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Policy Analysis

Target cultivation and financing parameters for sustainable production of fuel and feed from microalgae Leda Nelly Hermine Gerber, Jefferson W. Tester, Colin M Beal, Mark Huntley, and Deborah Sills Environ. Sci. Technol., Just Accepted Manuscript • DOI: 10.1021/acs.est.5b05381 • Publication Date (Web): 04 Mar 2016 Downloaded from http://pubs.acs.org on March 4, 2016

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Environmental Science & Technology

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Target cultivation and financing parameters for

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sustainable production of fuel and feed from

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microalgae

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Léda N. Gerber*a,b, Jefferson W. Testera,b, Colin M. Bealc, Mark E. Huntleyd, Deborah L.

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Sills*a,b,e

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a) Department of Chemical and Biomolecular Engineering, Cornell University

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b) Cornell Energy Institute, Cornell University

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c) B&D Engineering and Consulting LLC, Lander WY

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d) Marine Laboratory, Nicholas School of the Environment, Duke University

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e) Department of Civil and Environmental Engineering, Bucknell University

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KEYWORDS: Algal Biofuels, Life Cycle Assessment, Techno-Economic Analysis,

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Uncertainty analysis, Energy systems modeling

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ABSTRACT: Production of economically competitive and environmentally sustainable algal

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biofuel faces technical challenges that are subject to high uncertainties. Here we identify

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target values for algal productivity and financing conditions required to achieve a biocrude

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selling price of $5 per gallon and beneficial environmental impacts. A modeling

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framework—combining process design, techno-economic analysis, life cycle assessment, and

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uncertainty analysis—was applied to two conversion pathways: (1) “fuel only (HTL)”, using

ACS Paragon Plus Environment

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hydrothermal liquefaction to produce biocrude, heat and power, and (2) “fuel and feed”,

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using wet extraction to produce biocrude and lipid-extracted algae, which can substitute

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components of animal and aqua feeds. Our results suggest that with supporting policy

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incentives, the “fuel and feed” scenario will likely achieve a biocrude selling price of less

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than $5 per gallon at a productivity of 39 g/m2/day, versus 47 g/m2/day for the “fuel only

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(HTL)” scenario. Furthermore, if lipid-extracted algae are used to substitute fishmeal, the

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process has a 50 percent probability of reaching $5 per gallon with a base case productivity

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of 23 g/m2/day. Scenarios with improved economics were associated with beneficial

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environmental impacts for climate change, ecosystem quality, and resource depletion, but not

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for human health.

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ABSTRACT ART:

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1. INTRODUCTION

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The economic competitiveness and the environmental benefits of producing biofuel from

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microalgae remain challenging 1. Part of the controversy regarding the sustainability of algal

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biofuel production comes from the inherently high uncertainty associated with an emerging

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technology. Indeed, the choice of single-point parameter values when modeling algal biofuel

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production processes influences economic and environmental performances 2, 3, 4, 5.

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The US Department of Energy (DOE) set a near-term research target of $5 per gallon

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gasoline equivalent (GGE) for the minimum selling price of algal biofuel, with an ultimate


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target of $3 per GGE by 2030 for mature technologies 6. A number of techno-economic

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analysis (TEA) studies report production costs (analogous to the minimum selling price) as

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single-point values that are below

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differences in results come from different assumptions made by modelers regarding algal

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cultivation systems, processing pathways and financing schemes. For example, Davis et al. 12

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show that seasonal variation and location in the continental US have a significant influence

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on both overall economic performance and LCA results. Richardson et al.

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financing and process uncertainties and conclude that algal biofuels production requires

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significant improvements for both capital and operating costs to become economically

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competitive with fossil fuels. However, neither study identifies practical quantitative targets

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to guide research and development to improve cultivation performances (e.g. algal

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productivity) or financing options.

7, 8, 9

or above

10, 11, 12

the $5 per GGE target. These

5

accounted for

52 53

Key assumptions associated with cultivation and processing of microalgae in life cycle

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assessment (LCA) models also lead to a range of environmental impacts (both positive and

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negative), as discussed in several LCA studies

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uncertainties of LCA impacts for algal biofuels production 2, 3, 15, they only consider impacts

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on climate change and energy return on investment. In an earlier work in our group, Beal et al

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16

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only as single-point values. To the best of our knowledge, no study has accounted for

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uncertainties related to these environmental impacts.

