• Energy Research

As a relatively mature technology, biomass molded fuel (BMF) is widely used in distributed and centralized heating in China and has received considerable government attention. Although many BFM incentive policies have been developed, decreased domestic traditional fuel prices in China have caused BMF to lose its economic viability and new policy recommendations are needed to stimulate this industry. The present study built a regionalized net present value (NPV) model based on real production process simulation to test the impacts of each policy factor. The calculations showed that BMF production costs vary remarkably between regions, with the cost of agricultural briquette fuel (ABF) ranging from 86 US dollar per metric ton (USD/t) to 110 (USD/t), while that of woody pellet fuel (WPF) varies from 122 USD/t to 154 USD/t. The largest part of BMF’s cost composition is feedstock, which accounts for up 50%–60% of the total; accordingly a feedstock subsidy is the most effective policy factor, but in consideration of policy implementation, it would be better to use a production subsidy. For ABF, the optimal product subsidy varies from 26 USD/t to 57 USD/t among different regions of China, while for WPF, the range is 36 USD/t to 75 USD/t. Based on the data, a regional BMF development strategy is also proposed in this study.

Lignocellulosic biomass-based ethanol is categorized as 2nd generation bioethanol in the advanced biofuel portfolio. To make sound incentive policy proposals for the Chinese government and to develop guidance for research and development and industrialization of the technology, the paper reports careful techno-economic and sensitivity analyses performed to estimate the current competitiveness of the bioethanol and identify key components which have the greatest impact on its plant-gate price (PGP). Two models were developed for the research, including the Bioethanol PGP Assessment Model (BPAM) and the Feedstock Cost Estimation Model (FCEM). Results show that the PGP of the bioethanol ranges $4.68–$6.05/gal (9,550–12,356 yuan/t). The key components that contribute most to bioethanol PGP include the conversion rate of cellulose to glucose, the ratio of five-carbon sugars converted to ethanol, feedstock cost, and enzyme loading, etc. Lignocellulosic ethanol is currently unable to compete with fossil gasoline, therefore incentive policies are necessary to promote its development. It is suggested that the consumption tax be exempted, the value added tax (VAT) be refunded upon collection, and feed-in tariff for excess electricity (byproduct) be implemented to facilitate the industrialization of the technology. A minimum direct subsidy of $1.20/gal EtOH (2,500 yuan/t EtOH) is also proposed for consideration.