Biomass

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Computers and Chemical Engineering xxx (2014) xxxxxx
Contents lists available at ScienceDirect
Computers and Chemical Engineering

journal homepage: www.elsevier.com/locate/compchemeng
Biomass-to-bioenergy and biofuel supply chain optimization:

Overview, key issues and challenges
Dajun Yue a , Fengqi You a, , Seth W. Snyder b
a
b
Northwestern University, Evanston, IL 60208, USA

Argonne National Laboratory, Argonne, IL 60439, USA
a r t i c l e
i n f o
Article history:
Received 19 July 2013
Received in revised form
14 November 2013
Accepted 17 November 2013
Available online xxx
Keywords:
Supply chain modeling
Biofuels
Bioenergy
Mathematical programming
Multi-scale modeling
a b s t r a c t
This article describes the key challenges and opportunities in modeling and optimization of biomass-tobioenergy supply chains. It reviews the major energy pathways from terrestrial and aquatic biomass to
bioenergy/biofuel products as well as power and heat with an emphasis on drop-in liquid hydrocarbon
fuels. Key components of the bioenergy supply chains are then presented, along with a comprehensive
overview and classication of the existing contributions on biofuel/bioenergy supply chain optimization.
This paper identies fertile avenues for future research that focuses on multi-scale modeling and optimization, which allows the integration across spatial scales from unit operations to biorenery processes
and to biofuel value chains, as well as across temporal scales from operational level to strategic level.
Perspectives on future biofuel supply chains that integrate with petroleum renery supply chains and/or
carbon capture and sequestration systems are presented. Issues on modeling of sustainability and the
treatment of uncertainties in bioenergy supply chain optimization are also discussed.
2013 Elsevier Ltd. All rights reserved.
1. Introduction
Biomass-derived liquid transportation fuels and energy products have been proposed as part of the solution to climate change
and our heavy dependence on fossil fuels, because the biomass
feedstock can be produced renewably from a variety of domestic
sources, and the production and use of bioenergy/biofuel products have potentially lower environmental impacts than their
petroleum counterparts (An, Wilhelm, & Searcy, 2011a; Gold &
Seuring, 2011; Marquardt et al., 2010). Consequently, many countries have set national biofuels targets and provide incentives and
supports to accelerate the growth of bioenergy industry. For example, in the U.S. the Renewable Fuels Standard (RFS), part of the
Energy Independence and Security Act (EISA) of 2007, establishes
an annual production target of 36 billion gallons of biofuels by
2022 (EISA, 2007). Currently most biofuels in the U.S. are made
from corn starch that might have negative implications in terms
of both food prices and production (McNew & Grifth, 2005;
Rajagapol, Sexton, Hochman, Roland-Holst, & Zilberman, 2009).
To avoid adverse impacts on food supply, EISA further species
that 16 out of the 36 billion gallons of renewable fuels produced
in 2022 should be advanced biofuels made from non-starch feedstocks, such as cellulosic or algal biomass. Yet, the current annual
Corresponding author. Tel.: +1 847 467 2943; fax: +1 847 491 3728.
E-mail address: you@northwestern.edu (F. You).
production capacity of advanced biofuels is less than 1 billion gallon worldwide. It is foreseeable that the bioenergy industry will be
undergoing a rapid expansion in the coming decade. Many sustainable and robust biomass-to-bioenergy supply chains, which link the
sustainable biomass feedstock and the nal fuel/energy products,
need to be designed and developed for lower costs, less environmental impacts and more social benets (Elia, Baliban, & Floudas,
2012; Hosseini & Shah, 2011; Sharma, Ingalls, Jones, & Khanchi,
2013). To accelerate the transition towards the large-scale and sustainable production and use of biofuels and bioenergy products,
a signicant challenge in research is to systematically design and
optimize the entire bioenergy supply chains from the biomass feedstock production to the biofuel/bioenergy end-use across multiple
spatial scales, from unit operations to biorenery processes and to
the entire value chain, as well as across multiple temporal scales,
from strategic to operational levels, in a cost-effective, robust and
sustainable manner (Daoutidis, Marvin, Rangarajan, & Torres, 2013;
Marquardt et al., 2010). It is the objective of this paper to identify the key research challenges and opportunities in modeling and
optimization of biomass-to-bioenergy supply chains using Process
Systems Engineering (PSE) tools and methods, and to chart a path
for addressing these challenges.
In this paper, we classify the existing contributions on bioenergy
supply chain optimization, elucidate the research challenges, and
demonstrate that multi-scale modeling and optimization approach
can play a leading role to address these challenges. We rst review
the major biomass-to-biofuels pathways, with a specic emphasis
0098-1354/$ see front matter 2013 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.compchemeng.2013.11.016
Please cite this article in press as: Yue, D., et al. Biomass-to-bioenergy and biofuel supply chain optimization: Overview, key issues and challenges.
Computers and Chemical Engineering (2014), http://dx.doi.org/10.1016/j.compchemeng.2013.11.016
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D. Yue et al. / Computers and Chemical Engineering xxx (2014) xxxxxx
on producing drop-in liquid hydrocarbon fuels from terrestrial

and aquatic biomass, which may blend with or displace gasoline,
diesel, jet fuel, kerosene or home heating oil. We then describe
the key components of the biomass-to-biofuels supply chains and
their major characteristics, along with a comprehensive overview
and classication of the existing contributions on bioenergy supply chain optimization. We further demonstrate the important role
of multi-scale modeling and optimization, which allows the integration across multiple temporal and spatial scales. The potential
research vistas on future bioenergy supply chains that integrate
with petroleum renery supply chains and/or carbon capture and
sequestration systems are presented next. Key issues on modeling
of sustainability and the treatment of uncertainties in bioenergy
supply chain optimization are also discussed. Although the focus
of this paper is on biofuels supply chains, at the end of this paper
we discuss the modeling and optimization for supply chains with
non-fuel end-uses of biomass derivatives, including biopower and
biomass-to-heat supply chains and biomass-to-chemicals supply
chains, which represent other products from biomass and will
impact the supply chain.
2. Biomass-to-biofuels pathways
Biomass is unique among renewable energy sources in that it
can be easily stored until needed and provides a liquid fuel alternative for use in todays transportation system. In the short term,
biofuels are the only renewable resources that can address the
transportation sectors heavy dependence on foreign oil without
replacing the vehicle eet (DOE/EERE, 2013d). In this section, we
review the major pathways from biomass to biofuels, and discuss
the main properties of the feedstocks, fuel products and intermediates. Fig. 1 shows a number of major conversion pathways from
terrestrial and aquatic biomass to intermediates and to nal biofuel
products (DOE/EERE, 2010b, 2011a, 2011b).
2.1. Terrestrial and aquatic biomass feedstocks
Biomass is a renewable resource that acquiries carbon by carbon
dioxide xation during their growing cycles. In comparison to fossil
fuels such as natural gas and coal, which take millions of years to
form, biomass is easy to grow, collect, utilize and replace quickly
without depleting natural resources.
2.1.1. Terrestrial feedstocks
Many types of abundantly available biomass on the land
can be utilized as feedstocks for biofuel production. The 2011
report released by U.S. Department of Energy (DOE) and Oak
Ridge National Laboratory (ORNL) titled U.S. Billion-Ton Update:
Biomass Supply for a Bioenergy and Bioproducts Industry, details
biomass feedstock potential throughout the contiguous United
States at a county level of resolution (DOE/EERE, 2011c). The report
examines the U.S. capacity to sustainably produce over 1.6 billion
dry tons of terrestrial biomass annually for conversion to bioenergy and bioproducts, while continuing to meet existing demand
for food, feed, and ber. The report estimates that the United States
could potentially produce approximately 85 billion gallons of biofuels annuallyenough to replace approximately 30% of the nations
current petroleum consumption.
The terrestrial biomass feedstock can be generally categorized
into two groups. The rst group includes corn grain, sugarcane,
soy bean, oil seed, etc. These feedstocks are rich in sugar or lipids,
and have high yields after converted into bioethanol or biodiesel.
Currently, most biofuels are made from these feedstocks, due to
the maturity in technologies and lower unit production cost. However, the use of these feedstocks for biofuel production might have
implications both in terms of world food prices and production.
The second group of terrestrial biomass feedstocks, the cellulosic biomass, can avoid adverse impacts on food supply, because
they are non-starch, non-edible and non-food feedstocks. Cellulosic
biomass feedstocks can be obtained from a number of sources, such
as agricultural residues, forest residues and energy crops. Agricultural residues are typically plant parts left in the eld after harvest
(e.g., corn stover), as well as the secondary residues like manure and
food processing wastes. Forest residues are leftover wood or plant
material from logging operations, forest management, and landclearing, as well as secondary residues like mill wastes. Dedicated
energy crops (e.g., poplar, switchgrass, Miscanthus) are typically
fast-growing trees and perennial grasses specically grown for
energy uses.
2.1.2. Aquatic feedstocks
Aquatic biomass includes a diverse group of primarily
aquatic, photosynthetic algae and cyanobacteria ranging from the
microscopic (microalgae and cyanobacteria) to large seaweeds
(macroalgae) (DOE/EERE, 2010b).
Many macroalgae, microalgae, and cyanobacteria carry out
photosynthesis to drive rapid biomass growth. Certain strains of
microalgae make extremely efcient use of light and nutrients. As
they do not have to produce structural compounds such as cellulose
for leaves, stems, or roots, and because they can be grown oating
in a rich nutritional medium, microalgae can have faster growth
rates than terrestrial crops. In some cases, algae growth rates can
be an order of magnitude faster than those of terrestrial crop plants.
As algae have a harvesting cycle of 110 days, their cultivation permits several harvests in a very short time-frame, a strategy differing
from that associated with yearly crops. Algae naturally remove and
recycle nutrients (e.g., nitrogen and phosphorous) from water and
wastewater, and can be used to sequester carbon dioxide from the
ue gases emitted from fossil fuel-red power plants. Adding to the
appeal, some strains of microalgae can grow on land unsuitable for
other established crops, for instance: arid land, land with excessively saline soil, and drought-stricken land. This minimizes the
competition on arable land with the cultivation of food crops. More
importantly, algae biomass can contain high levels of oil (lipids or
triacylglycerides), making it a promising feedstock for the production of renewable gasoline, diesel, and jet fuel. Algae can produce
one or even two orders of magnitude more oil per unit area than
conventional crops such as rapeseed, palms, soybeans, or jatropha
(DOE/EERE, 2010b; Hasan & Chakrabarti, 2009).
The cultivation of macroalgae (e.g., seaweed) is similar to that of
terrestrial plants but in aquatic environment. In practice, macroalgae are cultivated in large offshore farms, near-shore coastal zones,
or open pond facilities. In contrast, depending on the type of
microalgae and cyanobacteria, there are various cultivation methods, varying both in their advantages and challenges. Broadly
speaking, algae can be cultivated via photoautotrophic or heterotrophic methods. The former requires light and carbon dioxide
for photosynthesis while the latter requires suitable feedstocks
such as lignocellulosic sugars for growth. The cultivation system
for microalgae and cyanobacteria is either closed bioreactor or open
pond. Closed bioreactor yields less loss of water and better biomass
quality, but has scalability problems. Open pond requires lower
capital costs and take advantage of evaporative cooling, but it is
subject to weather and condition changes and inherently difcult
to avoid contamination and foreign algae (DOE/EERE, 2010b).
2.2. Types and major properties of biofuels
2.2.1. Ethanol and other alcohols
As the rst generation biofuel technology, biomass-derived
ethanol and other alcohols were largely produced from starchor sugar-based biomass, such as corn and sugarcane. Due to the
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Fig. 1. Selected conversion pathways from terrestrial and aquatic biomass to intermediates and to nal biofuel products.
increasing debate on its adverse impact on global food prices, the