2, 13, 14

. Although a few studies address

addressed other environmental impacts, including ecosystem quality and human health, but

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Parameters with large influences on the economic and environmental performances of algal

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biofuels production include productivity 2, 12, lipid content 17 and the production of valuable

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co-products such as animal feed ingredients from residual biomass 18, 19. Moreover, market


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conditions and selling prices for biocrude oil and co-products are of critical importance for

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process economics 20. Finally, implementing supportive policies such as “green” fuel pricing,

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public financing 21 or favorable loan conditions 22 can provide additional incentives to attract

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investors in emerging renewable energy technologies.

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Quantitative targets needed for environmentally sustainable and economically viable,

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commercial-scale production of algal biofuels should be identified to help define research

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priorities and inform policy makers. Target parameters that account for uncertainties related

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to the development of this emerging technology will provide stakeholders with more

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meaningful and robust information than single-point values.

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In this study, we present a systems-modeling framework that identifies target values for

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cultivation parameters (productivity and lipid content) and financing schemes needed to reach

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a target of $5 per gallon for a minimum selling price of biocrude and beneficial

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environmental impacts. We combine experimental results and published data to create

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process models, TEA, and LCA, coupled with a comprehensive analysis of uncertainty. We

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modeled two pathways that convert marine microalgae to: (1) fuel only (i.e. biocrude, heat,

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and power) and (2) fuel (biocrude) and lipid-extracted algae as a substitute for corn, soy and

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fish meals as feed ingredients.

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2. METHODOLOGY

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2.1. Modeling framework

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The process systems modeling framework for the synthesis of energy systems described in

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Gerber et al 23 was adapted for the present study (Figure 1).


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Figure 1: Computational framework used for the simulation, design and performance calculation of process systems, including uncertainty analysis.

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The framework, which runs in Matlab, first simulates individual unit processes (e.g.

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cultivation, oil extraction). Unit processes are then combined, using an energy integration

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algorithm that optimizes heat and power recovery to minimize the investment, operating costs

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and use of external utilities 24. TEA and LCA are then performed using input and output

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values of the system to calculate values of performance indicators, such as minimum selling

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price of biocrude and environmental impacts. Thus, economic and environmental indicators

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are directly linked to the process configuration and its operating conditions, and any change

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in the design is reflected in its final performance. The modeling framework was extended to

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include a Monte-Carlo simulation algorithm to perform uncertainty analysis 2, 3, 5. Therefore,

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the system is designed, simulated, and its economic and environmental performances

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calculated as many times as the number of iterations required by the Monte-Carlo simulation.

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For the present study, we ran 1000 Monte-Carlo simulations. More details are provided in the

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SI.

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The TEA model, based on Beal et al. 16 and Huntley et al. 25, calculates capital investment and

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operating costs using costs correlations based on equipment scaling 26, 27, the revenue from

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co-products (e.g. animal feed ingredients, with a fixed price) and the algal biocrude minimum

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selling price, which is used as the major economic indicator. The economic model uses a

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discounted cash flow method, following the approach of the National Renewable Energy

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Laboratory for evaluating process economics of renewable energy technologies

28, 29

. A


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project lifetime of 30 years is assumed for each scenario, with a 90% capacity factor. Except

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for the improved scenario that considers a supporting policy with fixed financing conditions,

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the economic parameters of the TEA are modeled as uncertain parameters, including the

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discount rates (5.5–10.5%), the tax rates (0–40%), the equity shares (0–100%) and interest

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rates (5–9%), using information available in the literature. The variation of the capital costs (-

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20–30%) was based on assuming a Class 3 estimate 22. More details are provided in the SI.

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For the LCA model 16, the functional unit (FU) is 1 ha of algae cultivation and processing.

