Renewable Identification Numbers Research Articles

Systematic analysis of co-expression network and gene expression profile of differentially expressed lncRNA-mRNA one week after spinal cord injury

Spinal cord injury (SCI) is a severe event that occurs in the central nervous system (CNS). Long noncoding RNAs (lncRNAs) have already been proven to play key roles in different diseases of the CNS. Nevertheless, the roles of messenger RNAs (mRNAs) and lncRNAs one week after SCI remain to be elucidated. We established a rat model of SCI and examined the differential levels of mRNAs and lncRNAs, and then, the differentially expressed mRNAs (DE mRNAs) and lncRNAs (DE lncRNAs) were investigated. Gene Ontology (GO) functional enrichment and Kyoto Encyclopedia of Genes and Genomes (KEGG) pathway enrichment analyses of DE lncRNAs and mRNAs were subsequently carried out to explore crucial biological processes and signaling pathways. Moreover, we constructed protein–protein interaction (PPI) networks, the STRING database, and identified the 10 high degree core nodes. We also established a co-expression network by calculating the correlation between lncRNA expression profile and mRNA expression profile. The identified DE lncRNAs and DE mRNAs may potentially be critical targets for the diagnosis and treatment of SCI in the future. Abbreviations: SCI: spinal cord injury; CNS: central nervous system; YLDs: years of life lived with disability; lncRNAs: long noncoding RNAs; mRNAs: messenger RNAs; DE: differentially expressed; GO: Gene Ontology; KEGG: Kyoto Encyclopedia of Genes and Genomes; GSEA: gene set enrichment analysis; RIN: Renewable Identification Number; PCA: principal component analysis; PPI: protein–protein interaction; MF, molecular function; BP: biological process; CC: cellular component; MCODE: molecular complex detection

Life cycle emissions and unit production cost of sustainable aviation fuel from logging residues in Georgia, United States

Production of Sustainable Aviation Fuel (SAF) has gained popularity for reducing carbon emissions from the aviation sector. To evaluate the environmental and economic tradeoffs related to SAF production and its potential use, this study estimates the life cycle carbon emissions and unit production cost of SAF produced from logging residues generated during harvest and thinning operations in Georgia, a major roundwood producing state in the Southern United States. We considered two production pathways, i.e., Ethanol-to-Jet (ETJ) and Iso-Butanol-to-Jet (Iso-BTJ), to compute the carbon savings and unit production costs. A sensitivity analysis was performed to identify significant factors contributing to the overall carbon savings and unit production costs for the selected pathways. After considering revenues generated from co-products, the minimum aviation fuel selling price (MASP) was $2.71 L-1 and $2.44 L-1 for ETJ and Iso-BTJ pathways, respectively. Capital investment cost at biorefinery accounted for most of the MASP, followed by the minimum haul rate for transporting biomass and variable cost for alcohol intermediate production. Finally, after considering tax credit from the Inflation Reduction Act of 2022 and RIN (Renewable Identification Number) credit along with co-product revenue, the MASP ranged between $2.29 L-1 and 0.83 L-1 for the ETJ pathway and between $2.04 L-1 and $0.59 L-1 for the Iso-BTJ pathway. In addition, the carbon intensity of both the ETJ and Iso-BTJ pathways were 758 g CO2e L−1 and 976 g CO2e L−1, with relative carbon savings of 70.6 % and 62.1 % compared to conventional aviation fuel. The production cost suggests a minimum abatement cost of $59 t CO2e−1 for the ETJ and -$59.3 t CO2e−1 for the Iso-BTJ pathways in the presence of federal incentives. Our study shows that logging residues-based SAF could reduce the overall carbon footprint of the aviation sector; however, policy support is needed to support its production in light of higher production costs.

Co-Production of Ethanol from Starch and Cellulose in Corn during Simultaneous Saccharification and Fermentation

First-generation (IG) ethanol production is corn starch to ethanol fermentation, and dosing cellulase at the beginning of the fermentation is termed in situ 1.5 G ethanol production. Co-production of corn starch and cellulose ethanol (1.5 G) was compared to a conventional 1G corn starch ethanol fermentation process to determine cellulosic ethanol yield. The analytical methods developed from this study for the quantitation of various modes of starch and cellulose will allow in situ 1.5 G ethanol producers to find the fraction of cellulosic ethanol eligible for D3 Renewable Identification Numbers (RINs). The fermentable starch, resistant starch (total starch minus fermentable starch), and cellulose were reduced in DDGS from 1 G to 1.5 G. Ethanol yield increased by 2% from 1G to 1.5 G. Among the 2% ethanol increase, more than half was cellulosic-based. This study developed high precision and accuracy analytical methods for quantifying various modes of starch and cellulose in corn matrix, which will allow corn ethanol manufacturers to find the fraction of ethanol eligible for the cellulosic ethanol credit.