research focus on alcohol-based biofuel is shifted to employing cellulosic biomass as feedstock options, which is considered second
generation biofuel technology.
Ethanol is extensively distributed and utilized as a fuel blend
component throughout the U.S. Its low freezing point makes it suitable for use in cold climates. It can be blended with gasoline in
any combination, and it is currently approved as a 10% blend for
all vehicles and as an 85% blend for ex-fuel vehicles. The United
States Environmental Protection Agency (EPA) has also approved
a 15% blend for all vehicles from model year 2001 and newer, yet
the availability of which is very limited. There are, however, several distribution-related challenges associated with ethanol. It is
completely miscible with water and will separate from a gasoline
mixture if enough water is present either in the pipeline or as water
bottoms in a storage tank. In addition, numerous studies have cited
ethanols role in corrosion or stress corrosion cracking of pipeline
walls. Due to all these challenges, many major U.S. pipeline operators expressly prohibit ethanol and ethanolgasoline mixtures in
the pipeline. Therefore, the rail car, barge, and tanker truck are
the principle transportation modes for ethanol, which makes longdistance transportation cost-prohibitive (Bunting, Bunce, Barone,
& Storey, 2010).
As with ethanol, butanol is also an oxygenated fuel that can be
blended with gasoline in any combination and requires only minor
modications for use in existing vehicles. The producers of butanol
claim that butanol is compatible with existing oil pipeline infrastructure, but these claims have yet to be validated. In addition,
butanol has four isomers (molecular arrangements), thus optimization of these isomers from either a manufacturing or fuel
performance standpoint still deserves further research. Note that
most fermentation routes produce a single isomer as the dominant
product (Bunting et al., 2010).
2.2.2. Bio-diesel
The fatty ethyl methyl esters (FAME) is often referred to as
bio-diesel, because it is used extensively as a diesel supplement
due to its similarity to diesel both physically and chemically and
due to its ability to be blended with diesel in any combination.
Three major issues facing FAME bio-diesel distribution are a higher
cloud point than diesel, lower stability, and the cleaning effect.
Furthermore, the polarity resulting from the high oxygen content

in FAME can cause it to cling to pipe or vessel walls, thus posing
potential contamination of subsequent batches if transported in
pipeline. Therefore, FAME is also expressly prohibited by most large
U.S. pipeline operators (Bunting et al., 2010). In addition, vehicle
warranties typically limit FAME blending to 5%.
2.2.3. Drop-in biofuels
Compared to the ethanol and bio-diesel, advanced hydrocarbon
biofuels have the appealing advantage that they are compatible
with existing infrastructure. Known as drop-in fuels, hydrocarbon
biofuels can serve as petroleum substitutes in existing reneries, tanks, pipelines, pumps, vehicles, and smaller engines. These
fuels deliver more energy density than ethanol. Moreover, the conversion processes of hydrocarbon biofuels can also yield a wide
range of bioproducts that can substitute for specialty petrochemicals, helping to replace the whole barrel of oil and enhancing the
economic and environmental sustainability of bioreneries.
These renewable gasoline, diesel, and jet fuels are essentially identical to their existing petroleum-derived counterparts
in properties, except that they are derived from domestic cellulosic biomass sources or algal masses. Advanced hydrocarbon
fuels are believed to be the next generation biofuels, which would
help reduce the carbon footprint and potentially, supply and price
volatility in all transportation sectors, relieve the energy security
issues, and create related job opportunities for a better social equality (DOE/EERE, 2013d; MASBI, 2013).
2.3. Intermediates
2.3.1. Sugars or carbohydrate derivatives
Sugars can be easily obtained from starch- or sugar-rich crops
such as corn and sugarcane. However, to avoid the impact on food
prices, the development focus has shifted to deriving sugars and
other carbohydrate derivatives from lignocellulosic biomass feedstocks. Lignocellulose (mainly lignin, cellulose, and hemicellulose)
is the primary component of plant residues, woody materials, and
grasses. The cell wall structure of these plant matters is partially
comprised of sugar polymers (carbohydrates). Pretreatment and
hydrolysis processes are used to break down the cell wall through
introduction of enzymes in addition to heat and other chemicals
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in order to convert the carbohydrate portion of the biomass into

an intermediate sugar stream. These sugars can serve as intermediate building blocks that can be further fermented or chemically
catalyzed into a range of advanced biofuels and value-added chemicals.
One major obstacle to developing a cost-competitive conversion
pathway is the efciency of separating and converting cellulosic
biomass into sugars. Starch and sugars function as food storage for
the plant, while lignocellulose is structural and designed to restrict
rapid metabolism. Due to the recalcitrant nature of the cell wall,
it is often difcult and complicated to completely hydrolyze the
carbohydrate components into sugars and usable intermediates,
making this material expensive to convert to biofuels (DOE/EERE,
2011a; Melero, Iglesias, & Garcia, 2012).
2.3.2. Lipids
Lipids can be derived from a variety of sources usually through
physical extraction processes. The most common approach is from
oil seed plants that are abundant in oil content such as rapeseed
and soybean in temperate climates and palm in tropical climates.
Another approach is from animal fats (tallow), which are a byproduct of meat production and cooking. Though still under research,
the largest potential impact is to extract lipids from algae. It is
reported that certain strains of algae may have order-of-magnitude
higher yield of lipids compared to the vegetable and animal origin
sources.
Note that the term lipids refers not to a single chemical but
constitute a group of molecules including monoglycerides, diglycerides, triglycerides, phospholipids, fatty acids, and others. The
lipids derived from various biomass sources may signicantly differ in compositions. These fatty acid esters can be used to produce
bio-diesel via transesterication process or converted to hydrocarbon biofuels via hydrotreating, catalytic cracking and metathesis
processes (Fahy et al., 2005). It is reported that hydrotreated esters
of fatty acids (HEFA) are one of the two biofuels that have received
American Society for Testing and Materials (ASTM) approval for
aviation (MASBI, 2013).
2.3.3. Syngas
Syngas derived from biomass usually via gasication process is
a gas mixture composed mainly of CO and H2 . Syngas is normally
used as a feed to manufacture FischerTropsch fuels, which are the
other ASTM approved aviation fuels (MASBI, 2013). Additionally,
syngas can also be used as a fuel for heat supply. The hydrogen
is useful for hydrotreating operations, necessary to upgrade fuels
and to remove impurities. If shipped long distances, syngas would
require a distribution infrastructure similar to that required by
natural gas. However, additional modications and maintenance
are needed to prevent syngas leaks, as the hydrogen component is
prone to leaks and the carbon monoxide component is highly toxic
(Bunting et al., 2010).
2.3.4. Bio-oil
Bio-oil, also known as pyrolysis oil, is a promising bio-crude produced from biomass feedstocks undergoing pyrolysis processes,
which can be further upgraded via hydroprocessing to produce
hydrocarbon biofuels and other bioproducts (Ringer, Putsche, &
Scahill, 2006). Adding to the appeal, most biomass sources can be
pyrolyzed, creating signicant potential for this conversion route.
There are, however, several signicant issues associated with its
distribution in and compatibility with the crude pipeline infrastructure. Bio-oil can have a very high oxygen and water content.
It is highly corrosive and chemically unstable due to the high char
and solid contents. In addition, its alkali metals content can lead to
fouling and contribute to catalyst poisoning. The higher viscosity
of pyrolysis oil compared to petroleum crude requires increased
pumping work. Its polarity due to high oxygen content causes

pyrolysis oil more likely to cling to pipe and vessel walls. After all,
due to its promising potential to replace the petroleum crude, there
is signicant research on stabilizing and upgrading pyrolysis oils
(Bunting et al., 2010).
3. General structures and key components of
biomass-to-biofuels supply chains
Development of the U.S. advanced bioenergy industry will lead
to the establishment of many manufacturing supply chains of
hydrocarbon biofuels, which link the sustainable biomass feedstocks with the nal biomass-derived gasoline, diesel and jet fuel
products through the following ve major components: biomass
production system, biomass logistics system, biofuel production
system, biofuel distribution system and biofuel end-use (Gold &
Seuring, 2011; Iakovou, Karagiannidis, Vlachos, Toka, & Malamakis,
2010). Although these ve elements are similar to those in a
petroleum-to-fuel supply chain, they could not be investigated
with same systematical framework due to the differences in feedstocks and products, and consequently different strategies for
production, transportation and storage (An et al., 2011a; Sharma
et al., 2013).
3.1. Feedstock supply and logistics
Feedstock production and logistics components of the supply
chain deliver high-quality, stable, and infrastructure-compatible
feedstocks from diverse biomass resources to bioreneries. For
terrestrial biomass, a main challenge is to develop an efcient
feedstock supply system for cost-effective and time-sensitive collection, preprocessing, storage, and transport, in order to deliver
diverse consistently high-quality terrestrial biomass for conversion.
3.1.1. Seasonal supply and storage
One of the critical challenges in the operation of biofuel supply chains is the seasonal nature and annual variability of biomass
supply. Most biomass resources are plant matters, which need to be
planted, cultivated, and harvested, going through a growing cycle.
Crop residues are usually collected after the harvest of the agricultural crops. For instance, the corn stover in the U.S. Corn Belt
is mainly harvested from September through November (USDA,
2010). The wood residues are grown over multiple years, which
makes them less seasonal compared to crop residues. They are
usually available all year round. However, the yields may vary in
different months. For instance, it might be more difcult to collect
the wood residues during snowing seasons. In addition, it is also
reported that the harvesting timing and frequency may affect the
yields of energy crops, thus careful planning and scheduling would
be necessary in order to guarantee the quantity and quality of the
biomass supply (Sokhansanj et al., 2009).
The biomass supply may be discrete due to the seasonality, but
the demand for transportation fuels is all-year-round. Therefore,
the resulting operational challenge is to manage the biomass storage in order to maintain a continuous supply for the production at
bioreneries.
3.1.2. Pre-treatment and degradation properties of biomass
The storage of biomass resources can take place in various
modes. As the cheapest option, ambient storage leads to signicant
cost reduction at the storage and handling stage of the biomass
supply chain. However, side-effects may include biomass degradation (e.g. silage), heating value reduction, and potential health risks,
mainly because of the presence of high water content. The degradation rate is estimated to be 1% material loss/month for the ambient
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storage (Rentizelas, Tolis, & Tatsiopoulos, 2009b). To reduce the

degradation, covered storage in pole-frame structures is often used
in practice, incurring a 0.5% material loss/month rate. If a higherquality biomass supply is required, a closed warehouse with hot
air drying capability can be employed. The material loss in this scenario can be assumed negligible (Cundiff, Dias, & Sherali, 1997). As
can be seen, the tradeoff between storage cost and material loss is
the focus when determining the selection of storage modes.
In addition to the direct storage of raw biomass, pretreatment
processes on raw biomass materials are also adopted in many practices. In this scenario, after the biomass has been harvested, thermal
and chemical treatments are applied to reduce moisture content,
remove contaminants, and improve feedstock quality, stability,
and processing performance, including torrefaction, pelletization,
fast pyrolysis, ammonia ber expansion (AFEX), etc. (Bals, Rogers,
Jin, Balan, & Dale, 2010; Uslu, Faaij, & Bergman, 2008). Ongoing
research is trying to develop an advanced uniform-format feedstock supply system, aiming to reduce the variability in biomass
(both format and quality). The products of this system are supposed to be standard, consistent, quality-controlled commodities
that can be efciently handled, stored, transported and utilized by
bioreneries. Major technologies may involve milling, densication, torrefaction, blending and pelletization (DOE/EERE, 2013a).
3.1.3. Logistics
The logistics of biomass plays an important role in the bioenergy
supply chain, because it integrates time-sensitive feedstock collection, storage, and delivery operations into efcient, year-round
supply systems that deliver consistently high-quality biomass.
Unlike fossil fuels, biomass resources have a sparsely spatial distribution. Both the biomass collection and delivery require extensive
efforts in equipment selection, shift arrangement, vehicle routing,
and eet scheduling (DOE/EERE, 2013c). Moreover, if independent
pretreatment depots are built to provide uniform-format feedstocks, of which the location should be cautiously determined in
the supply chain design phase. A depot would locate to facilitate
the transportation and production, and serve like a small satellite system which receives biomass of different types and various
sources from its neighborhood and then forward the converted
uniform-format biomass to a network of much larger supply terminals (DOE/EERE, 2013a).
3.2. Biomass conversion in advanced biorenery
Conversion of biomass into commercially viable liquid fuels
is another main component of the supply chain. A biorenery is
a facility that integrates conversion processes and equipment to
convert biomass into biofuels, power and chemicals. The biorenery is analogous to a petroleum renery, but could have reduced
environmental impact and consumes less fossil energy because of
its diversication in feedstocks and products. Broadly speaking,
biomass-to-liquid conversion technologies can be classied into
two categories, namely biochemical and thermochemical (Anex
et al., 2010).
3.2.1. Biochemical technologies
The major biochemical conversion processes include pretreatment, hydrolysis, biological or chemical processing, and product
upgrading and recovery. During pretreatment, biomass materials undergo a mechanical or chemical process to fractionate the
lignocellulosic complex into soluble and insoluble components.
Soluble components include mixtures of ve- and six-carbon sugars and some sugars oligomers. Insoluble components include
cellulosic polymers and oligomers and lignin. The main purpose
of pretreatment is to break down the plant cell walls to permit
further deconstruction during the hydrolysis step. Note that the
quantity and composition of the sugars stream released depend on

