Wood and Charcoal Production in the Kiln-Furnace System: How Do the Costs and Revenues Variation Affect Economic Feasibility?

Abstract

Traditional methods of economic evaluation of wood and charcoal production projects are based on indicators analysis, however, they are subject to market variations and uncertainties. The study was carried out in the city of Lamim, Minas Gerais State, to evaluate the economic viability of wood and charcoal production using the kiln-furnace system, due to the need to know the economic viability of this new production system. Sensitivity analysis using the Monte Carlo technique was performed on costs and revenues. The wood and charcoal production cash flow was elaborated and the following criteria were used in the economic analysis: Net Present Value (NPV), Benefit-Cost Ratio (BCR), Equivalent Periodic Value (EPV), and Internal Return Rate (IRR). The wood and charcoal production sensitivity analysis was carried out using the software @RISK, according to the VPE parameter, which allows comparing projects with different durations. Wood production was economically viable, with NPV of $40.26 ha-1 and EPV of $ 16.80 ha-1, with an average production cost of $13.51 m3 wood-1. The EPV mean value found in the sensitivity analysis was $18.33 ha-1. The charcoal production was economically viable, with NPV of $4.43 mdc charcoal-1 and EPV of $3.52 mdc charcoal-1. The EPV mean value found in the sensitivity analysis was $9.80 mdc charcoal-1. It was possible to conclude that the wood and charcoal production are economically viable in the region.

Charcoal Production Systems from Smallholder Plantation implications on Carbon Emission and Sustainable Livelihood Benefits in North Western Ethiopia

“…But the higher net present values were recorded from Casamance kiln (117126.9 ETB year − 1 ). This could be due to the kiln cost (GMDR = 48333 ETB vs Casamance = 15000 ETB) and the short carbonization time observed at Casamance improved kiln leads to frequent charcoal production per year compared to the other kilns used in our study (Ribeiro et al, 2020;Schettini et al, 2021). E ciency and annual equivalent income show similar trends for both MRV steel and traditional earth mound kilns.…”

“…E ciency and annual equivalent income show similar trends for both MRV steel and traditional earth mound kilns. Improved charcoalmaking kilns generate charcoal at considerably lower nancial and economic costs per unit of wood with higher nancial bene ts (Schettini et al, 2021;Swami et al, 2009). The study by (Oliveira et al, 2014) revealed for the same amount of charcoal produced, wood consumption was 20% lower with the kiln furnace system than with the "hot tail" type, which improved cash ow and economic outcomes and increased pro tability by 16.4%…”

Desempenho ambiental e energético da produção de carvão vegetal para uso doméstico no Brasil

“…Segundo Schettini et al (2021), métodos tradicionais de avaliação econômica de projetos que utilizam madeira e produzem carvão vegetal estão sujeitas as variações e incertezas de mercado. Porém, são importantes ferramentas para identificação da viabilidade do empreendimento (BELCHIOR et al, 2017).…”