pathways are cost competitive with agricultural residues, policymakers could increase the low carbon fuel standard (LCFS) credit price for forest fuels (additional credit price support of $41–75 t/CO2e), give additional credit to lifecycle emissions reductions from forest fuels (additional carbon intensity decrease of 19–76 gCO2e MJ−1), provide concessionary debt or equity with a target weighted average cost of capital (WACC) = 3–4%, subsidize capital costs (12–22% of costs), or subsidize FB delivery ($35–66 per dry ton delivered).
Read full abstract