Cellulosic biorefinery portfolio and diversification: Strategies to mitigate cellulosic biorefinery risks in US Corn Belt
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2016 Several studies have highlighted that one of the largest risks with cellulosic biorefinery investments are year-to-year variability in cellulosic biomass quantity available. Yet, strategies to mitigate these risks in biofuel development are less understood. In the absence of strategies to minimize the impact due to these variations, both biorefineries and farmers venturing into the cellulosic biofuel arena will be significantly exposed. Studies have been done on using engineering approaches, such as biomass pre-treatment and storage to address biomass supply variations. Recent studies have provided market structure and contracting strategies to manage biomass supply risks. However, storage, pre-treatment and similar engineering approaches lead to higher costs and has other limitations such as additional infrastructural requirements. There is a gap in understanding the use of feedstock (biomass) diversification and portfolio strategies to mitigate such risks. In this study a portfolio approach is developed and applied to the case of the US Corn Belt, considering various types of cellulosic biomass including corn stover, wheat straw, and switchgrass. It is found that feedstock diversification mitigates up to 40% of feedstock supply variations, while biorefinery diversification can mitigate up to 70% of feedstock supply variations although it is constrained by current cropland use patterns in the region. Overall, diversification and portfolio strategies present an effective way for mitigating risks associated with feedstock supply variations.