the feedstock used and the pretreatment technology employed. A
hydrolysate conditioning and/or neutralization process is used to
adjust the pH of and purify the pretreated material. In hydrolysis,
the pretreated material, primarily cellulose, is guided through a
chemical reaction that releases the readily fermentable sugar, glucose. This step is usually accomplished with enzymes or strong
acids. The conversion from sugars to biofuels can take place in
two ways: biological and chemical processing. In biological processing, the most common approach is to introduce a fermenting
microorganism to the biomass hydrolysates. The continued saccharication and fermentation may take a few days to convert all
sugars to biofuels or other chemicals of interest. On the other hand,
a catalyst is added in chemical processing to make the reaction
less energy intensive and thus more efcient than biological fermentation. Furthermore, the yields of different end products and
intermediate chemicals can be adjusted while using different reactions and catalysts. The purpose of the nal step, product upgrading
and recovery, is to separate the fuel from the water and residual
solids, which could involve any transformation, distillation, separation, and cleanup processes (Biddy & Jones, 2013; Davis, Biddy,
Tan, Tao, & Jones, 2013b; DOE/EERE, 2011a).
3.2.2. Thermochemical technologies
The thermochemical technologies utilize high temperature in
addition to catalysts to change the physical properties and chemical
structures of the biomass resources. There are two major thermochemical reaction pathways: gasication and pyrolysis (DOE/EERE,
2011b).
3.2.2.1. Gasication. In the gasication pathway, the lignocellulosic biomass resources are fed into a gasier, where they are
thermally decomposed (7001300 C) with limited or no oxygen,
and then oxidized to yield a raw syngas, which is primarily a
mixture of hydrogen and carbon monoxide. The raw syngas may
contain some contaminants, including tars, acid gas, ammonia,
alkali metals, and other particulates. Therefore, a gas cleanup process is necessary to produce a contaminant-free syngas product. If
necessary, the gas may be further conditioned to lower the sulfur
levels and adjust the hydrogen to carbon monoxide ratio. The syngas can then be utilized by the FischerTropsch synthesis, including
a collection of chemical reactions, to produce hydrocarbon liquid
fuel products (DOE/EERE, 2010a; Swanson, Satrio, Brown, Platon,
& Hsu, 2010; Talmadge, Biddy, Dutta, Jones, & Meyer, 2013). Alternatively, methanol and hydrogen can be produced from the syngas
via methanol synthesis and watergas-shift process, respectively.
3.2.2.2. Pyrolysis. Pyrolysis processes also heat biomass in the
absence of oxygen, but at a relatively lower temperature
(450600 C). The main product of the pyrolysis process is a crudelike liquid known as pyrolysis oil, while gas and charcoal are also
produced. Depending on the length of the reaction time, there
are slow pyrolysis, intermediate pyrolysis, and fast pyrolysis. Fast
pyrolysis is often adopted because the yield of pyrolysis oil is
maximized. Oil produced in pyrolysis processing must have particulates and ash removed by ltration to create a homogenous
product. The pyrolysis oil is then upgraded to desired hydrocarbon fuels via hydrotreating and hydrocracking processes to
reduce its total oxygen content and to break down long-chain
hydrocarbons (DOE/EERE, 2010a; Jones et al., 2009; Wright, Satrio,
Brown, Daugaard, & Hsu, 2010). Furthermore, National Advanced
Biofuels Consortium (NABC) is investigating advanced conversion
technologies such as catalytic fast pyrolysis, hydropyrolysis, and
hydrothermal liquefaction (NABC, 2013).
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3.2.3. Algae harvesting and conversion

Microalgal species accumulate lipids such as triacylglycerols
(TAG), while cyanobacteria and macroalgae accumulate mostly
carbonhydrates. Microalgae and cyanobacteria are in very small
size (1 to 30 m), in suspension in water culture, which makes
harvesting more difcult. Harvesting methods like forced occulation, sedimentation, ltration and centrifugation are generally
used. Drying is required to achieve high biomass concentrations.
In contrast, harvesting of macroalgae (e.g., seaweeds) is very much
similar to that of terrestrial agricultural crops. Modern mechanized machines and equipment can be employed in large off-shore
macroalgae farms. Washing and dewatering are required. In addition, due to the large size of macroalgae, milling is needed to reduce
macroalgae to particle sizes that can be more efciently processed
(Lundquist, Woertz, Quinn, & Benemann, 2010).
Depending on the type of algae and targeting end products, there
are three algae conversion pathways: conversion of algal extracts,
direct production of biofuels from algae, and processing of whole
algae (DOE/EERE, 2010b). The conversion from extracts derived
from algal sources is the typical mode of biofuel production from
algae. The most common type of algal extracts is lipid-based. Current practices for lipid extraction involve mechanical disruption,
solvent extraction, and supercritical technologies. The extracted
lipids can then be converted into bio-diesel, advanced hydrocarbon
biofuels, and other high-value chemicals via chemical transestercation, enzymatic conversion, and catalytic cracking. The direct
production refers to heterotrophic fermentation and growth from
algal biomass. It has certain advantages in terms of process cost
because it can eliminate several process steps (e.g., oil extraction)
and their associated costs. The system is readily scaled up and there
is an enormous potential to use various xed carbon feedstocks.
Biofuels that can be produced directly from algae include alcohols,
alkanes, and hydrogen. In addition, processing of whole algae is also
considered a promising algae biofuel solution. Potential conversion methods include gasication and pyrolysis, which are widely
employed for cellulosic biomass, as well as supercritical processing
and anaerobic digestion of whole algae. These methods avoid the
costs associated with the extraction processes and are amenable to
processing a diverse range of algae (Davis, Aden, & Pienkos, 2011;
Davis, Biddy, & Jones, 2013a; FAO, 2009). However, extraction is
still preferred when oil content is high to leverage the entropic
investment by the organism.
3.3. Fuels distribution and end-use system
The last components in the biofuels supply chain are the fuel
distribution and end-use systems, which ensure that biomassderived fuel products can cost-effectively and sustainably reach
their market and be used by consumers as a replacement for
petroleum-based fuels.
3.3.1. Infrastructure incompatibility of rst generation biofuels
Although bio-ethanol and bio-diesel represent the major
biomass-derived transportation fuel products in the current marketplace, as mentioned before, bio-ethanol and bio-diesel are
banned by most U.S. pipeline operators due to their polarity
and other corrosion, contamination issues. Therefore, the current
supply chains for ethanol and bio-diesel require dedicated fuel distribution and blending systems (Bunting et al., 2010). The most
common practice is to transport bio-ethanol or bio-diesel from the
biofuel production facility to distribution terminals by train, barge,
or truck to minimize the opportunity for contact with water and
dirt, which makes it difcult for shipping larger volumes of biofuels. The biofuels are kept in dedicated tanks until blended with the
corresponding fossil fuels (ethanol with gasoline and FAME with
diesel). Once blended, the nal fuel products are delivered to retail
stations by tanker trucks. This process is reasonably economical in

areas that have easy access to abundant biomass supply and biofuel production facilities, e.g., Midwest regions. However, it is not
an attractive option for long-distance delivery, especially as volume
increases. One impact of the distribution supply chain, is that the
Midwest has become a net exporter of starch ethanol via barges on
the Mississippi while the West Coast has become an importer of
sugarcane ethanol (DOE, 2010; NCEP, 2009; USDA, 2007).
3.3.2. Features of drop-in fuels
In contrast, drop-in biofuels that are highly compatible, or
totally fungible, with the existing hydrocarbon fuel nishing, fuel
handling, distribution, and end-use infrastructure would result
in easier and more widespread market acceptance (DOE/EERE,
2010b).
Hydrocarbon biofuels can be used directly in the existing
pipelines, dispensers and vehicle engines without any additional
effort, because these advanced biofuels are the same in properties
as their petroleum counterparts and compatible with the existing
infrastructure. Thus, the remaining challenge in the modeling and
optimization of supply chains for these infrastructure-compatible
biofuels is to address the full scale integration with the existing
petroleum renery processes and distribution supply chains. In the
short term, the introduction of advanced biofuels to existing distribution systems may require capacity expansion and additional
scheduling efforts to coordinate with the fossil fuels. However, it
is believed that, the advanced hydrocarbon biofuels would become
the major stream and play a more important role in the fuel distribution infrastructures in the future (DOE/EERE, 2013d; MASBI,
2013).
4. Literature review
There is a large body of literature regarding the modeling
and optimization of biofuel supply chains, covering different
feedstocks, products, processes, system properties, and modeling viewpoints. The recent journal and conference papers closely
related to the subject are summarized in Table 1. The articles are
sorted in chronological order. The articles published in the same
year are sorted in alphabetical order by last name of the authors. A
number of the works may cover multiple aspects, thus occupying
multiple cells in the table, which indicates that a holistic optimization model for modeling and optimization of biofuel supply chains
can be multi-scale, multi-perspective, and multi-criterion.
The column food crops to ethanol, biodiesel represents
the biofuel supply chains using rst-generation biofuel technologies. These supply chains typically use starch- or oil-based food
crops as feedstocks to produce ethanol and biodiesel, which can
be blended with petroleum-based gasoline and diesel. These technologies are commercialized and have a signicant penetration
in the current transportation liquid fuel markets. However, the
rst-generation biofuel technologies are often criticized on their
implications on food prices and production. The column cellulosic biomass to ethanol, biodiesel represents the biofuel supply
chains using second-generation biofuel technologies. These supply
chains use crop residues, wood residues, or dedicated energy crops
as feedstocks, thus avoid the potential impact on food markets. Nevertheless, ethanol and biodiesel are not the ideal substitutes to fossil
fuels, because they are not completely compatible with the existing
distribution and end-use infrastructure. The column cellulosic
biomass to hydrocarbon biofuels represents the biofuel supply
chains using third-generation biofuel technologies. They are able
to produce cellulosic-biomass-derived transportation fuels with
properties that are functionally identical to their petroleum-based
counterpart. At the current stage, the third-generation biofuel
Cellulosic biomass to ethanol,

biodiesel
Cellulosic biomass to
hydrocarbon biofuels
Supply chain design
Mele, Guillen-Gosalbez,
and Jimenez (2009),
Zamboni, Bezzo, and Shah
(2009a), Zamboni, Shah,
and Bezzo (2009b),
Eksioglu, Li, Zhang,
Sokhansanj, and Petrolia
(2010), Akgul, Zamboni,
Bezzo, Shah, and
Papageorgiou (2011),
Corsano, Vecchietti, and
Montagna (2011), Dal-Mas,
Giarola, Zamboni, and
Bezzo (2011), Mele, Kostin,
Guillen-Gosalbez, and
Jimenez (2011), Bai et al.
(2012)
Dunnett et al. (2008), Eksioglu,

