Cost and Profitability Analysis of a Prospective Pennycress to Sustainable Aviation Fuel Supply Chain in Southern USA

Abstract

This study evaluates biorefinery bio-oil feedstock costs at the plant gate for a prospective field pennycress (Thlaspi arvense L.) to sustainable aviation fuel (SAF) supply chain. The biorefinery would supply SAF to the Nashville, Tennessee international airport. Supply chain activities include pennycress production, transporting oilseed to a crushing facility, processing of oilseed into bio-oil, and transporting bio-oil to the biorefinery. The analysis shows profit potential for economic agents in the prospective supply chain. Estimated breakeven cost (profit = 0) of growing, harvesting, and transporting oilseed to a crushing facility is 17.7 ¢ kg −1 . A crushing facility can pay up to 23.8 ¢ kg −1 for pennycress oilseed during the first year of production and provide investors 12.5% annual rate of return. Therefore, a profit margin of up to 6.1 ¢ kg −1 is available for the crushing facility to induce prospective pennycress producers to supply oilseed for SAF production. However, the estimated profit margin was sensitive mainly to uncertain oilseed yields, changes in field production costs, and pennycress meal and bio-oil prices. A spatial biorefineries sitting model, the Biofuels Facility Location Analysis Modeling Endeavor, estimated that the least-cost supply chain configuration is to establish three crushing facilities located in Union City, Huntington, and Clarksville, TN, to supply bio-oil to the biorefinery, with the biorefinery sited in an industrial park about 24.14 km from the Nashville international airport aviation fuel storage. Estimated total costs of bio-oil at the biorefinery plant gate are between 83 and 109 ¢ kg −1 if crushing facility oilseed procurement costs are between 17.7 and 23.8 ¢ kg −1 for oilseed.

Farmer Interest in and Willingness to Grow Pennycress as an Energy Feedstock

“…The sample was divided into five price levels with 20% of the farmers being offered one of these price points ($0.11, $0.22, $0.33, $0.44, or $0.55/kg). The offered price or bid levels were based on estimated breakeven price ranges for pennycress [8].…”

“…these price points ($0.11, $0.22, $0.33, $0.44, or $0.55/kg). The offered price or bid levels were based on estimated breakeven price ranges for pennycress [8]. The farmers were also asked how many hectares they would produce if they agreed to the price offered and their interest in signing a contract for pennycress production.…”

“…Pennycress can be adopted as a winter cover crop to make extra profit in addition to summer cash crops. For example, pennycress can be incorporated into a two-year corn-soybean rotation that is widely used by farmers in the United States [6,8]. In addition to the economic benefit, adoption of pennycress as a winter cover crop can bring soil and environmental benefits such as increased crop residues on the soil surface, enhanced soil organic matter and moisture holding capacity, immobilization of excess nutrients in soils, and reduction of soil erosion, weeds, pests, and GHG emissions [6,8,9].…”

“…The favorable oil characteristics and prolific yields of oilseeds make pennycress a feedstock that can be processed into biofuel efficiently and sustainably. Due to those properties, pennycress meets the feedstock requirements for biodiesel production under the United States American Society for Testing and Materials D6751 regulation [6,8,[13][14][15]. Harvested oilseeds from pennycress can be crushed and processed into an oil to be converted into a hydroprocessed esters and fatty acids fuel for the aviation industry [6].…”

Biofuel Discount Rates and Stochastic Techno-Economic Analysis for a Prospective Pennycress (Thlaspi arvense L.) Sustainable Aviation Fuel Supply Chain

“…Tanzil et al (2021) found that hydroprocessed esters and fatty acids (HEFA) is the most competitive current technology for SAF production compared to five lignocellulosebased technologies evaluated. While SAF production volume in the US is still limited, several biorefineries are producing it at demonstration, pilot, and commercial scale (Trejo-Pech et al, 2019;Khanal and Shah, 2021;Tanzil et al, 2021). One of the current challenges is to produce SAF at prices competitive with fossil-based jet fuel.…”