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This non-conventional FU is more appropriate than the conventional FU of MJ of produced

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energy 2, 3, 15 for the following reasons: (1) it avoids allocating impacts between the biocrude

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and the animal feed co-product (2) it allows a direct comparison of the cumulated impacts

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avoided by the fuel and feed pathway with the cumulated impacts of the fuel only pathway

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using the system expansion method, while accounting for the two different process

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efficiencies in biocrude production (3) although the primary product is algal biocrude, the

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“fuel and feed” pathway is a multi-output process, and therefore the function of the system

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can be described as using an available resource (non-arable land) for the production of useful

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energy or nutritional services via cultivation of algal biomass. Therefore, our LCA model

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accounts for harmful environmental impacts from materials and energy required to operate 1

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ha, as well as environmental benefits – which are credited to the system – from substitution

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of fossil crude by algal biocrude and of a mixture of soybean and corn meal in conventional

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swine and poultry feed 30 by lipid-extracted algae.

133 134

Life cycle inventory (LCI) data that account for off-site emissions for materials and energy

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(e.g. grid electricity) are taken from the ecoinvent v3.1 database 31, as well as uncertainty data

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for their inventories (see SI). IMPACT 2002+, used as the impact assessment method for the


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LCA, aggregates inventory data into four endpoint indicators of environmental performance:

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(1) climate change, (2) ecosystem quality, (3) human health and (4) non-renewable resources

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32

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specific to the USA, which convert each of the four environmental categories to units of

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“points of environmental damage”, so categories can be compared to one another 33. One

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point of environmental damage represents the yearly environmental impacts generated by an

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average American for the corresponding impact categories

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assessment method and the normalization factors are provided in the SI.

. Since the present study is conducted in the US context, we used normalization factors

33

. More details on the impact

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2.2. Scenarios

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The cultivation system was modeled as a commercial-scale 100-ha hybrid photo-bioreactor

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and open raceway pond system used to grow the green alga Desmodesmus sp. under high-

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nitrogen conditions 16, 25. Large-scale (i.e. 400 m2 ponds) cultivation data from Huntley et al

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25

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min of 14 g/m2/day, average of 23 25, max of 32 — and lipid (total) content — min of 23%,

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average of 37 25, max of 51— as detailed in the SI. Following in-pond gravity settling, a belt

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filter press was modeled for dewatering of microalgae (to 20 percent total solids) 16.

were used to calculate uncertainty ranges for the reported productivity as dry weight —

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Because drying algal biomass prior to conventional oil extraction techniques is not

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economically and environmentally sustainable

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example “wet” pathways to convert microalgae to biocrude (Figure 2): (1) “fuel only (HTL)”,

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which employs hydrothermal liquefaction (HTL) to produce biocrude 15, 9 and (2) “fuel and

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feed”, which employs the OpenAlgae wet oil extraction process to produce biocrude and a

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lipid-extracted residue. Although a number of wet extraction processes are under

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development

20, 13, 34

, the present study focuses on two

7, 13, 14, 16, 35

, the objective of this paper is not to provide a comparative


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assessment of all wet-extraction processes, but instead to compare two example processes

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that represent energy-only and energy-and-feed pathways.

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HTL, a high pressure and high temperature process, converts biomass with potential biocrude

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yields of 50% or more (as percent biomass converted) that are higher than the lipid fraction

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of the raw biomass

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presents challenges, HTL is promising and has received attention from industry 15, 38. HTL

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produces an oil phase, which substitutes conventional fossil crude oil in refinery operations

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for the production of drop-in fuels, and an aqueous phase, which contains the leftover

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unconverted organic matter. The unconverted organic matter may be converted to a gaseous

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mixture of CH4 and CO2 with catalytic hydrothermal gasification (CHG) 7, 36. Produced gas

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can then be used to supply a combined heat and electric power (CHP) system, to meet part of

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the energy requirements for cultivation and processing. The thermally detoxified water

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coming out of CHG contains nutrients in the form of salts that can be recycled to cultivate

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additional microalgae 7, 36. Based on experimental data, we assumed that 52% of nitrogen and

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75% of phosphorus are recycled 7, 15.