Acharya, Leightley, and Arora (2009),
Cucek, Lam, Klemes, Varbanov, and
Kravanja (2010), Huang, Chen, and
Fan (2010), Leduc, Lundgren,
Franklin, and Dotzauer (2010a),
Leduc et al. (2010b), Parker et al.
(2010), Tittmann, Parker, Hart, and
Jenkins (2010), Aksoy et al. (2011),
An, Wilhelm, and Searcy (2011b),
Bai, Hwang, Kang, and Ouyang
(2011), Gan and Smith (2011),
Giarola, Zamboni, and Bezzo (2011),
Santibanez-Aguilar,
Gonzalez-Campos, Ponce-Ortega,
Serna-Gonzalez, and El-Halwagi
(2011), Akgul, Shah, and
Papageorgiou (2012), Avami (2012),
Bernardi et al. (2012), Chen and Fan
(2012), Chen and Onal (2012), Cucek,
Varbanov, Klemes, and Kravanja
(2012), Marvin, Schmidt, Benjaafar,
Tiffany, and Daoutidis (2012), You
et al. (2012), Bernardi et al. (2013)
Leduc, Natarajan, Dotzauer,

McCallum, and Obersteiner
(2009), Parker et al. (2010),
Tittmann et al. (2010), Aksoy
et al. (2011), Bowling,
Ponce-Ortega, and El-Halwagi
(2011), Elia, Baliban, Xiao, and
Floudas (2011), Kim, Realff, and
Lee (2011a), Kim, Realff, Lee,
Whittaker, and Furtner (2011b),
Papapostolou, Kondili, and
Kaldellis (2011), You and Wang
(2011), Elia et al. (2012),
Gebreslassie, Yao, and You
(2012), Walther, Schatka, and
Spengler (2012), Yue et al.
(2013b)
Planning and operation
Sharma, Sarker, and Romagnoli

(2011), Avami (2012)
Selection of technologies
Cucek et al. (2010), Parker et al.

(2010), Tittmann et al. (2010),
Santibanez-Aguilar et al. (2011),
cek et al. (2012a,b),
Avami (2012), Cu
You et al. (2012)
Dunnett et al. (2008)
Decentralized production
Multi-objective optimization
Zamboni et al. (2009a),

Mele et al. (2011)
Sustainability
Mele et al. (2009), Zamboni

et al. (2009a), Corsano et al.
(2011), Mele et al. (2011)
Uncertainties
Dal-Mas et al. (2011)
Game theory
Simulation models
Bai et al. (2012)
Giarola et al. (2011),

Santibanez-Aguilar et al. (2011),
cek et al.
Bernardi et al. (2012), Cu
(2012a,b), You et al. (2012), Bernardi
et al. (2013)
Cucek et al. (2010), Giarola et al.
(2011), Santibanez-Aguilar et al.
(2011), Avami (2012), Bernardi et al.
cek et al. (2012a,b), You
(2012), Cu
et al. (2012), Bernardi et al. (2013)
An et al. (2011b), Gan and Smith
(2011), Avami (2012), Chen and Fan
(2012), Marvin et al. (2012)
Parker et al. (2010), Tittmann

et al. (2010), Sharma et al.
(2011), You and Wang (2011),
Gebreslassie et al. (2012), Yue
et al. (2013b)
Bowling et al. (2011), Kim et al.
(2011a), Kim et al. (2011b), You
and Wang (2011), Yue et al.
(2013b)
You and Wang (2011),
Gebreslassie et al. (2012), Yue
et al. (2013b)
Elia et al. (2011), You and Wang

(2011), Elia et al. (2012), Yue
et al. (2013b)
Algae to biofuels
Biomass to power, heat, food, etc.

Tatsiopoulos and Tolis (2003),
Dunnett, Adjiman, and Shah
(2007), Rentizelas, Tatsiopoulos,
and Tolis (2009a), Cucek et al.
(2010), Leduc et al. (2010b),
Tittmann et al. (2010),
Velazquez-Marti and
Fernandez-Gonzalez (2010),
Aksoy et al. (2011), Elia et al.
(2011), Gan and Smith (2011),
cek et al. (2012a,b), Elia et al.
Cu
(2012), Keirstead, Samsatli,
Pantaleo, and Shah (2012)
Avami (2012)
Frombo, Mindardi, Robba, Rosso,

and Sacile (2009), Flisberg, Frisk,
and Ronnqvist (2012)
Frombo et al. (2009), Cucek et al.
(2010), Tittmann et al. (2010),
cek et al. (2012a,b), Keirstead
Cu
et al. (2012)
Food crops to ethanol,

biodiesel
cek et al. (2012a,b)

Cu
cek et al.
Cucek et al. (2010), Cu
(2012a,b)
Leduc et al. (2009), Kim et al.

(2011a), Gebreslassie et al.
(2012), Walther et al. (2012)
Ferreira and Borenstein (2011)
Mobini, Sowlati, and Sokhansanj

(2011)
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Components
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Table 1
Summary of some recent publications on the modeling and optimization of biofuel supply chains.
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technologies are relatively mature and the corresponding supply chain design and optimization is desired for commercial-scale
implementation. The column algae to biofuel represents the
supply chains using fourth-generation biofuel technologies, which
produce various liquid fuels and chemicals from lipids and/or
hydrocarbons in algae feedstocks. Compared to other columns,
there is a signicant lack of studies on these nascent technologies, mainly because of the scarcity of credible data and references.
Processes regarding algae cultivation, harvesting, and conversion
need to be well classied and documented before the supply chain
modeling and optimization can be implemented. The last column
biomass to power, heat, food, etc. includes supply chains
with non-fuel uses of biomass resources, which provide electricity and heat supply to surrounding communities or produce foods
and other valuable chemical products. As can be seen, the large
body of literature in this column indicates the importance of these
non-fuel biomass utilization pathways.
By observing the rows of Table 1, we can see that most research
works focused on supply chain design, mainly involving the
transportation network design and biorenery facility location
problems. A few studies integrated the planning and operation of
bioreneries into the supply chain models, thus achieving a higher
resolution in both spatial and temporal scales. We note that earlier
works on the design of biofuel supply chains seldom considered the
selection of technologies. However, as more and more conversion options become available, selection of technologies become
a critical component in the recent works on supply chain design
and optimization. As will be further discussed in later sections,
decentralized production is a relatively new concept, mainly
emerging from the design of advanced hydrocarbon biofuel supply
chains, which suggests that the traditional integrated biorenery
can be decomposed into multiple conversion steps in multiple
geographically distributed production facilities. Multi-objective
optimization is required when conicting objectives are considered simultaneously. This often involves the tradeoff between
economic, environmental and social performances of the supply
chain as well as the risks associated with design and operation.
Since biofuels are considered as a renewable energy alternative
to fossil fuels, the sustainability issues deserve further attention to avoid introducing adverse impacts on the ecosystem and
human society. Some works employed the life cycle analysis (LCA)
methodology to assess the environmental impacts (e.g., greenhouse
gas emissions), while some addressed job creation opportunities
brought by the biofuel value chains. While most models considered
the design and operation of biofuel supply chains under deterministic environments, some recent works investigated the performance
of a biofuel supply chain system in the presence of various uncertainties (e.g., price volatility, yield uncertainty). Instead of treating
the biofuel supply chain system as a cooperative entity, we can also
view the biofuel supply chain system as a value chain composed
of different parties, who are acting selshly and in a noncooperative manner. Few existing works utilized game theory and spatial
market equilibrium to model the inter-relationships in biofuel supply chains. In addition to mathematical programming approaches,
simulation models are also useful tools for the study of biofuel
supply chains, which can easily capture dynamics in complex systems and provide process data for the optimization.
5. Multi-scale modeling and optimization

While most works provide a great insight to specic elds, they
may fall into a narrow perspective and do not cover sufciently
all the aspects of the biofuel supply chain. Therefore, we need a
multi-scale modeling and optimization framework to provide a
holistic view and organically integrate the different components of
the biofuel supply chain (Hosseini & Shah, 2011). In this paper, we
portray a schematic framework of multi-scale modeling and optimization for biofuel supply chains in Fig. 2. From bottom to top,
four system layers regarding different temporal and spatial scales
typify the level of ecosystem, supply chain, process, and molecule,
respectively.
At the ecosystem layer, the ecosystem and human society constitute the environment where various activities in biofuel supply
chains take place. All these activities would cause impacts and footprints on the ecosystem throughout the life cycle and value chain
of the biofuel products, involving biomass cultivation, biomass harvesting and logistics, biomass pretreatment and fuel production in
conversion facilities, and fuel distribution and end-use. Modeling
and optimization tools can be applied to simultaneously evaluate and identify the sustainable solutions with minimum adverse
impacts on the environment and maximum benets to the society. Since multiple conicting objectives are often involved when
optimizing the sustainability of biofuel supply chains, a number
of multi-objective optimization techniques can be applied, such as
epsilon-constraint method, goal programming method, etc. Triangle charts can be used for comparison between different solutions
with different economic, environmental, and social performances.
Pareto frontiers obtained from multi-objective optimization can
reveal the tradeoffs between conicting objectives and provide a
set of Pareto-optimal solutions for decision-making.
At the supply chain layer, modeling and optimization tools
can play an important role in optimizing the supply chain network structure and improving the various activities involved in the
installation and operation of biofuel supply chains. A biofuel supply chain usually consists of multiple sites and multiple echelons,
which requires coordination across the entire supply chain network
(You, Grossmann, & Wassick, 2011). At the design stage, superstructure optimization allows the decision maker to determine the
optimal network design from a number of choices among candidate
suppliers, facility locations, technology options, transport modes,
etc. By using mathematical programming approaches, description
of the various activities, even across multiple sectors, can be easily
interpreted into equations in the constraints or objective functions.
However, a comprehensive and detailed superstructure, though
appealing, may be computationally intractable. Therefore, when
modeling the biofuel supply chain systems, we should take advantage of the properties of the supply chain system (e.g., network
structure, spatial scale) and drop off the components that have negligible inuences on the optimization objectives to trade off the
modeling resolution and computation efciency.
At the process layer, the processes and units at a production
facility are studied in a more detailed manner. Superstructurebased optimization can again be employed for the design, synthesis,
and retrot of conversion processes, involving the selection
among candidate processing methods, equipment units, catalysts,
resource supply scenarios, etc (Yeomans & Grossmann, 1999).
Regarding the operation at a biorenery, three levels of decisions need to be optimized, namely planning, scheduling, and
control. Optimization for planning involves the development of
robust forecasting model, multi-year strategy for capacity expansion and process retrot, multi-period targets for purchase, sales
and production, etc. Optimization for scheduling involves the efcient and timely allocation of equipment units, raw materials, and
human labors to fulll the external and internal orders. Optimization for control involves real-time monitoring and adjustment of
process parameters to meet the required quantity and quality of
the products. The three decision levels are closely related, thus also
providing enormous opportunities for vertical integration (Chu &
You, 2012; Engell & Harjunkoski, 2012; Wassick et al., 2012).
At the molecule level, modeling and optimization tools can
be employed by researchers with diverse background to facilitate
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Fig. 2. Illustration of multi-scale modeling and optimization of biofuel supply chains.
their studies on biomass-to-biofuel conversion technologies, both

theoretical and experimental. Optimization tools can help to identify the promising reaction pathways that are cost-effective and
sustainable, thus saving unnecessary efforts in experimental trials. Furthermore, studies in molecular engineering, bioengineering,
and multi-physics simulation can be guided by the system engineering approaches, while in return serve as the practical basis for
upper-level modeling and optimization.
As illustrated by the arrows on the left of Fig. 2, the system

