Economic impacts of bio-refinery and resource cascading systems: an applied general equilibrium analysis for Poland.

Biotechnol J

Environmental Economics and Natural Resources Group, Wageningen University, Wageningen, The Netherlands.

Published: December 2007

AI Article Synopsis

  • The shift to biomass-based substitutes for traditional chemicals is driven by stricter energy and climate policies, leading to increased demand for specific crops and affecting traditional agricultural production.* -
  • The study uses an applied general equilibrium model to analyze how bio-refinery processes converting grass into bio-nylon and propane-diol impact land use, agricultural production, and bioelectricity within various climate policy scenarios.* -
  • Findings suggest that while bio-refinery technologies become competitive with stricter policies, they don't significantly increase the share of bioelectricity; instead, they shift land and resources away from direct bioelectricity production toward bio-refinery inputs.*

Article Abstract

Due to more stringent energy and climate policies, it is expected that many traditional chemicals will be replaced by their biomass-based substitutes, bio-chemicals. These innovations, however, can influence land allocation since the demand for land dedicated to specific crops might increase. Moreover, it can have an influence on traditional agricultural production. In this paper, we use an applied general equilibrium framework, in which we include two different bio-refinery processes and incorporate so-called cascading mechanisms. The bio-refinery processes use grass, as one of the major inputs, to produce bio-nylon and propane-diol (1,3PDO) to substitute currently produced fossil fuel-based nylon and ethane-diol. We examine the impact of specific climate policies on the bioelectricity share in total electricity production, land allocation, and production quantities and prices of selected commodities. The novel technologies become competitive, with an increased stringency of climate policies. This switch, however, does not induce a higher share of bioelectricity. The cascade does stimulate the production of bioelectricity, but it induces more of a shift in inputs in the bioelectricity sector (from biomass to the cascaded bio-nylon and 1, 3PDO) than an increase in production level of bioelectricity. We conclude that dedicated biomass crops will remain the main option for bioelectricity production: the contribution of the biomass systems remains limited. Moreover, the bioelectricity sector looses a competition for land for biomass production with bio-refineries.

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http://dx.doi.org/10.1002/biot.200700125DOI Listing

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