Techno‐economic and policy analysis of hydrogen and gasoline production from forest biomass, agricultural residues and municipal solid waste in California

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).

Design of a High-Rate Wastewater Treatment Process for Energy and Water Recovery at Biorefineries

Industrial wastewaters rich in organic carbon have potential for value generation, but conventional, low-rate, anaerobic–aerobic wastewater treatment (WWT) processes often incur significant capital expenses and energy consumption. In this study, we leveraged experimental data for biorefinery-derived wastewaters to characterize the implications of transitioning from a conventional, low-rate process to a high-rate, multistage anaerobic process. We designed and simulated these WWT processes across seven first- and second-generation (1G/2G) biorefineries and evaluated the implications for biorefinery sustainability through techno-economic analysis (TEA) and life cycle assessment (LCA). Compared to the conventional design, the new process can substantially reduce capital costs and electricity usage. These improvements were particularly evident for 2G biorefineries, translating to 5%–13% lower minimum product selling prices (MPSPs) and 7%–135% lower 100-year global warming potentials (GWPs; the 135% reduction is due to the transition of one biorefinery from net emission [0.87 kg of CO2e·gal–1] to net sequestration [−0.31 kg of CO2e·gal–1]). Biorefineries could further reduce the MPSP through the renewable identification number (RIN) credits by upgrading and selling the biogas as renewable natural gas, but at the expense of increasing GWP. When normalized, the COD management cost ranged from $–56 to $465 per tonne of COD, indicating that wastewater could be a net source of revenue for some biorefineries.

The Economic Impact of a Renewable Biofuels/Energy Industry Supply Chain Using the Renewable Energy Economic Analysis Layers Modeling System

The University of Tennessee’s (UT) Department of Agricultural and Resource Economics models supply chains for both liquid and electricity generating technologies currently in use and/or forthcoming for the bio/renewable energy industry using the input–output model IMPLAN®. The approach for ethanol, biodiesel, and other liquid fuels includes the establishment and production of the feedstock, transportation of the feedstock to the plant gate, and the one-time investment as well as annual operating of the facility that converts the feedstock to a biofuel. This modeling approach may also include the preprocessing and storage of feedstocks at depots. Labor/salary requirements and renewable identification number (RIN) values and credits attributable to the conversion facility, along with land-use changes for growing the feedstock are also included in the supply chain analyses. The investment and annual operating of renewable energy technologies for electricity generation for wind, solar, and digesters are modeled as well. Recent modeling emphasis has centered on the supply chain for liquid fuels using the Bureau of Economic Analysis’s 179 economic trading areas as modeling regions. These various data layers necessary to estimate the economic impact are contained in UT’s renewable energy economic analysis layers (REEAL) modeling system. This analysis provides an example scenario to demonstrate REEAL’s modeling capabilities. The conversion technology modeled is a gasification Fischer–Tropsch biorefinery with feedstock input of 495,000 metric tons per year of forest residue transported to a logging road that is less than one mile in distance. The biorefinery is expected to produce sustainable aviation fuel (SAF), diesel, and naphtha. An estimated one million tons of forest residue are required at fifty percent moisture content. Based on a technical economic assessment (TEA) developed by the Aviation Sustainability Center (ASCENT) and the quantity of hardwood residues available in the Central Appalachian region, three biorefineries could be sited each utilizing 495,000 dry metric tons per year. Each biorefinery could produce 47.5 million liters of SAF, 40.3 million liters of diesel, and 23.6 million liters of naphtha. Annual gross revenues for fuel required for the biorefineries to break even are estimated at $193.7 million per biorefinery. Break-even plant gate fuel prices when assuming RINs and 12.2 percent return on investment are $1.12 per liter for SAF, $1.15 per liter for diesel, and $0.97 per liter for naphtha. Based on IMPLAN, an input–output model, and an investment of $1.7 billion, the estimated economic annual impact to the Central Appalachian region if the three biorefineries are sited is over a half a billion dollars. Leakages occur as investment dollars leaving the region based on the regions local purchase coefficients (i.e., LPPs), which totals $500 million. This results in an estimated $2.67 billion in economic activity with a multiplier of 1.7, or for every million dollars spent, an additional $0.7 million in economic activity is generated in the regional economy. Gross regional product is estimated at $1.28 billion and employment of nearly 1,200 jobs are created during the construction period of the biorefineries, which results in $700 million in labor income with multiplier effects. Economic activity for the feedstock operations (harvesting and chipping) is estimated at slightly more than $16.8 million resulting in an additional $30 million in the economic impact. The stumpage and additional profit occurring from the harvest of the forest residues result in $40 million directly into the pockets of the resource and logging operation owners. Their subsequent expenditures resulted in a total economic activity increase of $71.4 million. These operations result in creating an estimated 103 direct jobs for a total of 195 with multiplier effects. Direct feedstock transportation expenditures of more than $36.7 million provide an estimated increase in economic activity of almost $68 million accounting for the multiplier effects.