scale addressed in the model grows from top to bottom, whereas
the practical details considered in the model increases from
bottom to top. The double-headed arrows between adjacent
layers indicate that the modeling layers are never isolated but
closely inter-connected. Generally speaking, the lower layer
conveys target or requirement to the higher layer, whereas the
higher layer provides detailed data which serve as building
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blocks for the modeling and optimization of the lower

layer.
5.1. Multi-scale decisions
The optimization of biofuel supply chains requires considering
all the components across the entire biomass-to-biofuels supply
chain in a comprehensive model that allows the effective integration of long term strategic design decisions with short term
operational planning and scheduling decisions, which will be discussed respectively in this section (Sharma et al., 2013).
5.1.1. Strategic decisions
The strategic decisions are those decisions that have an inuence over years and decades, and even beyond the lifetime of the
project. Once a strategic decision is made, it is very unlikely to
be altered in the short term. The rst and most critical strategic
decision is the design of biofuel supply chain network. We can
construct a superstructure to optimize the selection of biomass
suppliers, location of conversion facilities, assignment of customer
serving areas, and transportation links that connect different sites
and deliver the biomass/biofuel across the supply chain network.
Geographic information system (GIS) can be employed to visualize
the spatial conguration of biomass resources, candidate sites, fuel
demand densities, etc., thus facilitating the modeling process (Esri,
2012). The major tradeoff in the design of biofuel supply chain is
between the costs of transportation and the capital and production costs of production facilities, because the transportation costs
account for a signicant portion in the biofuel supply chain while
the construction of production facilities may not necessarily benet from the economy of scale. Besides, the selection of conversion
technologies and corresponding infrastructures is also an important strategic decision. Because different conversion technologies
may vary in capital and operational costs, biofuel productivity and
requirement for biomass resources, optimal selection of conversion
technologies may depend on the level and distribution of biomass
availability and fuel demand, as well as the local restriction and
policy at the facility candidate sites. Binary variables can be used
to represent the selection of processes and conversion pathways
at the supply chain level, and the selection of catalysts, equipment units, operation conditions and processing methods at the
process level. When evaluating the economic objectives (e.g., net
present value, annualized total cost), besides the conventional costs
for construction, materials, and labors, we should also take into
account the government incentives (both construction and volumetric) and additional credits from selling the by-products (e.g.,
bio-char) (DOE/EERE, 2013b). Another perspective to note is that
the conguration of the biofuel supply chain may not be static but
can evolve over time. With the wide acceptance of biofuel products and increasing incentives, capacity expansion and technology
upgrading on top of the existing biofuel supply chain system may
be desired in the future. Particularly, it may be possible to adapt the
multi-period planning models proposed for generic supply chains
to biofuel supply chains.
5.1.2. Operational decisions
Operational decisions are those decisions that are adjusted more
frequently in correspondence to the current external and internal conditions, which usually have impacts for no less than a year
or even a day. Due to the large number of activities involved
in the biofuel supply chain, optimization models for operational
decisions vary signicantly in scale, complexity and formulation.
At the biomass acquisition phase, operational decisions involve
how to allocate the operators to harvesting machines, how to
arrange the working shifts, how to assign the harvesting operation
areas, how to convey the harvested biomass to storage units, etc.
Optimization models regarding vehicle routing and eet scheduling can be employed to cope with these problems. At the logistics
phase, one needs to gure out the optimal inventory policies
regarding how much to replenish from the upstream, how much to
deliver to the downstream, how much to utilize for the production
of intermediates or fuel products, and what level of inventory to
keep in the storage units. These problems become more challenging
as the supply of several types of biomass feedstocks would be subject to season-to-season changes and limited in certain months of a
year. Lots of tools and theories developed for generic supply chains
can be incorporated for inventory optimization in biofuel supply chains, including sophisticated forecasting models, enterprise
resource planning (ERP) system, material allocation rules, service
level measurements, information ow structure, etc. At the production phase, major operational decisions involve the coordination of
various material ows and scheduling of multiple processing tasks
with continuous/batch equipment units in order to guarantee the
timely delivery of requested products both in quantity and quality. Extensive studies on planning and scheduling in petroleum
and chemical production industries can be adapted to study the
problem. Additionally, in cases that the quality and water content of biomass feedstocks vary signicantly, optimization of the
operational parameters (e.g., temperature, pressure, ow rate) and
real-time control trajectory would be required. Advanced control
algorithms and dynamic simulation models exploiting the physical and thermodynamic properties are helpful for handling these
problems.
5.2. Uniqueness in biofuel supply chains

Compared to their petroleum counterparts, some major components in the supply chain systems for biofuel products are similar
in function but different in structure and property. The most significant difference is at the raw material acquisition stage. Petroleum
emerges from point sources like drill shafts, guarantees perennial
supply and can be hauled over long distance with minimum transport costs. However, the raw biomass feedstock, as a low-energy
density solid rather than a high-energy density liquid, is inherently distributed over a large area and is subject to seasonality,
thus requiring considerable collection and transportation efforts
and large storage volumes (DOE/EERE, 2013c).
From the aspect of supply chain design, the locations of biomass
processing facilities should be optimized in order to reduce the
transportation cost of low-energy density solid biomass resources
from surrounding biomass suppliers (e.g., farms, forests, paper
mills) and to lower the capital and operational costs. The capacities of the biomass processing facilities should be able to meet the
requirement in peak times and might be worth it to be repurposed
for part of the year. If a exible processing facility able to treat
different types of biomass resources is built, multi-period planning
can be utilized to schedule the shifts of biomass suppliers according
to the feedstock availability in each month.
From an operational point of view, the biomass is costprohibitive and unstable for long-distance transport because of its
low energy density and high water content. In the modeling practice, a circle around the biomass supplier is often specied as the
feasible region for building biomass processing facilities, of which
the radius equals to the feasible distance for raw biomass transportation (Uslu et al., 2008). Considering the low transport density
of biomass resources, both volume and weight limits may be specied for the capacity of transportation links (You, Tao, Graziano, &
Snyder, 2012). In addition, degradation of biomass resources also
makes the storage more difcult to handle. A linear monthly rate of
material loss is usually assumed, varying in the storage technology
used. Correspondingly, we can incorporate in our model a mass
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balance on biomass inventory accounting for the material loss at

each biomass processing facility and in each month.
Table 2
Total discounted capital, production, and transportation costs of the three designs
under different side length of the square world.
5.3. Distributed vs. centralized strategy

Centralized
In the case of petroleum renery, there is the clear rule of

economy of scale. Increasing aggregation of petroleum feedstocks, typically by pipeline or ocean tanker, only increases costs
marginally. With high pressure and temperature requirements,
increasing production scale follows a 0.60.8 scaling factor driving economies of scale. However, this is not automatically true
for biorenery (Dunnett, Adjiman, & Shah, 2008). The advantages
of larger plants might be offset by the increased costs of hauling
more low density biomass feedstocks to the point of processing
for longer distance (Shastri, Rodriguez, Hansen, & Ting, 2012). It
is also reported that transportation takes a much larger piece in
the cost pie of biofuel supply chains than that of petroleum supply chains. Therefore, to reveal the tradeoffs between the costs of
transportation and process construction/operations, we consider
an illustrative example in this section.
We assume a superstructure of the hydrocarbon biofuel supply chain in a hypothetical 4 4 matrix region as shown in Fig. 3a.
Each green square area represents a farm, of which the yield of
biomass is evenly distributed. There are ve candidate sites for
locating the conversion facilities, as represented by blue circles. The
only demand zone, represented by the pink circle, is at the center
of the square region. In this superstructure, two conversion pathways are considered: (1) directly converting biomass to liquid fuels
in an integrated biorenery (represented by yellow plant) and (2)
preconverting biomass into bio-oil in fast pyrolysis plants (represented by red plant) and then upgrading the bio-oil to liquid fuels
in a gasication plant (represented by blue plant). For clarity, we
also illustrate the two conversion pathways in Fig. 3b.
On the basis of the superstructure, we consider three types
of supply chain designs, namely centralized, distributed and
two-stage. In the centralized scenario, all the biomass resources
collected from the 16 farms are shipped to a large, integrated gasication plant located in the center of the square region for the
conversion to liquid fuels. In the distributed scenario, four integrated gasication plants of a smaller size are built at the center
of four corners of the square region, each processing the biomass
resources from the four adjacent farms. The liquid fuels are then
shipped to the demand zone in the center of the square region
from the four integrated bioreneries. The third scenario twostage design includes four fast pyrolysis plants located at the
center of four corners and an upgrading facility at the center of the
square region. The biomass resources collected from the four adjacent farms are preconverted to bio-oil in the pyrolysis plants. Then
the bio-oil is shipped to the central upgrading facility for further
conversion to liquid fuels.
Since our focus is on the tradeoff between the costs of
transportation and process construction/operations, the major
differences between the three designs are in facility locations, production capacities, and technology selections. All the data and a
detailed discussion are provided in the work by You and Wang
(2011). Here in this paper, we merely present the major results.
As summarized in Table 2, the centralized layout might be the
best option for the 40 km 40 km square region, because of the
economy of scale and higher efciency of integrated conversion. Although with the highest transportation cost and slightly
higher capital cost than does the centralized design, the two-stage
design can be still considered a viable approach, because of its
low operating cost resulting from the credit from charcoal, the
major byproduct in preconversion processes. If in a 60 km 60 km
square region, the two-stage design becomes the least costly
option, because the larger area implies a higher growth rate of the
11
Distributed
Two-stage
40 km
60 km
135 km
200 km
$290 MM/y
$1.94/GEG
$457 MM/y
$3.06/GEG
$298 MM/y
$2.30/GEG
$530 MM/y
$1.58/GEG
$786 MM/y
$2.34/GEG
$528 MM/y
$1.81/GEG
$2224 MM/y
$1.31/GEG
$2610 MM/y
$1.54/GEG
$1927 MM/y
$1.30/GEG
$5156 MM/y
$1.38/GEG
$5126 MM/y
$1.38/GEG
$4031 MM/y
$1.24/GEG
transportation cost, which can be signicantly reduced through

two-stage design. However, we note that the centralized design
still yields the minimum unit cost, because of the relatively low
conversion efciency of the two-step processing of the two-stage
design. When considering a 135 km 135 km square region, the
two-stage design has both the minimum total cost and minimum
unit cost. Moreover, the difference between the costs of the centralized design and distributed design becomes smaller. Interestingly,
in a 200 km 200 km square region, the distributed design becomes
more cost-effective than the centralized design. The reason is that
the higher transportation cost resulting from the larger area offsets
the capital saving of the economy of scale in the centralized design.
5.4. Competitions between different parties

In most existing literature, the entire biofuel supply chain is considered as entity centralized system. This might be true if all parties
involved in the biofuel supply chain are cooperative, which happens
in the case that the farms, production facilities, and distribution
systems are all acquired by the same organization. However, more
often, the parties are non-cooperative, thus causing competition
in the price and use of materials. In such scenarios, game theory
is a powerful tool for the study of mathematical models concerning conict and cooperation between intelligent rational parties
in the supply chain system. In game theory, the interactions and
competitions between different parties can be modeled as various
types of games depending on their behaviors, including cooperative or non-cooperative games, symmetric and asymmetric games,
zero-sum and non-zero-sum games, simultaneous and sequential
games, etc. (Dutta, 1999; Myerson, 1997).
A typical example of the non-cooperative biofuel supply chain
is the competition for biomass resources with agricultural sector
at the biomass acquisition stage (Bai, Ouyang, & Pang, 2012). For
instance, if corn is considered as the feedstock for biofuel production, the biofuel company might offer certain prices to procure
feedstocks and the farmers have the option to ship and sell their
corns to local grain markets or nearby biomass processing facilities. In this case, the biofuel company can optimize their offered
prices to maximize its prot, while the set of spatially distributed
farmers would react accordingly to maximize their individual profits. The problem can be regarded as a Stackelberg leader-follower
game (von Stackelberg, 1934) and formulated as a bi-level supply
chain optimization problem.
Another approach is to introduce proper contract mechanisms
to leverage the interests of different parties, among which the
price transfer policy is an intuitive and efcient method to create a fair, optimized prot distribution in the biofuel supply chain
(Gjerdrum, Shah, & Papageorgiou, 2001). The transfer price is the
selling price at the material supplier and the purchasing cost at the
material receiver, which is also the major variable in this optimization problem. To avoid unfair prot distribution between parties
in the biofuel supply chain, a nonlinear Nash-type (Nash, 1950)
objective function can be employed.
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Fig. 3. Illustration of centralized vs. distributed supply chain networks. (a) Comparison of three designs of the biofuel supply chain. (b) Illustration of centralized-distributed
pathways. (For interpretation of the references to color in this gure legend, the reader is referred to the web version of this article.)
5.5. International trade of biomass/biofuels

