What’s My Feedstock Worth? A primer for measuring bio-value

Theoretical ain’t actual

Now, we get into the interesting part, which is valorization — realizing your theoretical value. You can start by slashing 15 percent off the value of your feedstock right away. You might eventually find a bioconversion process than can capture more than 85 percent of the theoretical yield in actual yield, but you won’t find one easily, or right away.

Carbon value

It is not all tough news when it comes to valorizing your feedstock.

Feedstocks that are renewable can get an assist from a Low Carbon Fuel standard (as California, B.C. and Oregon have), a tax credit, a blending mandate, or a renewable fuel standard as the US has. That can add demand to the market — making it possible for you to compete at higher prices. It can add carbon value into your value equation.

Carbon value can be substantial. In this analysis of real-world data, industry consultant Michele Rubino found that cellulosic ethanol has as much as $2.20 per gallon in carbon value. That’s around $660 per ton.  Huge.

Is there an existing process?

If someone has a biorefinery in action now that uses your feedstock, there’s good news and bad news. The good news is that you can valorize your feedstock without the pain, cost and risk of developing your own or waiting around for a process to develop. The bad news is that, depending on how common or complex the process is, the bioconverter and all the partners in the supply chain are going to take a bite out of your feedstock’s value.

Or, it might dictate multiple markets for your feedstock because of how it works.

For example, take a bushel of corn.

Fuel, baby. You could gasify it, and make an intermediate known as syngas (a soup of hot hydrogen and carbon monoxide), which can then be converted into a liquid hydrocarbon fuel — the oxygen gets blown off in the process, and you probably lose carbon because you’re going to be short on your hydrogen in that process. The whole end-product gets valued as fuel, but you’re going to be looking at losing more than half of the weight.

Fractionation. Or, you could use ethanol fermentation. Plenty of corn ethanol plants around. In their process, about a third by weight becomes protein, about 1 percent becomes corn oil, about a third becomes CO2 and about a third is ethanol.   But the value of your feedstock in the protein markets is more or less is unconverted market price, and corn oil values at around 25 cents a pound. That CO2 may be captured for the liquid carbon dioxide market, or it may not. In any case, these alternative markets will change the value of your feedstock.  But in the case of corn ethanol bioconversion, the process losses are lower than the gasification example above.