Pricing renewable identification numbers under uncertainty

We offer a stochastic control framework for understanding the prices dynamics of renewable identification numbers (RINs)—a market-based mechanism for enforcing renewable energy standards. Using a continuous-time formulation, we explicitly model the option value embedded in the RINs prices. We derive a closed-form solution of the RINs prices when underlying commodity prices are geometric Brownian motion (GBM). We also characterize the solution for setups with mean-reverting and jump specifications for the underlying prices, which need to be solved numerically using duality methods. Among other results, we show that the price of RINs has a U-shape relationship with the volatility of ethanol and gasoline prices and a negative relationship with the correlation between the two price processes. Our paper demonstrates a case for using quantitative finance techniques in environmental and sustainability topics.

Ethanol production in the United States: The roles of policy, price, and demand

Assessments of the impact of the U.S. renewable fuel standard (RFS) should inform consideration of future biofuels policy. Conventional wisdom suggests the RFS played a major role in stimulating the ten-fold expansion in ethanol production and consumption in the United States from 2002 to 2019, but evidence increasingly suggests the RFS may have had a smaller effect than previously assumed. Price competitiveness, federal and state policies such as reformulated gasoline requirements, and octane content in ethanol also affect ethanol market attractiveness. This study explores the roles of policy and economic factors by comparing historical data with results from scenarios simulated in a system dynamics model. Results suggest price competitiveness may explain much of the growth in the ethanol industry from 2002 to 2019. The Volumetric Ethanol Excise Tax Credit and phaseout of the oxygenate methyl tert-butyl ether contributed to earlier growth relative to expected timing of growth based on fuel price alone. The RFS (modeled through observed Renewable Identification Numbers) contributed to increased ethanol production in later years and may have increased production in the earlier years if risk of investment was decreased by the RFS Program.

Break‐even price and carbon emissions of carinata‐based sustainable aviation fuel production in the Southeastern United States

AbstractThe production of biomass‐based sustainable aviation fuel (SAF) is gaining traction to reduce the carbon footprint of the aviation sector. We performed a techno‐economic analysis to estimate the break‐even price and life cycle carbon emissions of the SAF derived from carinata (Brassica carinata) in the Southeastern United States. Carinata has the potential as a feedstock for SAF production in the selected region due to higher yield, low fertilizer use, co‐product generation (animal feed, propane, and naphtha), and compatibility with current farming practices. The system boundary started at the farm and ended when the SAF is delivered to an airport. Without co‐product credit or other subsidies such as Renewable Identification Number (RIN) credit, carinata‐based SAF was more expensive ($0.85 L−1 to $1.28 L−1) than conventional aviation fuel ($0.50 L−1). With co‐product credit only, the break‐even price ranged from $0.34 L−1 to $0.89 L−1. With both co‐product and RIN credits, the price ranged from ‐$0.12 to ‐$0.66 L−1. The total carbon emission was 918.67 g CO2e L−1 of carinata‐based SAF. This estimate provides 65% relative carbon savings compared with conventional aviation fuel (2618 g CO2e L−1). Sensitivity analysis suggested a 95% probability that relative carbon savings can range from 61% to 68%. Our study indicates that carinata‐based aviation fuel could significantly reduce carbon emissions of the aviation sector. However, current policy support mechanisms should be continued to support manufacturing and distribution in the Southeastern United States.