Although current focus is on the use of domestic biomass
resources for biofuel production, international trades of
biomass/biofuels may also provide winwin opportunities to
both exporting and importing countries (Kaditi & Swinnen, 2007).
Some countries, especially developing countries, have large vacant
land, lower cost of labor and equipment, from which importing
can help domestic biofuel industries to improve competitiveness
of biofuel products, to create more stable biomass supplies, and to
contribute to economic development and technology innovation in
exporting countries (Junginger et al., 2008). For instance, Uslu et al.
(2008) provided a comprehensive analysis of the biomass/biofuel
supply chain from Latin America to the European Union. Additionally, as the largest wood pellets exporter in the world, Canada
holds considerable potential for international biomass/biofuel
trades with the biofuel industry in the U.S. (NREL, 2013b).
Long-distance transportation is inevitable in international
trades of biomass/biofuels. Since raw biomass resources are usually
too low in energy transport density, there is a universal consensus
that raw biomass needs to undergo pretreatment and densication processes to improve the energy density and biomass stability.
Therefore, the remaining problem is to determine which pretreatment method, at what point in the supply chain, with which
conversion technology and what transportation mode would give
the optimal delivery performance for international biofuel supply chains. International trading options include direct import of
biofuels products produced in exporting countries, or import of
intermediate energy carriers (e.g., torrefaction pellets, pyrolysis oil)
converted in exporting countries. Furthermore, when considering

the transportation mode for biomass/biofuel shipments, pipeline
transportation, though requiring considerable upfront costs, may
emerge as a solution that is economically viable in the long run, in
addition to truck, train and barge (DOE, 2010).
Another interesting problem inherent in international trades of
biomass/biofuel supply chains is associated with the multi-national
or cross-region nancing activities. When the materials are shipped
across the country/state borders, currency exchange, custom tariffs
or different state taxes may incur (Lamers, Junginger, Hamelinck, &
Faaij, 2012). All these factors may lead to additional costs for international or inter-region trades, thus should be taken into account in
the economic evaluation of the biofuel supply chain project. Adding
to this point, carbon trading platforms would also contribute to the
economic performance and sustainability of international biofuel
supply chains. Since countries may have decits/surplus in their
respective carbon emission quota, incorporating importing scenarios into the optimization model can help to achieve efcient use of
resources while to meet the environmental restrictions. Another
alternative is to trade renewable fuel credits on the international
market and enable local optimization of supply chains. This method
could provide sufcient incentive to increase biofuel production
above local mandates.
5.6. Integration with other supply chains
5.6.1. Integration with petroleum supply chains
Conventionally, bioreneries are considered independent of
petroleum supply chains. However, with the development of
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Fig. 4. Entry points for biomass resources into existing petroleum infrastructure.
advanced hydrocarbon biofuels, great opportunities emerge for

biofuel industry to take advantage of the existing infrastructure
of petroleum supply chains (mainly renery units and pipelines),
thus saving considerable amounts of capital and operation costs. As
shown in Fig. 4, three possible insertion points for biofuel supply
chain to entry the petroleum infrastructure include (Bunting et al.,
2010; DOE/EERE, 2013d),
Insertion point (a): A bio-crude that can be co-processed with
conventional crude oil
Insertion point (b): Renery-ready intermediates that are compatible with specic renery streams for further processing at the
renery
Insertion point (c): A near-nished fuel or blend stock that will
be minimally processed at the renery.
For insertion point (a), bio-crude (e.g., pyrolysis oil) can be
mixed with petroleum crude oil, then sent to crude distillation
units, and nally converted to fuel products via a series of upgrading
units. For insertion point (b), bio-crude is directly sent to upgrading
units after certain treatment to remove oxygen and other contaminants. For insertion point (c), there are two options, namely
blending biofuels with conventional fossil-fuels in the petroleum
renery and then shipping them to the customers using existing
pipelines, or delivery of biofuels directly to distribution centers and
blending there. Note that, minimum capital costs are still required
to retrot petroleum renery units to be compatible with these
insertion points (Tong, Gleeson, Rong, & You, 2013; Tong, Gong,
Yue, & You, 2013). Depending on regional air emissions standards,
blending of a nished biofuel might require specic adjustments of
the petroleum fuel to meet requirements for Reformulated Blendstock for Oxygenate Blending (RBOB).
From the modeling perspective, there are abundant existing
tools for the design, planning and scheduling of petroleum supply
chains due to its maturity, whereas there is currently a signicant
lack of supporting tools for the decision-making in emerging biofuel supply chains. Therefore, with the resemblance and difference
between the two types of supply chains in mind, we should take
advantage of the existing tools and exploit the synergies among
the various activities in the integrated system. A superstructure
can be constructed to incorporate the biofuel supply chain into

existing petroleum supply chain systems with binary variables representing the selection of biomass/biofuel insertion points, choice
of conversion technologies, existence and capacity level of biomass
pretreatment units, as well as other retrotting decisions associated with catalysts, processing methods, process heat integration,
hydrogen demand, etc. Furthermore, as additional material streams
introduced from the biofuel supply chain are involved in the integrated production system, more efforts on planning are required for
the purchase, sales, transportation, and storage, but more importantly, on the scheduling in raw material processing and fuel
production to coordinate the additional material streams in order
to achieve maximum utilization of renery units and maximum
overall prot from both biofuel and petroleum products.
5.6.2. Integration with carbon mitigation
CO2 capture and sequestration (CCS) is a major means to reduce
greenhouse gas emissions, especially from centralized energy
conversion sites (e.g., power stations, petroleum reneries). Conventional practice for carbon sequestration is to remove CO2
from the atmosphere and deposit in a reservoir (e.g., soil, ocean)
(DOE/NETL, 2010). However, the recent development of algaebased biofuel technology creates new options for CO2 sequestration
as well as the opportunities to take advantages of the carbon content for the growth of algae biomass, thus increasing the atom
efciency and leading to CO2 capture and utilization (CCU).
There is a large body of literature investigating the potential
of using algae for carbon mitigation, but research on how to connect the carbon-sources with algae-based carbon-sinks is relatively
limited. Some researchers suggest building the algae cultivation
facilities close to the carbon-sources (Wilcox, 2012). However, this
option requires considerable amounts of capital costs and may not
be optimal with a large number of carbon-sources that are located
geographically apart. In this scenario, optimization on sitting of
algae cultivation sites and design of CO2 pipeline transport network
may come into play. When the total amount of CO2 needed to be
transported is rather small, simple source-sink matching approach
may be applicable at the early stage of CCU development. However, in scenarios with a large amount of CO2 to be transported
and a great number of carbon-sources to be matched, source-sink
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matching approach appears less efcient and superstructure-based

optimization approaches for the design of CO2 pipeline transport
network may become more appealing.
The major costs of the CO2 pipeline transport network involve
the capital costs for installing the pipelines and pump stations,
as well as the costs associated with operation and energy consumption (Zhou, Liu, & Li 2013). It is the pressure provided at the
pump stations that drives the CO2 to ow through the pipelines,
which has to be above a certain value to maintain the supercritical
or dense-phase liquid states of CO2 to ensure transportation efciency, meanwhile cannot exceed certain limits in order to avoid
risks of explosion and other safety issues. Therefore, the tradeoff
between the number of pump stations and the distance of CO2
transportation needs to be established. An insight on the design of
CO2 pipeline network, is that one needs to avoid valleys and depressions because a pipeline failure could starve a region of breathable
air. Binary variables can be introduced to represent the existence
of a pump station at a certain candidate node, the existence of a
pipeline along a certain segment, as well as the selection of the
diameters of the pipelines with discrete standard sizes. Continuous
variables can be used to represent the pressure rise, ow rate of CO2 ,
and the amount of CO2 available at carbon-sources and the capacity
at algae cultivation sites. Existing works on optimization of natural gas pipeline networks may be good references for the design
and operation of CO2 pipeline transport networks (Baumrucker &
Biegler, 2010; Gopalakrishnan & Biegler, 2013).
6. Modeling sustainability issues in bioenergy and biofuel
supply chains
As a renewable alternative to conventional fossil-fuels, the sustainability issues associated with biofuels deserve our attention.
In order to reduce adverse impacts on ecosystem and improve the
overall economic protability and social benets, systematic modeling and optimization frameworks are required to simultaneously
assess and identify the sustainable solutions for the design and
operation of biofuel supply chains (You et al., 2012). In this section,
we will introduce how modeling and optimization tools can be utilized to address the sustainability issues in biofuel supply chains,
concerning environment, society, and economy, respectively.
6.1. Environmental impacts
Accompanied by the rise in environmental awareness and
tightening of environmental policies, the study of environmental sustainability has received increasing attention in the past
decades. Among the various approaches, life cycle assessment (LCA)
methodology stands out to be the most successful tool for evaluating and analyzing the environmental impacts of product systems
(Azapagic, 1999; Azapagic & Clift, 1999; Fava, 1994). The classical
LCA framework is based on stages and processes, which is well regulated by ISO standards and specic methodology guidelines (ISO,
2006). In addition, inputoutput models and hybrid methods are
also promising tools for LCA, of which Eco-LCA as an example, is
based on an integrated ecological-economic model of the U.S. economy and accounts for various ecosystem goods and services (Bakshi
et al., 2013). We note that the uncertainties in environmental evaluation can have signicant inuences on the reliability of LCA-based
decisions. These uncertainties may stem from the limited knowledge about the physical processes under study and the normative
choices regarding scenarios and mathematical models (Huijbregts,
Heijungs, & Hellweg, 2004).
6.1.1. Four-phase life cycle assessment
Here in this paper, considering its relative maturity and wider
acceptance, we would like to briey introduce the classical
process-based LCA methodology, following the four-phase procedure suggested by ISO.
6.1.1.1. Goal and scope denition. In this phase, project description,

goal of study, boundary of system and denition of functional unit
are stated. Depending on the goal of study, the system boundary
can be cradle-to-grave, cradle-to-gate or gate-to-gate. In the
study of biofuel supply chains, the cradle-to-gate boundary is
often adopted, including the life cycle stages from biomass cultivation, harvesting, pretreatment, through transportation, storage
and conversion, to the gate of nished-product distribution centers.
Moreover, the denition of functional unit is also critical, based on
which, all the calculations will be performed and normalized. For
instance, for a biofuel supply chain that produces biomass-derived
gasoline, diesel and jet fuel, the gasoline gallon equivalent (GGE)
a unit based on energy content can be selected as the functional
unit (Wikipedia, 2013b).
6.1.1.2. Inventory analysis. This second stage of LCA involves the

