Lignin chemical derivatives in Brazilian sugarcane sector: An alternative to make 2G ethanol viable?

Pursuing strategies that diversify the productive matrix of bio-based industries is essential for the growth of value chains in the bioeconomy and thus achieving the goals of a sustainable economy. Among these potential industries, the sugarcane industry is an essential player and one of the largest industries in reinserting residues in the production chain. Among these successful cases in sugarcane industries, the use of bagasse for electricity generation and, recently, the generation of biogas from vinasse stands out. However, an intriguing case in this sector is that of second-generation (2G) ethanol, which, despite having already overcome its technical barriers, is still not economically viable. Experts estimate that in 2030, 2G ethanol technology will cost less than a first-generation ethanol production plant. One of the paths to this transition is the co-production of chemicals derived from lignin. This work investigates whether any of the following chemicals, benzene, toluene, and xylene (BTX), vanillin, polyacrylonitrile (PAN) and Phenol, are capable of making second-generation ethanol economically viable, using not only profit as a metric but also the risk associated with investing in a new plant. This analysis is done through the portfolio theory and the construction of an optimization model that mimics the production process of an actual sugarcane mill. Unlike previous studies, C-VaR is used as a risk metric, a coherent risk measure. It was possible to conclude that 2G-ethanol becomes economically viable when its production is associated with vanillin or PAN through the proposed model. In addition to showing that lignin is capable of enabling the production of 2G ethanol, through the production of PAN, the methodology presented in this work can be expanded to test other potential products with high added value and thus contribute to the growth of the value of chains green in the bioeconomy. •A simple methodology capable of showing whether high value-added products can make new green products viable.•PAN (polyacrylonitrile) has the potential to make 2G ethanol economically viable.•The financial risk to invest in PAN is high, and probably the reason we do not see this product in Brazilian mills.•BTX nor Vanillin will be financially viable in the short/medium term.•Phenol may become a viable alternative like PAN, if its price increases, as a result of climate change.