Assessment of the feasibility of the production of alternative jet fuel and diesel using catalytic hydrothermolysis technology: a stochastic techno‐economic analysis

AbstractThe use of renewable fuels has emerged as an important method for reducing fossil‐fuel consumption. Different pathway technologies can lead to different fuel products. The feasibility of many such pathways has been analyzed with mixed results but new technologies are being developed continuously. This study uses stochastic analysis to determine the feasibility of producing biofuels from carinata oil using catalytic hydrothermolysis (CH) technology. We perform the analysis with and without government incentive programs. We also address uncertainties in input costs and government incentives. The study analyzes a pioneer greenfield plant. The results show that the mean net present value (NPV) without government incentives is −$924.4 million. Ninety percent of the simulated NPV is between −$1040 million and −$810 million, which indicates a 100% probability of loss. The mean breakeven price of jet fuel is $4.72 gal–1. With government incentives including Renewable Identification Number (RIN) and Low Carbon Fuel Standard (LCFS), the mean NPV is $62.3, and the probability of loss is reduced to 21%, which makes the process much more financially feasible. © 2021 Society of Chemical Industry and John Wiley & Sons, Ltd

Volatility spillovers between food and fuel markets: Do administrative regulations affect the transmission?

The rapid growth of biofuel production has led to the food versus fuel dilemma, with studies showing that the use of crops as inputs drives up prices, volatility and volatility spillovers in food and fuel markets. Renewable identification numbers (RINs) are fuel credits that track and enforce compliance with U.S. renewable energy mandates, and may ameliorate price volatility disruptions and reduce spillovers. However, existing studies have largely ignored the relationship between RINs and price volatility. Using weekly spot price data over the period 2008–2018, we examine the impact of RINs on the volatility and market interdependence between the corn, ethanol, and oil markets. Through an asymmetric multivariate GARCH model, we find that the RIN market contributes to a reduction of volatility in the ethanol market, and also reduces volatility spillovers between corn and ethanol markets. Lastly, RINs weaken the market interdependence between ethanol and corn and ethanol and oil.

Renewable Identification Numbers: A Supply-Chain Risk View

Renewable Identification Numbers: A Supply-Chain Risk View

Pricing decisions in a decentralized biofuel supply chain with RIN mechanism

ABSTRACTGrowing ecological concerns has led governments to utilize mechanisms such as Renewable Identification Number (RIN) in promoting biofuels as an alternative for fossil fuels. In this paper, a pricing model in a decentralized three-player biofuel supply chain with RIN mechanism is proposed and the interaction among members is analyzed using Stackelberg game. The optimal selling price of biomass, bioethanol, and RIN are obtained by solving the proposed discrete mathematical program with equilibrium constraints (DC-MPEC) problem which is transformed into a solvable mixed integer quadratic programming (MIQP) model. Finally, a real case study in Iran is presented to show the features of the model. Sensitivity analyses are performed which lead to some managerial insights into the effect of price elasticity and government policies on profits. Moreover, an evolutionary game theory approach is applied on the case study to show the long-term behavior of the members in the proposed RIN-based pricing model.

Techno-economic analyses of solid-state anaerobic digestion and composting of yard trimmings

Solid-state anaerobic digestion (SS-AD) and composting are two potential alternatives to divert yard trimmings from landfills. This study aimed to evaluate the techno-economic feasibility of commercial-scale SS-AD and composting systems (20,000 metric tons (MT)/year) that received both yard trimmings and liquid AD effluent using a modeling software, SuperPro Designer. Both the SS-AD and composting systems were shown to be economically feasible. While their revenues were comparable ($48/MT), SS-AD with digestate drying showed a higher capital cost ($256/MT vs. $84/MT) but a lower non-facility-dependent operating cost ($11/MT vs. $21/MT) than composting. The payback time, internal rate of return (IRR), and net present value (NPV) were estimated to be ∼10 years, 8%, and $0.2 million, respectively, for SS-AD, and ∼4.9 years, 33%, and $1.8 million, respectively, for composting. Digestate drying was necessary to make SS-AD profitable via the sale of byproduct, but it was also the most energy intensive step, relying on heat recovery to reduce costs. Moreover, the economics of SS-AD were highly improved (NPV $2 million) with financial incentives (i.e. investment tax credits), indicating that incentives were critical to the economic feasibility of current SS-AD systems that utilize lignocellulosic biomass. However, renewable identification numbers (RINs) and renewable energy certificates (RECs) had minor effects. Furthermore, the economics of both systems were most sensitive to plant size, tipping fees, and byproduct/compost price. The results suggest SS-AD may be favored for centralized management while composting for de-centralized management of yard trimmings. Alternative ways to valorize digestate should be evaluated in future studies.