7, 15, 36, 37, 38

. Although commercial scale processing with HTL still

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The OpenAlgae wet extraction process uses electromechanical pulsing to permeate algal

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cells, followed by membrane-mediated oil separation

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distillation, and the lipid-extracted algae is dried for inclusion in animal feed with no

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nutrients recycled. The lipid-extracted residue consists of residual lipid in addition to

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carbohydrates and proteins, because the extraction process has a base efficiency of 75% 16,

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which is comparable to reported values for wet hexane extraction (70-91%)

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studies demonstrate the feasibility and benefits of using lipid-extracted algae as animal feed

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ingredients 2, 16, 18, 40, 30.

16, 39

. The biocrude is recovered by

13, 14

. Recent


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The biocrudes produced by HTL and the wet extraction process are compositionally different

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38, 39

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and diesel) through conventional refining methods such as hydrotreatment

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transesterification 7, 42, 43. Both processes have been demonstrated at small-scale, but further

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research is needed to fully characterize the product compositions at large-scale 7, 39. As a

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result, we estimate HTL and extracted oils to be equivalent biocrude products, but recognize

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that experimental work is needed to better characterize these products. Because of the

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uncertainties in biocrude composition, our system limits (Figure 2) do not include biocrude

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upgrading, both for TEA and LCA.

; however, both oil products can be upgraded to a range of fuel products (e.g., naphtha 41

and

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Figure 2: Process systems model for the two pathways considered in the present study: fuel only and fuel & feed (HTL).

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Although not equivalent to the DOE’s intermediate research target of a biofuel selling price

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of $5 per GGE (this would depend on upgrading efficiency), we chose $5 per gallon of

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biocrude as an economic criterion. For the environmental impact criterion, we chose a neutral

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life cycle balance (i.e., zero points of environmental damage) for each of the four impact

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categories, meaning that the avoided impacts from the products should outweigh the harmful

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impacts generated by the construction, operation and end-of-life of the algae facility. For the

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category of climate change, zero points of environmental damage, the target criterion, is

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equivalent to a global warming potential lower than that of conventional gasoline. For the

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category of non-renewable resources, the criterion is equivalent to a net energy value of zero,


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as defined by Farrell et al 44. The methodology to calculate the avoided CO2 emissions and

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the substituted crude oil consumption in comparison to conventional fossil fuels is detailed in

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the SI.

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The upper limits for target productivity and lipid content have been set according to Williams

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and Laurens’ suggested theoretical achievable biological limits, which are 55 g/m2/day and

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0.5 kg lipid/kg of dry biomass, respectively 20, although other theoretical productivities have

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been suggested elsewhere 45. These values have been set as maximum thresholds, and the

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simulations have been performed for 23, 31, 39, 47, 55 g/m2/day for productivity, and 0.37,

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0.40, 0.44, 0.47, 0.50 for lipid content. The maximal productivity is a theoretical upper limit

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and is far higher than reported values, but may be achieved if breakthroughs in

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photosynthetic and metabolic pathways of microalgae occur. Although lipid contents higher

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than the upper limit used here have been observed 17, we did not consider these higher values,

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because of the biological trade-off between lipid content and growth rate 20, 46, 47.

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Two alternative financing scenarios were investigated: (1) full “public financing”, with no

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loan, interest or taxes, and with a low discount rate (3%) 21, and (2) “favorable loan”, issued

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in the form of bond 22, both taken as best-case financing scenarios for supporting an early

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development stage industry. Since the “public financing” scenario achieved a better

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economic performance than the “favorable loan” scenario, we only present results for the

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former to show the economic potential that may be realized with the best financing

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conditions.

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In addition, we considered using lipid-extracted algae to substitute fishmeal (a major

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ingredient of fish or animal feed) to improve the economics of algal biofuel production.


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Lipid-extracted microalgae have been considered as a substitute for soybean and corn meal

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for swine or poultry feed 18, 30. This is the baseline assumption of our economic model, which

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leads to a co-product price varying from $400 per MT to $700 per MT (see SI for more

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details). Recent studies, however, suggest the feasibility of using lipid-extracted algae as a

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substitute to the growing demand in fishmeal for aquaculture 48, 49, which would increase the

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co-product price to $1300 per MT to $2400 per MT (see SI for more details). Therefore, an

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alternate scenario, referred to as fuel and fish feed, has also been evaluated.

