Algae-Based Two-Stage Supply Chain with Co-Products

Palatnik, R. ORCID:, Freer, M., Levin, M., Golberg, A., & Zilberman, D. (2023). Algae-Based Two-Stage Supply Chain with Co-Products. Ecological Economics 207 e107781. 10.1016/j.ecolecon.2023.107781.

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The last years have seen the emergence of the bioeconomy. Assessment of these new technologies is a significant challenge. We develop a unique dynamic programming framework to assess the value of the investment in a multi-stage supply chain with the production of bio-feedstock and its processing into multiple outputs. The system allows for adaptive learning in all supply chain stages, which creates a positive learning effect of co-outputs. We apply the framework to macroalgae (seaweed) farming and biorefinery processing into proteins and sugars for the Philippines and Ireland as representatives of developing and developed economies with emerging supply chains. We run Monte Carlo simulations to analyze the uncertainty of learning and prices. The key results indicate that the macroalgae sector that builds on traditional technologies is quite viable. Developing a new algae industry that generates proteins and other high-value products requires significant investment and depends on the dynamics of learning and prices. Even though the production of high-value chemicals is not yet viable, it gains profitability potential from learning of feedstock farming that is currently produced for the lower value application. The learning is much more valuable in feedstock production and processing into proteins than low-value chemicals currently produced (carrageenan).

Item Type: Article
Uncontrolled Keywords: Biorefinery; Learning; Monte-Carlo simulations; Multiple co-outputs; Non-linear dynamic optimal control; Seaweed; Two-stage production
Research Programs: Energy, Climate, and Environment (ECE)
Energy, Climate, and Environment (ECE) > Integrated Assessment and Climate Change (IACC)
Depositing User: Luke Kirwan
Date Deposited: 02 Mar 2023 07:57
Last Modified: 02 Mar 2023 07:57

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