Could a bioenergy program stimulate electric vehicle market penetration? Potential impacts of biogas to electricity annual rebate program

AbstractThe biogas‐to‐electricity pathway under the Renewable Fuel Standard (RFS) allows for Renewable Identification Number (RIN) credits to be generated when electricity produced from biogas is used in the transportation sector. Though approved as a general pathway, EPA has proposed multiple credit allocation methods to functionalize this pathway. This study describes and evaluates a potential credit allocation framework where vehicle manufacturers generate electricity RIN (E‐RIN) credits and use these credits to increase the sales of plug‐in electric vehicles (PEVs). Under this framework, manufacturers use part of the credit value to reimburse electricity generators, offsetting potential higher biogas electricity generation cost. The remaining credit value is passed on to consumers as an annual PEV rebate to stimulate PEV sales. An iterative simulation framework is developed to fulfill two tasks: (a) to estimate the annual rebate amounts and their upfront value to consumers based on various factors, such as vehicle mileage, E‐RIN equivalence value, and biogas capacity, and (b) to evaluate potential impacts of the E‐RIN program on electrification of the future light‐duty vehicles (LDVs) and energy use. The annual rebate amount varies by vehicle technology and could be up to $870/year for battery electric vehicles (BEVs) and range between $230 and 825/year for plug‐in hybrid electric vehicles (PHEVs) depending on the electric range. These per vehicle rebates decrease when demand for electricity exceeds biogas electricity availability. The effectiveness of the program as modeled here is subject to different factors, such as the E‐RIN equivalence value, biogas electricity generation cost, biogas electricity generation capacity, and consumers’ valuation of the E‐RIN rebate. Our modeling results indicate that an E‐RIN program has the potential to produce nearly $12 billion in E‐RIN credits annually and to significantly increase PEV annual sales by up to 2.3 million and the PEV population by about 19.7 million in 2030.

Soaking in Aqueous Ammonia (SAA) Pretreatment of Whole Corn Kernels for Cellulosic Ethanol Production from the Fiber Fractions

Corn fiber is a co-product of commercial ethanol dry-grind plants, which is processed into distillers dried grains with solubles (DDGS) and used as animal feed, yet it holds high potential to be used as feedstock for additional ethanol production. Due to the tight structural make-up of corn fiber, a pretreatment step is necessary to make the cellulose and hemicellulose polymers in the solid fibrous matrix more accessible to the hydrolytic enzymes. A pretreatment process was developed in which whole corn kernels were soaked in aqueous solutions of 2.5, 5.0, 7.5, and 10.0 wt% ammonia at 105 °C for 24 h. The pretreated corn then was subjected to a conventional mashing procedure and subsequent ethanol fermentation using a commercial strain of natural Saccharomyces cerevisiae with addition of a commercial cellulase. Pretreatment of the corn with 7.5 wt% ammonia solution plus cellulase addition gave the highest ethanol production, which improved the yield in fermentation using 25 wt% solid from 334 g ethanol/kg corn obtained in the control (no pretreatment and no cellulase addition) to 379 g ethanol/kg corn (a 14% increase). The process developed can potentially be implemented in existing dry-grind ethanol facilities as a “bolt-on” process for additional ethanol production from corn fiber, and this additional ethanol can then qualify as “cellulosic ethanol” by the Environmental Protection Agency’s (EPA’s) Renewable Fuels Standard and thereby receive RINs (Renewable Identification Numbers).

Financial viability of biofuel and biochar production from forest biomass in the face of market price volatility and uncertainty

A comparative techno-economic analysis of two different thermochemical biomass conversion pathways was conducted to examine the effects of fuel price and other variables on project financial performance. Monte Carlo simulation was used to quantify the effects of uncertainty and volatility of ten critical variables: biofuel, biochar and feedstock prices, discount rate, capital investment, labor cost, loan terms, feedstock drying, and biofuel and biochar conversion rates. Market prices for biofuel and biochar have the largest impact on net present value (NPV) of any variable considered, due in part to the high levels of uncertainty associated with future prices of both. Across the ranges of input values for these variables in simulation analysis, hearth-based pyrolysis biochar production had the highest likelihood of profitability with a mean NPV of $41.5 million and only 20% of outcomes resulting in a net loss, while 68% of outcomes for auger-based biochar-biofuel coproduction represented a financial loss, including a mean NPV of -$24.2 million. However, when additional revenue from Renewable Identification Numbers (RINs) credits generated by biofuel production is considered, financial outcomes of biochar-biofuel coproduction improve to 50% likelihood of experiencing a net loss. Findings of the very strong impact of market prices on financial outcomes, relative to other important technical and economic variables, can inform effective targeting of future renewable energy policy, as well as the design of future techno-economic analyses, which do not currently focus on the effect of market prices on profitability.

