Up Next

Market-Based Solutions to Vital Economic Issues


Market-Based Solutions to Vital Economic Issues
Dec 1, 2012

Advanced Bio-fuels from Pyrolysis Oil: The Impact of Economies of Scale and Use of Existing Logistic and Processing Capabilities.


The process for producing advanced bio-fuels from woody biomass using fast pyrolysis technology is in an early stage of development. Whether it will offer favorable economics versus future petroleum-derived fuels or other advanced bio-fuels is not clear at this time; however, a study of the value chain from growth to final distribution of drop-in bio-fuels has highlighted several factors that will have major impact on ultimate economics. These factors include:

  • the impact of economies of scale
  • advantages from using existing logistic capabilities, especially for first commercial production
  • existing refinery processing capabilities
  • the ability to finance timely process development and commercial scale-up with its associated risks.

Most of the required facilities should be able to operate at scale comparable to that used in the current petroleum-based fuels industry, with substantial cost savings. Use of current refinery facilities and distribution networks for part of the process can add substantial additional savings. Using existing inland marine transportation capabilities will aid in achieving economic scale sooner as well as in reducing costs. Developing the technology to the point where a major scale-up is practical, including a relatively small demonstration of the commercial process is likely to be expensive. Value chains that are able to capture most of the potential economies of scale and compete with petroleum-derived fuels are likely to call for a billion dollars or more in initial investment.


Arbogast, S., Bellman, D., Paynter, J. D., & Wykowski, J. (2012). Advanced bio-fuels from pyrolysis oil: The impact of economies of scale and use of existing logistic and processing capabilities. Fuel Processing Technology, 104, 121–127. doi:10.1016/j.fuproc.2012.04.036

You may also be interested in: