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Financial analysis and risk assessment of hydroprocessed renewable jet fuel production from camelina, carinata and used cooking oil

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  • Chu, Pei Lin
  • Vanderghem, Caroline
  • MacLean, Heather L.
  • Saville, Bradley A.

Abstract

This paper evaluates the financial viability of renewable jet fuel production, from two oilseed crops Camelina sativa (camelina) and Brassica carinata (carinata) and used cooking oil (UCO), by the hydrodeoxygenation pathway. A Monte Carlo analysis is performed to examine the robustness of the financial performance by taking into consideration key uncertain parameters, including capital cost, oil content of seeds, and prices of feedstocks, gas, electricity, water, meal co-product, and crude oil (indicator of fuel product prices). The Monte Carlo analysis revealed that under the conditions analyzed, the probabilities that the net present value would be positive are 29% for camelina, 18% for carinata and 8% for UCO, indicating that the three projects are risky for investors. Sensitivity analysis determined that the projects’ financial performance is highly sensitive to prices of fuel products and feedstocks. The impacts of two different hypothetical biofuel economic incentives were assessed: Carbon trading and tradable credits similar to the Renewable Identification Number (RIN). Income earned in the form of a RIN would have a large positive impact on the projects’ viabilities. By assuming an incentive of $0.20/L of renewable fuel, the probabilities that the NPV would be positive are 85% for camelina, 75% for carinata and 58% for UCO.

Suggested Citation

  • Chu, Pei Lin & Vanderghem, Caroline & MacLean, Heather L. & Saville, Bradley A., 2017. "Financial analysis and risk assessment of hydroprocessed renewable jet fuel production from camelina, carinata and used cooking oil," Applied Energy, Elsevier, vol. 198(C), pages 401-409.
    • Handle: RePEc:eee:appene:v:198:y:2017:i:c:p:401-409
    DOI: 10.1016/j.apenergy.2016.12.001
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    References listed on IDEAS

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    2. Łukasz Sobiech & Monika Grzanka & Danuta Kurasiak-Popowska & Dominika Radzikowska, 2020. "Phytotoxic Effect of Herbicides on Various Camelina [ Camelina sativa (L.) Crantz] Genotypes and Plant Chlorophyll Fluorescence," Agriculture, MDPI, vol. 10(5), pages 1-14, May.
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    4. Mousavi-Avval, Seyed Hashem & Shah, Ajay, 2021. "Techno-economic analysis of hydroprocessed renewable jet fuel production from pennycress oilseed," Renewable and Sustainable Energy Reviews, Elsevier, vol. 149(C).
    5. Wang, Wei-Cheng, 2019. "Techno-economic analysis for evaluating the potential feedstocks for producing hydro-processed renewable jet fuel in Taiwan," Energy, Elsevier, vol. 179(C), pages 771-783.
    6. Rafael Estevez & Laura Aguado-Deblas & Francisco J. López-Tenllado & Carlos Luna & Juan Calero & Antonio A. Romero & Felipa M. Bautista & Diego Luna, 2022. "Biodiesel Is Dead: Long Life to Advanced Biofuels—A Comprehensive Critical Review," Energies, MDPI, vol. 15(9), pages 1-39, April.
    7. Zech, Konstantin M. & Dietrich, Sebastian & Reichmuth, Matthias & Weindorf, Werner & Müller-Langer, Franziska, 2018. "Techno-economic assessment of a renewable bio-jet-fuel production using power-to-gas," Applied Energy, Elsevier, vol. 231(C), pages 997-1006.
    8. Ahmad, Salman & Ouenniche, Jamal & Kolosz, Ben W. & Greening, Philip & Andresen, John M. & Maroto-Valer, M. Mercedes & Xu, Bing, 2021. "A stakeholders’ participatory approach to multi-criteria assessment of sustainable aviation fuels production pathways," International Journal of Production Economics, Elsevier, vol. 238(C).
    9. Mousavi-Avval, Seyed Hashem & Shah, Ajay, 2020. "Techno-economic analysis of pennycress production, harvest and post-harvest logistics for renewable jet fuel," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    10. Mousavi-Avval, Seyed Hashem & Shah, Ajay, 2021. "Life cycle energy and environmental impacts of hydroprocessed renewable jet fuel production from pennycress," Applied Energy, Elsevier, vol. 297(C).
    11. Stevens, Jeremiah H. & Taheripour, Farzad, 2020. "A stochastic techno-economic analysis of aviation biofuel production from pennycress seed oil," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304524, Agricultural and Applied Economics Association.
    12. Segura, E. & Morales, R. & Somolinos, J.A., 2018. "A strategic analysis of tidal current energy conversion systems in the European Union," Applied Energy, Elsevier, vol. 212(C), pages 527-551.
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