Publication Detail

Comparison of “Advanced” Biofuel Cost Estimates: Trends During Rollout of Low Carbon Fuel Policies


Journal Article

Suggested Citation:
Witcover, Julie and Robert B. Williams (2020) Comparison of “Advanced” Biofuel Cost Estimates: Trends During Rollout of Low Carbon Fuel Policies. Transportation Research Part D 79 (102211)

Costs of producing “advanced” biofuels (those with the lowest GHG and land use impacts) have not decreased in recent years as envisioned by analysts. Despite aggressive policy incentives, no transition to a lower cost mature industry has occurred. Information about the cost dynamics and slow industry emergence is of major interest to policymakers and others seeking to understand the likely success – and cost – of incentive programs. This paper reviews literature on production cost at the plantgate – without considering taxes or delivery costs – for selected biofuel technology pathways using a levelized cost of fuel approach, applying common financing assumptions for capital amortization and converting all values to year 2016 dollars, and examines results in the current low carbon fuel policy context. The average production cost estimate for cellulosic ethanol was $4 per gallon-gasoline equivalent (gge). For drop-in fuels, the pyrolysis-biocrude-hydro treatment pathway had the lowest average production cost estimate at about $3.25/gge. Biomass to liquid (BTL) production cost estimates averaged $3.80/gge, while hydrotreated esters and fatty acids (HEFA) – the sole fuel studied gaining commercial traction – averaged about $3.70/gge. Estimate ranges did not allow any definitive rank ordering of the fuels by production cost. Production cost estimates are higher in later than in earlier publications for non-HEFA fuels due primarily to higher costs for feedstock and capital expenditure components. This may reflect learning from early but largely unsuccessful commercialization efforts that yielded more realistic (and higher cost) information and detail on feedstock provision and conversion processes.

Key words: Advanced biofuels, Technoeconomic analysis, Cost trends, Low-carbon fuels, Transportation climate policy