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3. RESULTS AND DISCUSSION

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3.1. Base cases

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Biocrude minimum selling prices for the base case scenarios (Figure 3) show that both the

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“fuel only (HTL)” and the “fuel and feed” pathways present a range of selling prices that are

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almost exclusively above $5 per gallon.

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Figure 3: Economic comparison of base cases for “fuel only (HTL)” and combined “fuel and feed” pathways. Center lines represent median values, edges of boxes represent 25th and 75th percentiles, and limiting bars represent 5th and 95th percentiles of the distributions resulting from 1000 Monte Carlo simulations. The target price of $5 per gallon of biocrude is displayed in red.


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The wider range of selling prices for the “fuel and feed” scenario results from the additional

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market uncertainty related to the sale of co-products at prices comparable to those of soybean

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and corn meal 50. Even though the “fuel only (HTL)” scenario is on average slightly more

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profitable than the “fuel and feed” scenario and with less uncertainty, no pathway is clearly

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more favorable under the base-case conditions. This highlights the importance of accounting

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for uncertainties linked to cultivation, processing and market conditions when performing

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TEAs of emerging technologies like algal biofuels, and explains why studies reporting single-

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point values

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uncertainty ranges for TEA of algae and reported minimum biocrude selling prices varying

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between $8 per gallon and $43 per gallon in their base case. The implication of their results

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is a zero-probability of algal biofuels production being competitive in current energy markets,

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which is in agreement with our results (Figure 3).

7, 8, 11

do not agree with each other. Richardson et al

5

considered financial

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Figure 4: Environmental comparison of base cases for fuel only (HTL) and combined fuel and feed production pathways. Center lines represent median values, edges of boxes represent 25th and 75th percentiles, and limiting bars represent 5th and 95th percentiles of the distributions resulting from 1 000 Monte Carlo simulations. Negative numbers represent environmental benefits, whereas positive numbers represent environmental harm.

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The environmental performance for base case scenarios (Figure 4) varies among impact

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categories and the two processing pathways. The base case results illustrate the importance of

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simultaneously considering uncertainties and multiple environmental indicators. For impacts


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on climate change and non-renewable resources, the “fuel only (HTL)” scenario tends to be

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more beneficial than the “fuel and feed” scenario because of its higher fossil fuel substitution,

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which is in agreement with the single point values reported by Beal et al 16. However, when

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incorporating the wide uncertainty ranges, due to both foreground model parameters and

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background LCI data, results are inconclusive as to whether either pathway is clearly

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beneficial or harmful with respect to climate change and non-renewable resources. For

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ecosystem quality, on the other hand, the “fuel and feed” pathway is likely to be beneficial

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and is clearly better than the “fuel only (HTL)” pathway, due to the substitution of

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agricultural products (e.g. soy and corn) by lipid-extracted algae, despite a higher uncertainty

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range. This higher uncertainty range for the “fuel and feed” scenario is due, like for

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economics, to the additional background LCI uncertainty of substituted soy and corn meal.

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For human health, both pathways are likely to be harmful, due to the high consumption of

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grid electricity by the cultivation system. This of course depends on how the electricity is

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produced. The electric grid modeled in this study was for Texas because of its promise as a

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location to grow algae in the USA 51,

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from coal, and, therefore, leads to high off-site air emissions.

52, 53

. Thirty-three percent of its capacity is supplied

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3.2. Improved cultivation

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The effects of improving productivity and lipid content on the minimum selling price of

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biocrude and on the non-renewable resources category are displayed in Figure 5. The results

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for the three other LCA categories are presented in the SI. Because the effects of varying

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lipid content on HTL performance are not quantifiable from currently available data, results

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for the “fuel only (HTL)” pathway reflect changes in productivity only.


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Figure 5: Effect of improved productivity and lipid content on economics and on non-renewable resources. Center lines represent median values, edges of boxes represent 25th and 75th percentiles, and limiting bars represent 5th and 95th percentiles of the distributions resulting from 1 000 Monte Carlo simulations.

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The “fuel only (HTL)” scenario, which is slightly more attractive economically at base

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productivities, is outperformed by the “fuel and feed” pathway as productivity increases, due

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to the supplementary revenue from co-product sales. Higher productivities also reduce

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uncertainties for the biocrude minimum selling price, since the uncertainty associated with

304

the capital costs estimate is divided by a higher overall biomass production from the facility.

