IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i8p2294-d539008.html
   My bibliography  Save this article

Profitability Using Second-Generation Bioethanol in Gasoline Produced in Mexico

Author

Listed:
  • Adrián Bautista-Herrera

    (Comisión Nacional de Hidrocarburos, Universidad Panamericana, Avenida Patriotismo 580, Nonoalco, Benito Juárez, Ciudad de México 03700, Mexico)

  • Francisco Ortiz-Arango

    (ECEE, Universidad Panamericana, Augusto Rodin 498, Insurgentes Mixcoac, Benito Juárez, Ciudad de México 03920, Mexico)

  • José Álvarez-García

    (Financial Economy and Accounting Department, Faculty of Business, Finance and Tourism, University of Extremadura, 10071 Cáceres, Spain)

Abstract

Gasoline produced in Mexico by the productive company of the state Petróleos Mexicanos (PEMEX) mainly uses oil-derived ethers as oxygenators to reach the Mexican Regulatory ‘Framework’s octane number. An alternative to complying with these regulations could be to use bioethanol as an oxygenate. However, as a gasoline component, this could affect ‘Mexico’s food markets since sugar cane, and grains are the primary inputs for local production. The main objective of this study is to evaluate whether the use of bioethanol, produced from corn stubble, as an additive in gasoline produced by Petróleos Mexicanos (PEMEX) is profitable in Mexico, from the perspective of the evaluation of the supply chain and the finances. The purpose of this work is to contribute to the definition of the advantages and limitations for the existence of a second-generation bioethanol market produced from Lignocellulosic corn biomass and integrated into the gasoline market of national production in Mexico. The work starts with theoretical research to define the use of corn stubble as raw material, set up on its availability and feasibility determined based on a geographic information system (GIS), through the use of the agricultural production forecast approach, as well as the integration of costs and financial analysis. The results show that corn stubble bioethanol production is technically viable, but the production cost is not competitive yet. Although its price is not yet competitive compared to the imported price, using a fiscal incentive scheme and considering the decrease in energy dependence, it would be feasible to produce it in Mexico.