compilation and quantication of life cycle inventory (LCI) associated with each process/stage within the life cycle boundary. LCI is
simply a list of material inputs and outputs for a given product system throughout its life cycle, including the cumulative extraction
of resources from the environment (e.g., primary energy, mineral
resources) as well as the cumulative emissions to the environment
(e.g., gas emissions, liquid and solid wastes). LCI for a lot of processes can be found in commercial LCA databases such as Ecoinvent
(2008), GaBi (2011), GREET (2012), and openLCA (2012). However,
for new processes that are not documented, cumulative LCI should
be calculated according to energy and mass balance, using the unit
process raw data and LCI of background processes. Sometimes, onsite measurements may be necessary.
6.1.1.3. Impact assessment. In this phase, the LCI obtained from the
previous phase is translated according to certain damage assessment models. These models can generate a unied or a series of
environmental performance indicators, which are easily understandable and user-friendly numbers. The most widely-used LCA
metrics include GWP (IPCC, 2007), Eco-indicator 99 (Goedkoop
& Spriensma, 2001), IMPACT 2002+ (Humbert, Schryver, Bengoa,
Margni, & Jolliet, 2012), etc. GWP focuses on greenhouse gas (GHG)
emissions causing the global warming effects, while Eco-indicator
99 and IMPACT 2002+ evaluate the environmental impacts in more
comprehensive categories (e.g., human health, ecosystem quality
and resources). We note one critical problem that has been recently
highlighted is about the water footprint of biofuel production systems (Chiu, Suh, Pster, Hellweg, & Koehler, 2012; Gerbens-Leenes
& Hoekstra, 2011), which should also be explicitly dealt with in biofuel supply chain design (Bernardi, Giarola, & Bezzo, 2012; Bernardi,
cek, Klemes, & Kravanja, 2012a,b).
Giarola, & Bezzo, 2013; Cu
6.1.1.4. Interpretation. In the nal phase, the LCA results are analyzed to provide a set of conclusions and recommendations, usually
in the form of written reports. In this regard, when we consider
the biofuel supply chain, the goal of LCA is to provide criteria
and quantitative measurements for comparing different network
layouts and operation alternatives. However, one of the critical
drawbacks of classical LCA framework is that it lacks a systematic approach for generating such alternatives and identifying the
best one in terms of environmental performance (Grossmann &
Guilln-Goslbez, 2010). Therefore, most researchers merely use
LCA as a post-optimization tool for the evaluation of environmental
sustainability.
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Fig. 5. Life cycle optimization modeling framework.
6.1.2. Life cycle optimization

To circumvent the aforementioned limitation, the life cycle optimization framework was proposed in recent years (Gebreslassie,
Slivinsky, Wang, & You, 2013a; Gebreslassie, Waymire, & You,
2013b; Wang, Gebreslassie, & You, 2013; Yue & You, 2013b).
This general modeling framework couples optimization tools with
classical LCA methodology, allowing us not only to evaluate the
environmental impacts of diverse design and operation alternatives but also to identify the optimal solution (Fig. 5). When other
criteria (e.g., economic and social) are considered at the same time,
the life cycle optimization framework is also able to perform multiobjective optimization. In this case, the results are often presented
as a set of Pareto-optimal solutions, consisting of a Pareto frontier
which reveals the tradeoffs in decision under multiple objectives.
One can choose among these Pareto-optimal solutions based on the
preference for the design and operation of potential biofuel supply
chains.
6.1.3. Functional-unit-based evaluation
For most economic objectives, we often try to optimize the total
quantity, i.e., maximizing total prot or minimizing total cost. However, for environmental criteria, the environmental impact per
functional unit is more critical (Yue, Kim, & You, 2013b). This is
because, for example, one may care more about the carbon footprint
of producing one gallon of biomass-derived gasoline, rather than
the annual total CO2 emission of the entire biofuel supply chain.
Therefore, the environmental impact evaluated based on functional
unit is, in fact, the indicator of how green the supply chain is. However, one arising issue is that functional-unit-based environmental
objective function can involve fractional terms, thus introducing
nonlinearity into the model. Advanced solution methods including parametric algorithm (You, Castro, & Grossmann, 2009; Zhong
& You, 2014), reformulationlinearization method (Yue, GuillnGoslbez, & You, 2013a), as well as several general-purpose MINLP
solvers and global optimizers can be utilized to resolve the issue
(Floudas, 1999; Grossmann, 2002).
6.2. Social factor
6.2.1. Job creation
The most important perspective in the social dimension for the
design and operation of biofuel supply chains may be the employment effect, which can be measured by the number of accrued
local jobs (full-time equivalent for a year) in a regional economy (Bamueh, Ponce-Ortega, & El-Halwagi, 2013; Lira-Barragn,
Ponce-Ortega, Serna-Gonzlez, & El-Halwagi, 2013; You et al.,
2012). The Jobs and Economic Development Impact (JEDI) model
developed at National Renewable Energy Laboratory (NREL) can be
used and integrated into the aforementioned multi-objective optimization framework, to systematically evaluate the social impacts
associated with the construction and operations of biofuel supply
chains in the United States (NREL, 2012). To evaluate the number

of jobs that will accrue to the state or local region from a project,
JEDI performs an inputoutput multiplier analysis, where a multiplier is a simple ratio of total systemic change over the initial
change (e.g., employment) resulting from a given economic activity
(e.g., startup or termination of a project). The multipliers are estimated through economic inputoutput (EIO) models, which were
originally developed to trace supply linkages in the economy, and
to quantify the effects of change of expenditure within a regional
economy in multiple industry sectors. In the input-out analysis,
the employment effects from the construction and operation of a
biofuel supply chain can be classied into three categories: direct,
indirect and induced.
Direct effect: The immediate or on-site effect created by expenditure. For example, in constructing a bio-renery plant, direct
effects may include the on-site contractors and hired crews in
the civil engineering team. In addition, direct effects may include
the jobs for building the process equipment units at bio-renery
plants.
Indirect effect: The increase in economic activity that occurs
when contractors, vendors, or manufacturers receive payment
for goods or services and in turn are able to pay others who support their business. For instance, indirect effects may include the
banker who nances the contractor, the accountant who keeps
the contractors books, and the steel mills, electrical manufacturers and other suppliers that provide the necessary materials.
Induced effect: This refers to the change in wealth that occurs or
is induced by the expenditure of those persons who are directly
or indirectly employed by the project.
The total employment effect from a single expenditure can
be calculated by summing up the three kinds of effect, using
regional-specic multipliers and personal expenditure patterns.
State-by-state multipliers for employment, economic activity, and
personal expenditure patterns can be derived from the IMPLAN
Professional model (IMPLAN, 2013). In this way, the changes
in employment brought about by investment in the design and
operation of a biofuel supply chain can be matched with the
corresponding multipliers for each industry sector. Both the onetime impacts resulting from the construction phase and the
yearly impacts resulting from the annual operations along the
project lifetime should be considered in the measure of social
impacts.
6.2.2. Other perspectives
Besides job creation, the social dimension still involves many
other perspectives such as human rights, labor practices, decent
work conditions, society wellness, product responsibility, etc.
Despite of the existence of several conceptual frameworks, the
quantitative evaluation methodology for such social perspectives
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is still immature (UNEP, 2009). One of the promising approaches

under research right now is to broaden the scope of LCA framework
to include social inventory results. However, by the time of writing
this review, the choice and formulation of indicators as well as the
position towards the use of generic data are still under debate in
the social LCA community (Benot et al., 2010; Dreyer, Hauschild, &
Schierbeck, 2006; Jrgensen, Bocq, Nazarkina, & Hauschild, 2008;
Weidema, 2006). Although no appropriate software tools for social
LCA are currently available, there are several pilot developments
including openLCA (openLCA, 2012), Earthster (GreenDelta, 2013),
etc.
6.3. Economic factor
The idea of economic sustainability is to promote the use of
available resources in a way that is both efcient and responsible,
and likely to provide long-term benets. In addition, an alternative
feedstock can reduce risk from disruption of a highly-concentrated
correlated market. In the case of design and operation of a biofuel
supply chain, it calls for using resources (e.g., capital, land, labor,
research) wisely so that the business continues to healthily function
over a number of years, while consistently returning a risk-adjusted
return.
Several metrics can be used as the economic objectives in the
optimization model for biofuel supply chains. The most common
ones are net present value (Wikipedia, 2013c) and annualized total
cost (Wikipedia, 2013a). Both metrics account for the time value
of money over the lifetime of the project (usually 1520 years for
biofuel supply chains) by using discounted cash ow analysis. In
addition, it is believed that minimizing the cost associated with per
unit of biofuel products would lead to a more cost-effective supply
chain, thus promoting the competitiveness and market acceptance
of the biofuel products. Besides, as a renewable alternative, the
efciency of energy and resource use in biofuel supply chains is
also an important indicator. We can minimize the cumulative fossil energy demand or the consumption of certain type of critical
resources (e.g., labor, materials) associated with per unit of biofuel
products, in order to achieve the maximum utilization of available
resources (Althaus et al., 2010). Responsiveness is another important indicator affecting the economic performance of the biofuel
supply chain, because to what extent the order of customers can
be fullled on time is a touchstone for determining the quality of
the design and operation of a supply chain. By using the stochastic
inventory theory, we can employ the guaranteed service time from
the gate of distribution centers to biofuel retailers or individual customers as one of the optimization objectives (You & Grossmann,
2008a, 2011a). Again, since multiple objectives may be involved,
multi-objective optimization techniques can be utilized to simultaneously optimize the objectives of interest.
7. Uncertainty analysis and risk management for biofuel
supply chains
Uncertainties are ubiquitous, of various types and varying
degrees, and emerging from all stages and activities in the biofuel supply chain (Awudu & Zhang, 2012). Corresponding to the
multi-scale decisions, we can also broadly categorize the uncertainties into strategic and operational levels, which are usually
handled with by optimization models of different scales and formulations (Lee, 2012). The most widely employed approaches include
scenario analysis, stochastic programming, robust optimization,
fuzzing programming, chance-constraint optimization, stochastic
inventory theory, etc (Sahinidis, 2004). A summary is provided
in Fig. 6, including a selected number of uncertainty sources and
promising approaches for optimization under uncertainty.
Fig. 6. Multi-scale uncertainties with selected optimization approaches.
7.1. Strategic uncertainty