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Lipid content has significantly less effect than productivity on the “fuel and feed” route,

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because as lipid increases the mass and subsequent sales of animal feed co-product decreases.

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However, since the model calculates the minimum biocrude selling price, it does not account

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for uncertainties in the price of fossil crude. If the market price of lipid-extracted algae is

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greater than the market price of biocrude on a mass basis, then it is economically preferable


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to have a low lipid content or to sell the entire biomass as animal feed ingredients. However,

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if the price of biocrude is higher, it is economically favorable to have a high lipid content.

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Given the market uncertainties in the prices of both products (300-900 $/MT for crude oil 54

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versus 400-700 $/MT for feed ingredients

314

content is economically favorable.

50

) we cannot conclude whether a higher lipid

315 316

For the base case financial conditions, algal biofuel production in a commercial facility such

317

as the one modeled here would likely be profitable for the “fuel and feed” scenario only at

318

high productivities of 47 g/m2/day or higher. For the “fuel only (HTL)” scenario, an increase

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in productivity from 23 to 47 g/m2/day, results in a decrease of the median values for the

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minimum selling price of biocrude from about $12 to $6 per gallon, which is still not

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economically profitable. This agrees with results reported by Davis et al 12, in which an

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increase in productivity (for an HTL pathway) from 20 to 50 g/m2/day results in a decrease in

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the minimum fuel selling price from around $9 to $5 per gallon.

324 325

For the LCA, trade-offs among the four environmental indicators depend on the processing

326

pathway. For both pathways, although increases in productivity improve environmental

327

performance, they widen associated uncertainty ranges, because the product output per ha,

328

substituting fossil fuel or agricultural goods, increases with productivity. For the “fuel and

329

feed” scenario, increasing lipid content improves the environmental performance for some

330

but not all of the impact categories (Figure S3-S5). The environmental performance of each

331

indicator depends on which product (biocrude or animal feed) avoids more impacts. For

332

example, for non-renewable resources, substitution of fossil fuel by algal biofuel is more

333

beneficial than substitution of soybean and corn meal by lipid-extracted algae (Figure 5).

334

Therefore, for non-renewable resources, the “fuel only (HTL)” pathway is likely to lead to


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fossil resources savings at a base productivity of 23 g/m2/day, whereas for the “fuel and feed”

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pathway, a productivity of around 40 g/m2/day is required.

337 338

The climate change indicator behaves similarly in that the “fuel only (HTL)” scenario is more

339

likely to avoid greenhouse gases compared to the “fuel and feed” scenario. Furthermore, for

340

climate change, in contrast to non-renewable resources, the “fuel and feed” pathway is likely

341

to be beneficial at a base productivity of 23 g/m2/day (Figure S3 & Figure 4). The ecosystem

342

quality indicator shows the opposite trend, being beneficial at any productivity for the “fuel

343

and feed” pathway due to soy and corn substitution, and being harmful at any productivity for

344

the “fuel only” pathway (Figure S4), because the substitution of fossil fuel is not sufficient to

345

compensate for off-site impacts from electricity production for algae cultivation. For

346

ecosystem quality, the harmful impact increases with increased lipid content in the “fuel and

347

feed” pathway, due to the decreased benefits of substituting corn and soy resulting in

348

decreased agricultural land savings. For human health, both pathways are harmful for all

349

productivities modeled due to background air emissions of the “fossil-dominant” electricity

350

mix (Figure S5). Developing algal biofuel production facilities in parallel with renewable and

351

clean electricity sources would mitigate this effect 16.

352 353

3.3. Improved financing

354

The effects of productivity and a supportive financing policy on the minimum selling price of

355

biocrude are displayed in Figure 6. Since lipid content is less critical for the economics of

356

algal biofuels production (Figure 5), its impact is not presented here.


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Figure 6: Effect of combined improved productivity and favorable financing conditions on economics. Center lines represent median values, edges of boxes represent 25th and 75th percentiles, and limiting bars represent 5th and 95th percentiles of the distributions resulting from 1 000 Monte Carlo simulations. Negative values of biocrude minimum selling prices indicate that feed revenue alone would be sufficient to subsidize fuel production.