Suggested Citation

  • Adrián Bautista-Herrera & Francisco Ortiz-Arango & José Álvarez-García, 2021. "Profitability Using Second-Generation Bioethanol in Gasoline Produced in Mexico," Energies, MDPI, vol. 14(8), pages 1-16, April.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:8:p:2294-:d:539008
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/8/2294/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/8/2294/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Aditiya, H.B. & Mahlia, T.M.I. & Chong, W.T. & Nur, Hadi & Sebayang, A.H., 2016. "Second generation bioethanol production: A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 631-653.
    2. Rendon-Sagardi, Miguel A. & Sanchez-Ramirez, Cuauhtemoc & Cortes-Robles, Guillermo & Alor-Hernandez, Giner & Cedillo-Campos, Miguel G., 2014. "Dynamic analysis of feasibility in ethanol supply chain for biofuel production in Mexico," Applied Energy, Elsevier, vol. 123(C), pages 358-367.
    3. Sarkar, Nibedita & Ghosh, Sumanta Kumar & Bannerjee, Satarupa & Aikat, Kaustav, 2012. "Bioethanol production from agricultural wastes: An overview," Renewable Energy, Elsevier, vol. 37(1), pages 19-27.
    4. Awudu, Iddrisu & Zhang, Jun, 2012. "Uncertainties and sustainability concepts in biofuel supply chain management: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1359-1368.
    5. Gallagher, Paul W. & Brubaker, Heather & Shapouri, Hosein, 2005. "Plant size: Capital cost relationships in the dry mill ethanol industry," ISU General Staff Papers 200506010700001442, Iowa State University, Department of Economics.
    6. García, Carlos A. & Manzini, Fabio & Islas, Jorge, 2010. "Air emissions scenarios from ethanol as a gasoline oxygenate in Mexico City Metropolitan Area," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 3032-3040, December.
    7. Islas, Jorge & Manzini, Fabio & Masera, Omar, 2007. "A prospective study of bioenergy use in Mexico," Energy, Elsevier, vol. 32(12), pages 2306-2320.
    8. Elbehri, Aziz & McDougall, Robert & Horridge, Mark, 2009. "A Global Model for Agriculture and Bioenergy: Application to Biofuel and Food Security in Peru and Tanzania," 2009 Conference, August 16-22, 2009, Beijing, China 51914, International Association of Agricultural Economists.
    9. Comber, Alexis & Dickie, Jennifer & Jarvis, Claire & Phillips, Martin & Tansey, Kevin, 2015. "Locating bioenergy facilities using a modified GIS-based location–allocation-algorithm: Considering the spatial distribution of resource supply," Applied Energy, Elsevier, vol. 154(C), pages 309-316.
    10. Janssen, Rainer & Rutz, Dominik Damian, 2011. "Sustainability of biofuels in Latin America: Risks and opportunities," Energy Policy, Elsevier, vol. 39(10), pages 5717-5725, October.
    11. Kirubakaran, V. & Sivaramakrishnan, V. & Nalini, R. & Sekar, T. & Premalatha, M. & Subramanian, P., 2009. "A review on gasification of biomass," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(1), pages 179-186, January.
    12. Lozano-García, Diego Fabián & Santibañez-Aguilar, José Ezequiel & Lozano, Francisco J. & Flores-Tlacuahuac, Antonio, 2020. "GIS-based modeling of residual biomass availability for energy and production in Mexico," Renewable and Sustainable Energy Reviews, Elsevier, vol. 120(C).
    13. Croezen, H. & Kampman, B., 2009. "The impact of ethanol and ETBE blending on refinery operations and GHG-emissions," Energy Policy, Elsevier, vol. 37(12), pages 5226-5238, December.
    14. Andres Quintero, Julian & Ruth Felix, Erika & Eduardo Rincón, Luis & Crisspín, Marianella & Fernandez Baca, Jaime & Khwaja, Yasmeen & Cardona, Carlos Ariel, 2012. "Social and techno-economical analysis of biodiesel production in Peru," Energy Policy, Elsevier, vol. 43(C), pages 427-435.
    15. Gallagher, Paul W. & Brubaker, Heather & Shapouri, Hosein, 2005. "Plant Size: Capital Cost Relationships in the Dry Mill Ethanol Industry," Staff General Research Papers Archive 12306, Iowa State University, Department of Economics.
    16. Ebadian, Mahmood & van Dyk, Susan & McMillan, James D. & Saddler, Jack, 2020. "Biofuels policies that have encouraged their production and use: An international perspective," Energy Policy, Elsevier, vol. 147(C).
    17. Elizondo, Alejandra & Boyd, Roy, 2017. "Economic impact of ethanol promotion in Mexico: A general equilibrium analysis," Energy Policy, Elsevier, vol. 101(C), pages 293-301.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vishal Ram & Surender Reddy Salkuti, 2023. "An Overview of Major Synthetic Fuels," Energies, MDPI, vol. 16(6), pages 1-35, March.
    2. Noe Aguilar Rivera, 2022. "Sustainable Biofuels. Strategy for Growth and Energy Security," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 17(3), pages 1-29, Julio - S.
