Biodiesel Economic Evaluation and Biomass Planting Allocation Optimization in Global Supply Chain

During the past decade, the demand for biofuel has rapidly increased because of fossil fuel scarcity and pollution, which has resulted in the accelerating commercialization of the global biofuel markets with a potential 500 exajoules per year by 2050. This paper evaluates the economic benefits of five biomass types and proposes a stochastic programming model for the optimal design of the global biodiesel supply chain under the demand and price uncertainty. The biomass is produced in Southeast Asia and oil is extracted. Then, the vegetable oil is shipped to Europe and North America for biodiesel conversion and fulfilling the local demand. The results show that palm tree is a cost-effective clean energy with high benefits and low-carbon emissions. Based on the economic evaluation of biomass, the optimal capital investment, allocation of cultivated area, and transportation paths are identified to maximize the expected global profit in this supply chain in 2008-2012 by the proposed supply chain optimization model.