The most signicant type of strategic uncertainty for biofuel
supply chains might associate with the government incentives and
policies (MASBI, 2013). Due to the relatively high production cost of
biofuel products and their limited market acceptance at the current
stage of development, the incentives and supporting policies serve
as a main driver of the biofuel industry, making the biofuel products
competitive with their petroleum counterpart both in terms of economic cost and sustainable performance. However, the incentives
and policies may be changed after the biofuel supply chain is built,
due to the changes in economic, political or technical environments,
thus causing deviation between the realized prot return and the
original anticipation. Furthermore, political uncertainty increases
perceived market risk, increasing nancing costs to account for
risk-adjusted returns. Scenario analysis would be straightforward
to address the uncertainty in incentives and policies by investigating the performances in optimistic, neutral and pessimistic
scenarios. Alternatively, stochastic programming can be employed
to maximize the prot expectation among a large number of
possible scenarios. Facility disruption under catastrophic events
(e.g., earthquake, hurricane, plant explosion, or terrorist action) is
another type of strategic uncertainty that might cause the paralysis or malfunctioning of the biofuel supply chain system. Metrics
regarding the resilience under destructive disruptions can be incorporated into the optimization model as one of the objectives at the
supply chain design phase to enhance the robustness of the supply
chain design, though usually with additional costs. Alternatively, in
cases that probabilities of disruption can be estimated from historical data or operating experiences, stochastic programming would
be a great tool to handle facility disruption. Besides, technology
evolution is an important type of strategic uncertainty. Considering that many biofuel technologies are relatively young, the process
conversion rate, energy efciency, and material handling costs
are expected to improve in the future. Therefore, one may need
to determine whether to employ mature technologies with less
improving space or nascent technologies with considerable potential, which makes stochastic programming (Birge and Louveaux,
1997) a proper tool for solving this issue. The last type of strategic
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uncertainty we would like to mention corresponds to the climate and weathers. Different from petroleum resources, the annual
biomass yield is largely dependent on the sunlight, precipitation,
climate, as well as pest threats. For biomass, there are potential
catastrophic risks at both the seasonal and multi-seasonal scales.
Robust optimization might be the appropriate tool for the design
and operation of biofuel supply chains to guarantee the quantity
and quality of biomass supplies.
7.2. Operational uncertainty
Compared to the strategic uncertainties, the operational uncertainties are encountered thus need to be taken care of on a more
frequent basis. The most recognized type of operational uncertainty is the volatility in prices and costs, namely purchasing prices
of biomass resources at farms, bills for utilities (e.g., natural gas,
electricity, stream, etc.) and costs associated with various activities (e.g., labor, transport fuel, etc.). Note that pricing uncertainties
are different between biomass and petroleum. Petroleum feedstock and product prices are correlated. However, biomass products
(biofuels) are coordinated to petroleum fuels, while biomass feedstock costs are more correlated to climate and weather. In addition,
because of the variability in biomass feedstocks and the lack of
experienced workers, the uncertainty in process yields associated
with disturbances in operating conditions, errors in operation, etc.
can lead to unqualied biofuel products and delay in order delivery. We suggest probability theory and statistical tools can help to
explore the uncertainty dynamics. Whereas, robust optimization
may provide assistance to ensure satisfactory performances of biofuel supply chains under volatile market environment and unstable
process outcomes. Another two types of operational uncertainty
supply delays and demand uctuation are common topics in the
operations research community. Supply delays, also known as lead
time variability, often occur during batch production and material transportation, while demand uctuation is closely related to
the local consumption behavior and regional economy structure.
There is no doubt that accurate forecasting models are critical
to make biofuel companies well-informed of the future market.
Metrics such as conditional value-at-risk (Rockafellar & Uryasev,
2002) and downside risk (Eppen, Martin, & Schrage, 1989), coupled
with the corresponding models and algorithms (You, Wassick, &
Grossmann, 2009), can also be employed to control and manage the
risks at the optimal design and operation of biofuel supply chains. In
addition, optimization models based on stochastic inventory theory
(Graves & Willems, 2000, 2005; You & Grossmann, 2008b) might
be the most promising approach, because they can explicitly optimize the working and safety inventory to hedge against the supply
delay and demand uctuation, whilst guarantee the required service level (You & Grossmann, 2011b; Yue & You, 2013a; You, Pinto,
Grossmann, & Megan, 2011).
8. Supply chains of non-fuel end-uses for biomass
derivatives
Besides the production of biofuels for the transportation sector,
biomass sources also provide a sustainable alternative for producing electric power and heat. Furthermore, valuable co-products and
byproducts can be obtained accompany with the production of biofuels, which leads to additional prot for the biorenery industry.
8.1. Biopower and biomass-to-heat supply chain
Among the renewable power generation options, biopower
offers the advantage of being dispatchable, that is, the biomass can
be stored for the use of power plant operation to serve the load.
This avoids many of the grid integration challenges associated with
17
intermittent sources like wind and solar energy (EPRI, 2010). In

addition, there has been a long history of the use of biomass for
heat supply. In modern practices, electric power and heat are often
generated simultaneously, namely cogeneration or combined heat
and power (CHP) (Shipley, Hampson, Hedman, Garland, & Bautista,
2008).
Compared to the biofuel supply chain system, the upstream
of the biomass-to-power-and-heat supply chain is almost the
same, including biomass harvesting, logistics, and pretreatment
into pellet, chip, or pyrolysis oil. Therefore, the aforementioned
optimization tools for the upstream of the biofuel supply chain also
apply in this case. Furthermore, the downstream of the biomass-topower-and-heat supply chain is identical to the current distribution
system for power and heat. Biopower can be easily integrated with
the grid and serve the loads in remote areas, while heat can be carried by hydrosystems to serve nearby facilities. Hence, the major
modeling challenge is at the production phase.
According to the technology characterizations developed
by NREL and EPRI (Electric Power Research Institute), there
are three primary conversion routes for CHP applications of
biomassdirect combustion, gasication, and coring. Moreover,
there are numerous types of boiler technologies, e.g., spreader
stocker, uidized-bed boiler, cyclone boiler, etc., which vary in cost,
efciency, technology maturity, as well as sustainability performances (Bain, Amos, Downing, & Perlack, 2003; Wiltsee, 2000).
Binary variables can be used to facilitate the optimal selection
of these routes and technologies in the supply chain system, in
terms of economic, environmental, and/or social metrics. In scenarios where biomass is co-red with coal, scheduling tools can
help to coordinate the two material streams. Additionally, in scenarios where existing fossil-based power plants are to be retrotted
and renovated for CHP from biomass, multi-period planning tools
would contribute to the optimization of project evaluation, construction planning, resource allocation, etc. Superstructure-based
optimization always plays an important role in the process design,
no matter for bioreneries or biomass-based CHP facilities.
8.2. Biomass-to-chemicals supply chain
The petrochemical industry makes a wide range of products
from fossil fuels. These products include plastics, bers, solvents,
and other products that are ubiquitous in our daily life. Actually,
the same or similar products can, for the most part, be potentially
made from biomass as well (NREL, 2013a; PNNL, 2013). The U.S.
Department of Energy have identied a list of Top 10 building
block or platform chemicals in 2004 from more than 300 candidates
(Werpy & Petersen, 2004), which is recently revisited by Bozell
and Petersen (2010). At the time when the report was produced,
most platform chemicals are sugar-based. However, with the development of advanced biofuel technologies, it becomes appealing
to produce high-value-added low-volume bioproducts accompany
with the high-volume but low-value hydrocarbon biofuels. Different from petroleum feedstock, biomass has much higher oxygen
content than hydrocarbons fuels. Therefore, its conversion to fuels
requires release of the oxygen content either as CO2 or other oxygenated species, which might lead to distinct synergeis to produce
highly-oxygenated biobased chemicals along with drop-in biofuels.
From fossil sources, these compounds would have been produced
by oxydizing reduced hydrocarbons (Petersen, Bozell, & White,
2013).
To enhance the overall protability and productivity and
stimulate expansion of the biorening industry, multi-scale modeling and optimization can play an important role in integrating
the production of biofuel and advanced bioproducts. Systematic
approaches can be employed to make the assessment, screening
and identication of promising platform chemicals and reaction
G Model
18
ARTICLE IN PRESS
pathways more efcient. Furthermore, process synthesis and integration and multi-physics process simulation can help to lower the
overall energy intensity of unit operations in bioreneries, maximize the use of all feedstock components, byproducts and waste
streams, and use economies of scale, common processing operations, materials, and equipment to drive down all production costs.
Since the additional material streams related to advanced bioproducts may be similar to those in the petroleumchemical supply
chains, we can also leverage the tools on planning and scheduling to coordinate the use of resources in production and optimize
the logistic activities in the downstream distribution system. Moreover, the upstream of the biomass-to-chemicals supply chain is the
same as the biofuel supply chain, thus the aforementioned modeling and optimization methods for biomass harvesting and logistics
also apply in this case.
9. Conclusion
Although ethanol and bio-diesel are the most worldwide
recognized biomass-derived liquid transportation fuel products
currently, it is foreseeable that in the near future advanced hydrocarbon biofuels would experience a rapid growth due to the
political expectation, economic promise, environmental requirement, and social benets. As reviewed in this paper, cellulosic and
algae-based hydrocarbon biofuels have numerous advantages over
ethanol and bio-diesel in compatibility with existing distribution
infrastructure, implication on food price and land competition, and
potential for substituting various high-value petrochemicals. The
multi-scale modeling and optimization framework can preserve
a holistic view and facilitate informed systematical researches in
elds of molecular engineering, unit operation, process design,
supply chain management, and sustainability assessment. Opportunities and challenges emerge from multiple spatial and temporal
scales in the biofuel supply chain systems are discussed. Perspectives on centralized-distributed network design, multi-player
interaction, and integration with other supply chain systems are
revealed in this paper. Additionally, we classify decisions into
strategic and operational levels according to their inuences on
the temporal scale. We also investigate issues associated with
biofuel supply chains in the threefold sustainabilityeconomy,
environment, and society, as well as the uncertainty and risks. Nonfood end-uses of biomass derivatives are also introduced in this
paper, identifying the opportunities for power and heat supply and
advanced bioproducts.
Acknowledgement
The authors gratefully acknowledge nancial support from the
Initiative for Sustainability and Energy at Northwestern University
(ISEN) and Argonne National Laboratory via a NorthwesternArgonne Early Career Investigator Award for Energy Research. The
submitted manuscript has been created by UChicago Argonne, LLC,
Operator of Argonne National Laboratory (Argonne). Argonne, a
U.S. Department of Energy Ofce of Science laboratory, is operated
under Contract No. DE-AC02-06CH11357. The U.S. Government
retains for itself, and others acting on its behalf, a paid-up nonexclusive, irrevocable worldwide license in said article to reproduce,
prepare derivative works, distribute copies to the public, and
perform publicly and display publicly, by or on behalf of the Government.
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CACE-4846; No. of Pages 21

Contents lists available at ScienceDirect

Computers and Chemical Engineering

Biomass-to-bioenergy and biofuel supply chain optimization:

Northwestern University, Evanston, IL 60208, USA

on producing drop-in liquid hydrocarbon fuels from terrestrial

increasing debate on its adverse impact on global food prices, the

Furthermore, the polarity resulting from the high oxygen content

in order to convert the carbohydrate portion of the biomass into

pumping work. Its polarity due to high oxygen content causes

storage (Rentizelas, Tolis, & Tatsiopoulos, 2009b). To reduce the

quantity and composition of the sugars stream released depend on

3.2.3. Algae harvesting and conversion

stations by tanker trucks. This process is reasonably economical in

Cellulosic biomass to ethanol,

Supply chain design

Dunnett et al. (2008), Eksioglu,

Leduc, Natarajan, Dotzauer,

Planning and operation

Sharma, Sarker, and Romagnoli

Cucek et al. (2010), Parker et al.

Zamboni et al. (2009a),

Mele et al. (2009), Zamboni

Dal-Mas et al. (2011)

Bai et al. (2012)

Giarola et al. (2011),

Parker et al. (2010), Tittmann

Elia et al. (2011), You and Wang

Biomass to power, heat, food, etc.

Frombo, Mindardi, Robba, Rosso,

D. Yue et al. / Computers and Chemical Engineering xxx (2014) xxxxxx

Food crops to ethanol,

cek et al. (2012a,b)

Leduc et al. (2009), Kim et al.

Mobini, Sowlati, and Sokhansanj

CACE-4846; No. of Pages 21

5. Multi-scale modeling and optimization

Fig. 2. Illustration of multi-scale modeling and optimization of biofuel supply chains.

their studies on biomass-to-biofuel conversion technologies, both

As illustrated by the arrows on the left of Fig. 2, the system

blocks for the modeling and optimization of the lower

5.2. Uniqueness in biofuel supply chains

balance on biomass inventory accounting for the material loss at

5.3. Distributed vs. centralized strategy

In the case of petroleum renery, there is the clear rule of

transportation cost, which can be signicantly reduced through

5.4. Competitions between different parties

5.5. International trade of biomass/biofuels

converted in exporting countries. Furthermore, when considering

advanced hydrocarbon biofuels, great opportunities emerge for

can be constructed to incorporate the biofuel supply chain into

matching approach appears less efcient and superstructure-based

process-based LCA methodology, following the four-phase procedure suggested by ISO.

6.1.1.1. Goal and scope denition. In this phase, project description,

6.1.1.2. Inventory analysis. This second stage of LCA involves the

Fig. 5. Life cycle optimization modeling framework.

6.1.2. Life cycle optimization

chains in the United States (NREL, 2012). To evaluate the number

is still immature (UNEP, 2009). One of the promising approaches

Fig. 6. Multi-scale uncertainties with selected optimization approaches.

7.1. Strategic uncertainty

intermittent sources like wind and solar energy (EPRI, 2010). In

NABC. (2013). National advanced biofuels consortium process strategies. National