    3. Luis Armando Becerra-Pérez & Luis Rincón & John A. Posada-Duque, 2022. "Logistics and Costs of Agricultural Residues for Cellulosic Ethanol Production," Energies, MDPI, vol. 15(12), pages 1-18, June.
    4. Wu, Jy S. & Tseng, Hui-Kuan & Liu, Xiaoshuai, 2022. "Techno-economic assessment of bioenergy potential on marginal croplands in the U.S. southeast," Energy Policy, Elsevier, vol. 170(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Berhanu, Mesfin & Jabasingh, S. Anuradha & Kifile, Zebene, 2017. "Expanding sustenance in Ethiopia based on renewable energy resources – A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 1035-1045.
    2. Gebreegziabher, Zenebe & Mekonnen, Alemu & Ferede, Tadele & Kohlin, Gunnar, 2017. "Profitability of Bioethanol Production: The Case of Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 26(01), April.
    3. Taghizadeh-Alisaraei, Ahmad & Motevali, Ali & Ghobadian, Barat, 2019. "Ethanol production from date wastes: Adapted technologies, challenges, and global potential," Renewable Energy, Elsevier, vol. 143(C), pages 1094-1110.
    4. Stephen P. Holland & Jonathan E. Hughes & Christopher R. Knittel & Nathan C. Parker, 2013. "Unintended Consequences of Transportation Carbon Policies: Land-Use, Emissions, and Innovation," NBER Working Papers 19636, National Bureau of Economic Research, Inc.
    5. Deverell, Rory & McDonnell, Kevin & Ward, Shane & Devlin, Ger, 2009. "An economic assessment of potential ethanol production pathways in Ireland," Energy Policy, Elsevier, vol. 37(10), pages 3993-4002, October.
    6. Paul W. Gallagher, 2009. "Roles for evolving markets, policies, and technology improvements in U.S. corn ethanol industry development," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Apr, pages 12-33.
    7. Amigun, B. & Sigamoney, R. & von Blottnitz, H., 2008. "Commercialisation of biofuel industry in Africa: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(3), pages 690-711, April.
    8. Rendon-Sagardi, Miguel A. & Sanchez-Ramirez, Cuauhtemoc & Cortes-Robles, Guillermo & Alor-Hernandez, Giner & Cedillo-Campos, Miguel G., 2014. "Dynamic analysis of feasibility in ethanol supply chain for biofuel production in Mexico," Applied Energy, Elsevier, vol. 123(C), pages 358-367.
    9. Sanchez, Daniel L. & Callaway, Duncan S., 2016. "Optimal scale of carbon-negative energy facilities," Applied Energy, Elsevier, vol. 170(C), pages 437-444.
    10. Gilani, H. & Sahebi, H. & Oliveira, Fabricio, 2020. "Sustainable sugarcane-to-bioethanol supply chain network design: A robust possibilistic programming model," Applied Energy, Elsevier, vol. 278(C).
    11. Rooni, Vahur & Raud, Merlin & Kikas, Timo, 2017. "The freezing pre-treatment of lignocellulosic material: A cheap alternative for Nordic countries," Energy, Elsevier, vol. 139(C), pages 1-7.
    12. Szulczyk, Kenneth R. & McCarl, Bruce A. & Cornforth, Gerald, 2010. "Market penetration of ethanol," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 394-403, January.
    13. Okudoh, Vincent & Trois, Cristina & Workneh, Tilahun & Schmidt, Stefan, 2014. "The potential of cassava biomass and applicable technologies for sustainable biogas production in South Africa: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 1035-1052.
    14. Kocoloski, Matt & Michael Griffin, W. & Scott Matthews, H., 2011. "Impacts of facility size and location decisions on ethanol production cost," Energy Policy, Elsevier, vol. 39(1), pages 47-56, January.
    15. Jha, Priyanka & Schmidt, Stefan, 2021. "State of biofuel development in sub-Saharan Africa: How far sustainable?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).
    16. Paul Gallagher & Guenter Schamel & Hosein Shapouri & Heather Brubaker, 2006. "The international competitiveness of the U.S. corn-ethanol industry: A comparison with sugar-ethanol processing in Brazil," Agribusiness, John Wiley & Sons, Ltd., vol. 22(1), pages 109-134.
    17. Shapouri, Hosein & Salassi, Michael, 2006. "The Economic Feasibility of Ethanol Production from Sugar in the United States," Miscellaneous Publications 322769, United States Department of Agriculture, Economic Research Service.
    18. Sonja Simon & Tobias Naegler & Hans Christian Gils, 2018. "Transformation towards a Renewable Energy System in Brazil and Mexico—Technological and Structural Options for Latin America," Energies, MDPI, vol. 11(4), pages 1-26, April.
    19. Gallagher, Paul & Shapouri, Hosein & Brubaker, Heather, 2007. "Scale, Organization, and Profitability of Ethanol Processing," ISU General Staff Papers 200703010800001439, Iowa State University, Department of Economics.
    20. Palacio-Ciro, Santiago & Vasco-Correa, Carlos Andrés, 2020. "Biofuels policy in Colombia: A reconfiguration to the sugar and palm sectors?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:14:y:2021:i:8:p:2294-:d:539008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.