Monday, May 5, 2008
10-09

Increasing Profit Margins in Biofuels Production

Yen-Shan Liu, Chemical Engineering, University of Louisiana at Lafayette, PO Box 44130, Lafayette, LA 70504-4130, Sanjeev R. Saraf, Exponent, 10899 Kinghurst Drive, Suite 245, Houston, TX 77099, and Mark E. Zappi, College of Engineering, University of Louisiana at Lafayette, PO Box 44872, Lafayette, LA 70504-4872.

The U.S. Energy Policy Act of 2005 (EPAct) requires that renewable fuels make up 4 billion gallons of the nation's gasoline market starting in 2006 and 7.5 billion gallons by 2012.  To sustain this growth, long-term biofuel feedstocks have to shift from food-stocks grown on high quality farmland to chemical crops grown on marginal land.  The biofuels industry has evolved from one where selling the product was the primary challenge to one where finding sufficient quantities of technically and economically viable feedstocks dominate as the key concern obstructing the real potential of these bio-based chemicals toward solving ever-growing global energy concerns. 

In addition, although biofuel costs are fairly constant, the cost of raw materials can increase significantly thus affecting the profitability. To reduce business risks, it is not only important to have long-term supply and sales contracts, but it is worthwhile to consider supplementary product streams that will add to the overall revenue.     

This paper will address key issues that affect the overall profitability and manufacturing lifecycle:

a) Chemical crops that are agriculturally good fits for the Southeastern U.S. from both a technical and economic basis of view

b) Processing techniques that can economically convert feedstocks into biofuels of acceptable quality and quantities

c) Manufacturing techniques that may be used to produce secondary value-added products as a means of increasing profitability


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