Energy security role of biofuels in evolving liquid fuel markets

AbstractWe explore the role of biofuels in mitigating the negative impacts of oil supply shocks on fuel markets under a range of oil price trajectories and biofuel blending mandate levels. Using a partial equilibrium model of US biofuels production and petroleum fuels trade, we discuss the adjustments in light‐duty vehicle fuel mix, fuel prices, and renewable identification number (RIN) prices following each shock as well as the distribution of shock costs across market participants. Ethanol is used as both a complement (blend component in E10) and a substitute (in E15 and E85 blends) to gasoline. Results show that, during oil supply shocks, the role of ethanol as a substitute dominates and allows some mitigation of the shock. As US petroleum imports decrease with growing US oil production, the net economic welfare effect of sudden oil price changes and the energy security role of biofuels becomes less clear than it has been in the past. Although fuel consumers lose when oil price increases due to an external shock, domestic fuel producers gain. In some cases, depending on import share and supply and demand elasticities, we show that the gain to producers could more than offset consumer losses. However, in most cases evaluated here, sudden oil‐price increases remain costly. © 2018 Society of Chemical Industry and John Wiley & Sons, Ltd

Pricing Renewable Identification Numbers (RINs) Under Uncertainty

Renewable Identification Number (RIN) is a floor-and-trade mechanism to enforce renewable energy standards in the US transportation fuels market. Motivated by several real-world cases of gasoline producers' bankruptcy or financial stress caused by volatile RINs prices, we offer a dynamic stochastic optimization framework to determine the price behavior of RIN certificates and their connections to firms' operational decisions. One key novel aspect of our work is that we explicitly identify and model the embedded option value of RINs under various scenarios. We derive some closed-form solutions for the price dynamics of RINs, and also propose accurate numerical methods for when the closed-form solution is not available. Among other results, we show that the price of RINs has a U-shape relationship with the volatility of ethanol and gasoline prices and a negative relationship with the correlation between the two price processes. We compare the empirical performance of the model with real historical data, and find that our model allows a significant improvement over existing pricing models. We also discuss the interaction of operational features and constraints of blenders and the market price of RINs. We show how the analytic framework can be used to better inform operational decisions of firms active in markets with a floor-and-trade permit mechanism.

Economic and Environmental Analysis for Advancing Sustainable Management of Livestock Waste: A Wisconsin Case Study.

Livestock waste may cause some air quality degradation from ammonia and methane emissions, soil quality detriment due to in-excess nutrients and acidification, and water pollution issues resulting from nutrient and pathogens runoff to water bodies, which leads to eutrophication, algal blooms, and hypoxia. Despite the significant environmental benefits by performing pollution management of these organic materials, the recovery of value-added products from livestock waste is not a current practice due to the high investment costs required and to the low market values being offered for the products that are recovered. Therefore, we present a supply chain design framework to conduct simultaneous economic and environmental analysis of post-livestock organic material to value-added products. The proposed framework captures techno-economic and logistical issues and can accommodate diverse types of policy incentives obtained at federal and state levels, allowing stakeholders to conduct systematic studies on the effect of incentives on economic and environmental viability of different technologies. We apply the framework to a case study for dairy farms in the State of Wisconsin (U.S.). The framework reveals that, from a purely economic perspective, products recovered from dairy waste are not competitive at current market prices. We also find that incorporating current and potential U.S. government incentives in the form of Renewable Identification Numbers (RINs) and phosphorus credits can achieve economic viability of the recovery of liquefied biomethane and nutrient-rich products. On the other hand, current incentives for electricity generation (Renewable Energy Credits or RECs) would not achieve economic viability. The analysis also reveals that the best strategy to manage waste is to synergize the deployment of technologies that conduct simultaneous recovery of liquefied biomethane and nutrients.