Opportunity cost of several methods for determining forest biomass terminal locations in Northern Sweden

Abstract

Long distance transportation of forest biomass is often unavoidable because the biomass is dispersed over large land areas. This is a problem that limits the development of biorefineries all over the world. The use of biomass terminals where forest biomass is transported to, stored, processed (mostly by mobile machinery), and reloaded can facilitate more environmentally friendly and efficient transportation to a biorefinery. The challenge is to identify the locations that should be selected for terminal establishment in order to minimize the cost of biomass procurement. In this study, locations for terminal establishment are proposed based on an optimization method (Combopt) that simultaneously minimizes the harvesting, transportation, and terminal costs for round wood and logging residues. The outcome of this method was compared with several other methods imitating situations with limited knowledge to estimate potential opportunity costs of potential knowledge deficiency when selecting terminal locations. The results of the Combopt method suggest that six terminals are required in order to minimize the overall cost of satisfying the estimated demand from the biorefineries. The opportunity cost of alternative terminal selection methods ranged from 3.1 to 35.4 million SEK (0.5-6.1% of total procurement cost). Methods that considered biomass relatively close to terminals had lower opportunity costs, together with methods minimizing transportation and terminal cost for the most common wood assortment. The methods and results could be applicable in other parts of the world were similar problems exists in forestry and other industries. ARTICLE HISTORY

Integrating Analytical Hierarchical Process and Network Optimization Model to Support Decision-Making on Biomass Terminal Selection

“…Biomass arrival and departure periods in the terminal were tracked using two sets of time periods. Consistency between the two time periods is maintained using Equation (27). Terminal capacities are specified using Equations ( 28) and (29).…”

“…Abasian [26] developed a two-stage stochastic optimization model to evaluate the profitability of including a terminal to an existing forest supply chain. Berg [27] proposed an integrated optimization model that simultaneously minimizes harvesting, transportation and terminal costs for round wood, logging residues and salvage harvest to identify cost-efficient locations for terminal establishment.…”

Spatial forest biomass supply chain analysis in Finland

“…new products or technologies) are concerned, spatial BSC case studies usually become relevant with a small delay, while the role of spatial data and GIS methods is much more important when new concepts are introduced within existing BSC systems. Such cases include, for example, new feedstock types (Laitila et al 2016a;Laasasenaho 2019) or changes in vehicles (Laitila et al 2016b; Paper IV), processing methods (Laitila et al 2015;Agar et al 2020), BSC network design (Kanzian et al 2009;Cavalli et al 2012;Athanassiadis and Nordfjell 2017;Berg and Athanassiadis 2019), or decision-making strategies (Windisch et al 2015;Eriksson et al 2017;Laurén et al 2018).…”

The cost of closed terminals in the supply chain for a potential biorefinery in northern Sweden

“…The forest biomass procurement cost for different supply systems (current and theoretical) in the Nordic countries have been reported (e.g. Tahvanainen and Anttila 2011;Joelsson et al 2016;Laitila et al 2016;Berg and Athanassiadis 2019). Athanassiadis and Nordfjell (2017) presented marginal procurement cost curves for logging residues and stumps in northern Sweden, based on costs from forests to terminals/ end-users in the region.…”