Title: Current and future ethanol production technologies: costs of production and Rates of Return on invested capital

Authors: Douglas G. Tiffany, Steven J. Taff

Addresses: Department of Applied Economics, University of Minnesota, 1994 Buford Ave., St. Paul, MN 55108, USA. ' Department of Applied Economics, University of Minnesota, 1994 Buford Ave., St. Paul, MN 55108, USA

Abstract: Considering the production goals for cellulosic and advanced biofuels in the Energy Independence and Security Act of 2007 (EISA), this study compares production costs and returns on invested capital for two current and three proposed ethanol technologies. Two methods use corn grain as the feedstock, and three use cellulosic feedstocks of corn stover, switchgrass and wood chips. Baseline levels are established so sensitivity analyses of rates of return on invested capital can be performed as market and performance variables vary. Monte Carlo techniques are used to determine distributions of rates of return for each technology capable of producing ethanol.

Keywords: ethanol production; production costs; production technology; ROI; return on investment; rates of return; subsidy; Monte Carlo analysis; biofuels.

DOI: 10.1504/IJBT.2009.028101

International Journal of Biotechnology, 2009 Vol.11 No.1/2, pp.75 - 91

Published online: 05 Sep 2009 *

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