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Contracting for Biomass: Supply Chain Strategies for Renewable Energy

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  • Altman, Ira J.
  • Boessen, Chris
  • Sanders, Dwight

Abstract

Cellulosic-based ethanol production is a cornerstone of current and proposed U.S. renewable fuels policy. Indeed, some recent proposals include a nearly five-fold increase in renewable fuels production, the majority of which would have to come from cellulosic ethanol. U.S. farmers will clearly play a significant role in the development and success of this industry. Aside from the technological hurdles, a number of supply chain barriers must also be overcome. One such barrier includes the marketing of cellulosic feedstock (e.g., wheat straw and corn stover) by farmers and the procurement of this feedstock by biofuels refineries. The exchange mechanism for cellulosic feedstock may develop in a number of alternative ways. This research specifically examines some early contracting and procurement strategies by an industry leader, the Iogen Corporation. An understanding of how biomass marketing may evolve will help farm managers better prepare for entering this emerging industry.

Suggested Citation

  • Altman, Ira J. & Boessen, Chris & Sanders, Dwight, 2008. "Contracting for Biomass: Supply Chain Strategies for Renewable Energy," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2008, pages 1-7.
    • Handle: RePEc:ags:jasfmr:189870
    DOI: 10.22004/ag.econ.189870
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    References listed on IDEAS

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    1. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    2. Altman, Ira J. & Sanders, Dwight R. & Boessen, Christian R., 2007. "Applying Transaction Cost Economics: A Note on Biomass Supply Chains," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 25(01), pages 1-8.
    3. William M. Dugger, 1996. "The Mechanisms of Governance," Journal of Economic Issues, Taylor & Francis Journals, vol. 30(4), pages 1212-1216, December.
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    1. Altman, Ira & Bergtold, Jason & Sanders, Dwight & Johnson, Tom, 2015. "Willingness to supply biomass for bioenergy production: A random parameter truncated analysis," Energy Economics, Elsevier, vol. 47(C), pages 1-10.
    2. Granoszewski, Karol & Spiller, Achim, 2013. "Langfristige Rohstoffsicherung in der Supply Chain Biogas: Status Quo und Potenziale vertraglicher Zusammenarbeit," DARE Discussion Papers 1303, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    3. Rosburg, Alicia & Miranowski, John & McFadden, Jonathan, 2016. "Mitigating Feedstock Supply Risk in Corn Stover Biofuel Production," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235875, Agricultural and Applied Economics Association.
    4. Granoszewski, K. & Spiller, A., 2014. "Vertragliche Zusammenarbeit bei der energetischen Biomasselieferung: Einstellungen und Bindungsbereitschaften von deutschen Landwirten," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 49, March.
    5. Martinez-Valencia, Lina & Garcia-Perez, Manuel & Wolcott, Michael P., 2021. "Supply chain configuration of sustainable aviation fuel: Review, challenges, and pathways for including environmental and social benefits," Renewable and Sustainable Energy Reviews, Elsevier, vol. 152(C).

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