What\u2019s it worth? It\u2019s the cry of a thousand fortune-hunters combing garage sales and close-out auctions this spring. Whether you are owner or seller, you need to know the underlying value of a feedstock in the advanced bioeconomy \u2014 and that is not the same thing as its current market price.<\/p>\n
In fact, what makes a feedstock useful in the advanced bioeconomy is the spread between price and value \u2014 if the cost of valorization (the money you spend to capture that value) is less than that spread, you\u2019ve got a winner, and you can play in the biggest commodity market of all, the fuels market. Otherwise, you\u2019ll be looking at niche markets.<\/p>\n
Sure, it\u2019s easy to point to today\u2019s Brent crude oil benchmark price of $50 and say, that\u2019s what my feedstock is worth, at least in the fuel markets \u2014 but there\u2019s a little more to it than that. Here are the steps to determining value.<\/p>\n
The fuel value<\/p>\n
Step 1: the organic fraction<\/p>\n
A convenient starting point is a ton of feedstock, or 2000 US pounds.<\/p>\n
Every bioeconomy has an organic fraction, and you start there \u2014 eliminating the weight of any trace metals, water, plastics, dirt and so on. The amount you eliminate could be trivail (e.g. bone dry crop) or major (unsorted, sloppy-wet muncipal solid wasteI. So, you\u2019ll end of up with anywhere between say 800 and around 1990 pounds of usable material. (Note to readers: in this step, we include any plastic material in your feedstock, such as MSW \u2014 it may not be something you can biologically do anything with, and it may not be renewable, but plastic is organic material and it does have a fuel value.)<\/p>\n
Step 2: the Cs, Os and Hs<\/p>\n
Now, you divide that organic material into its three components \u2014 oxygen, carbon and hydrogen, by weight. to use a simple example, a table sugar is C6H12O6 and is 53.3 percent oxygen, 40 percent carbon, and 6.7 percent hydrogen. (Note to readers: For the purpose or calculating ratios and percentages, use a value of 12 for carbon, 1 for hydrogen and 16 for oxygen)<\/p>\n
Ok, here is where it gets a little tricky.<\/p>\n
Step 3: Adjusting for the carbon: hydrogen ratio<\/p>\n
You can keep all your Cs and Hs so long as the ratio of carbon to hydrogen is between 4:1 and 6:1. If you have too much carbon, you have to shed that value. You probably won\u2019t have too much hydrogen, but if you do, shed that until you either get up to that 4:1 ratio or down to 6:1.<\/p>\n
Step 4: Adjusting for maximum oxygen<\/p>\n
You can keep all your Os, so long as the ratio of oxygen to the remaining Cs and Hs is 40 percent or less. Anything higher, and you have to shed that value.<\/p>\n
Step 5: Convert those feedstock pounds into theoretical fuel value<\/p>\n
Now, to convert your remaining feedstock pounds into fuel value, multiply the remaining hydrocarbon pounds by 0.15, and the oxygen pounds by 0.32. (Note to readers: We\u2019ll get into the explanation of why those numbers, and not others, later on \u2014 they\u2019re going to seem non-sensical to some of you For now, let\u2019s just do the math).<\/p>\n
An example: the fuel value of table sugar<\/p>\n
Let\u2019s use a real-world example to illustrate. We\u2019ll start with a ton of table sugar. That\u2019s all refined organics, so we don\u2019t have to eliminate any non-organic material. We noted the 53.3\/40\/6.7 ratio of oxygen, carbon and hydrogen, above. So, we have 1066 pounds of oxygen, 800 pounds of carbon and 134 pounds of hydrogen.<\/p>\n
Looking at steps 3 and 4, our carbon to hydrogen ratio is fine, but we have to shed 444 pounds of oxygen to get the oxygen ratio down to its maximum value of 40% Now to step 5. So, we have 1556 pounds remaining in out original ton of table sugar feedstock, and we can convert that into $339 \u2014 and that\u2019s the value of our feedstock.<\/p>\n
Right away we see the problems<\/p>\n
You might have paid something like $6.48 for a 10 lb bag of C&H table sugar recently, which if you multiply it out cost you $1296 for that ton, and that\u2019s one good reason no one will ever convert retail table sugar to a fuel. Wholesale sugar can make sense in selected markets, but never retail.<\/p>\n
That\u2019s NLACM in action \u2014 the Natural Law of Alternative Commodity Markets, which states that you will never convert a feedstock if the converted molecule\u2019s value is less than the feedstock\u2019s original value. That\u2019s one of the reasons that ethanol producers don\u2019t generally make jet fuel \u2014 even though you can make excellent jet fuel from ethanol \u2013 they make more producing two molecules of ethanol than one molecule of jet fuel, from the same amount of feedstock.<\/p>\n","protected":false},"excerpt":{"rendered":"
What\u2019s it worth? It\u2019s the cry of a thousand fortune-hunters combing garage sales and close-out auctions this spring. Whether you are owner or seller, you need to know the underlying value of a feedstock in the advanced bioeconomy \u2014 and that is not the same thing as its current market price. In fact, what makes […]<\/p>\n","protected":false},"author":59,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","nova_meta_subtitle":"","footnotes":""},"categories":[5572],"tags":[5838],"supplier":[],"class_list":["post-43508","post","type-post","status-publish","format-standard","hentry","category-bio-based","tag-bioeconomy"],"_links":{"self":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/43508","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/comments?post=43508"}],"version-history":[{"count":0,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/posts\/43508\/revisions"}],"wp:attachment":[{"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/media?parent=43508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/categories?post=43508"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/tags?post=43508"},{"taxonomy":"supplier","embeddable":true,"href":"https:\/\/renewable-carbon.eu\/news\/wp-json\/wp\/v2\/supplier?post=43508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}