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For the “fuel only (HTL)” pathway, a favorable government policy with incentives combined

363

with improved productivity (>47 g/m2/day) results in minimum selling price of less than $5

364

per gallon for 75% of the results from the Monte Carlo simulations, whereas without the

365

supportive financing policy, the “fuel only (HTL)” pathway is not likely to reach the

366

economic target at any productivity. For the “fuel and feed” pathway, public financing would

367

likely lead to a profitable technology at a productivity of 39 g/m2/day, whereas productivity

368

>47 g/m2/day would be required without financial incentives. Even with public financing and

369

favorable policies, an increase of 70% in productivity over the base case would still be

370

required, which would be challenging. Similarly, Richardson et al 5 showed that between 60-

371

90% reductions in capital costs and 50-90% reductions in operating costs are required for a

372

95% probability of economic success.

373 374

Another scenario, feasible only for the “fuel and feed” pathway, considers an alternative

375

market for the animal feed co-product – i.e., substituting fishmeal instead of corn and soy

376

meals. As seen in Figure 6, when lipid-extracted algae is sold as a fishmeal substitute ($1300


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377

to $2400 per MT versus $400 to $700 per MT for animal feed ingredients), more than 50

378

percent of the Monte-Carlo simulation results reach the target for a minimum selling price for

379

biocrude of less that $5 per gallon at a base productivity of 23 g/m2/day, and more than 95

380

percent of the Monte-Carlo simulation results reach the target at an improved productivity of

381

31 g/m2/day. At 39 g/m2/day, the ‘fuel and fish feed’ scenario would become economically

382

profitable without any fuel sales, as illustrated by the negative values of the biocrude

383

minimum selling price in Figure 6. The uncertainty for the ‘fuel and fish feed’ scenario is

384

higher compared to the base case and the public financing due to the wide range of prices for

385

co-product sales, but is still more profitable. A limitation to the large-scale development of

386

this scenario could be the reduced size of fishmeal market (7 MMT) 55 compared to animal

387

feed ingredients (1100 MMT for swine, cattle and poultry) 56. Economics and environmental

388

impacts would vary if algal biomass was used for nutraceutical or pharmaceutical products,

389

and these should be focused on in future studies.

390 391

In this study, corn and soy and fishmeal substitutes were modeled as two separate co-

392

products. In reality, however, both cases represent the same product, lipid-extracted algae,

393

which would be sold in commodity markets as substitutes for either corn and soy (case 1) or

394

fishmeal (case 2). This would have consequences on its selling price. First, animal feed

395

ingredients from algae contain more beneficial omega-3 fatty acids 57 than soy or corn, and

396

would, thus, likely be sold at a higher price than the one assumed here. Second, more

397

experimental evidence is required to demonstrate that lipid-extracted algae would be able to

398

substitute fishmeal on a one to one mass ratio. Otherwise, lipid-extracted algae will likely be

399

sold at a lower price than fishmeal. Finally, more work is required using global market

400

models to calculate the shares of lipid-extracted algae contributing to these two markets.

401


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402

4. MAJOR FINDINGS

403

The wide range of estimated prices for algal biocrude reported here is in agreement with

404

reviews of single-point values presented by Quinn and Davis

405

demonstrating that biocrude selling price varies significantly among several TEA studies of

406

algal biofuels (ranges of $1.65-33.2 1 and $0.67-75 per gal 16, respectively). The wide range

407

observed in our study for each processing pathway suggests that the TEA indicators of algal

408

biofuels production should be reported as ranges rather than single-point values. Our study

409

confirms and extends previous findings2 for impacts on climate change and non-renewable

410

resources to additional environmental indicators of ecosystem quality and human health.

1

16

and Beal et al.

411 412

For the base cases associated with both pathways, ranges of biocrude minimum selling price

413

vary between $5 and $25 per gallon. With improved cultivation methods, the price of

414

biocrude varies between $0 and $25 per gallon. With improved financing or fishmeal

415

substitution, each alone or combined with improved cultivation, the minimum selling price

416

ranges from

Target Cultivation and Financing Parameters for ... - ACS Publications

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