March 19th, 2012

Bioethanol Production in Thailand: A Teaching Case Study Comparing Cassava and Sugar Cane Molasses

By Travis Hamilton Russell and Paul Frymier

CASE STUDY

Thailand is facing a serious problem with their reliance on foreign oil imports. With nearly 90% of their crude oil, gasoline, and diesel being imported, the country is searching for ways to improve their national energy security by lowering their demand for foreign oil. Bioethanol from cassava and molasses are two promising technologies that could help Thailand work toward their goal of energy security. However, debate is still on going to determine which feedstock should be chosen to power the country’s bioethanol industry. This teaching case study presents the background and sustainability analysis for both cassava and molasses based bioethanol as well as teaching notes and discussion questions. It is intended for high school seniors or college undergraduates in courses that address sustainability-related issues and technologies.

Abstract

            Thailand is facing a serious problem with their reliance on foreign oil imports. With nearly 90% of their crude oil, gasoline, and diesel being imported, the country is searching for ways to improve their national energy security by lowering their demand for foreign oil. Bioethanol from cassava and molasses are two promising technologies that could help Thailand work toward their goal of energy security. However, debate is still on going to determine which feedstock should be chosen to power the country’s bioethanol industry. This teaching case study presents the background and sustainability analysis for both cassava- and molasses-based bioethanol as well as teaching notes and discussion questions. It is intended for high school seniors or college undergraduates in courses that address sustainability-related issues and technologies.

 


Background

Transportation energy is one of the most important aspects of a country’s security and economic growth. As such, it presents a great opportunity for the consideration of sustainable development in its future.

Fossil fuels are the primary global transportation energy source, but are also a limited resource. In addition, their continued use amplifies levels of SOx, NOx, CO, and CO2 in the atmosphere, leading to increased acid rain and global greenhouse gas concentrations.

For most of its history, motorized transportation has been linked to the use of fossil oil-based fuels. According to the U.S. Energy Information Association, in 2008, world oil consumption was over 85 Million Barrels per Day or 31 Billion Barrels per Year.1 However, while every nation on earth has need of oil for transportation; over half of the world’s proven oil reserves reside in the Middle East, a historically politically volatile region.2 Therefore, as a means of establishing energy independence from these volatile petroleum resources, many countries have begun investing in the development of domestic alternative transportation fuels.

The 1970s provided the worldwide community with its first glimpse of what a life without energy independence could mean. The 1974 Organization of the Petroleum Exporting Countries (OPEC) oil embargo caused gasoline prices to rise 70%, and the 1979 Iranian revolution and subsequent Iraqi invasion practically shut off Iranian oil supplies and caused prices to double between 1978 and 1981. Both events sent shockwaves across the international energy landscape, and countries worldwide began to develop methods for controlling local oil prices with government legislation and through subsidizing oil imports with increased domestic supply.3,4

Thailand was one of those countries hit with the oil shortages of the 1970s. With the world’s 19th largest population but almost no domestic oil production, it was unable to effectively control transportation energy costs as prices increased due to limited supply.5,6 In 1979, as a response to price volatility in the oil market, the Thai Government created the Oil Fund. This is a government program that generates tax revenue off the import and domestic production of oil and uses this money to subsidize the price of transportation fuel in the country. As a result of successive deregulation, the only fuel that is still supported by the Oil Fund today is gasoline.7

Biofuels, or transportation fuels derived from plants and other biomass, are gaining popularity worldwide as a means of developing domestic fuel production. In the United States, the National Renewable Fuel Standard (RFS) program has outlined a plan to increase biofuel production to 136.26 Billion liters per year by 2022. For 2011, the goal is 52.8 billion liters of renewable fuel or 8% of U.S. domestic gasoline and diesel usage. In addition to the United States, other countries, like Brazil, have also implemented domestic bioethanol production programs.8

Bioethanol is ethanol derived from biomass sources. In the United States, it is currently primarily derived from corn feedstocks; while in Brazil, the chief biomass feedstock is sugarcane. Bioethanol can be used as a substitute to conventional gasoline, CG, in passenger vehicles.  However, it is most commonly used as an additive with gasoline in a mixture called gasohol which can come as E10, 10% ethanol with gasoline, E20, 20% ethanol with gasoline, or E85, 85% ethanol with gasoline. In the US, E10 blends are used in modern vehicles without modifications to the fuel system and engine while specially designed flex-fuel vehicles can run on E85.

Thailand is a country of approximately 67 million people with an automotive density in 2004 of 54 passenger cars per 1000 people.In comparison, the United States has approximately 465 passenger cars per 1000 people. 9 While the number of cars is low by comparison with the U.S., the economy of Thailand has increased drastically in the last 50 years with its GDP increasing from $2.761 Billion as of 1960 to $263.856 Billion in 2009; it is expected that as GDP continues to increase, so will car ownership.10,11 However, in 2005 Thailand was still importing over 90% of their transportation fuel as crude oil, gasoline, and diesel.

2000-2008 saw the prices of crude oil begin to rise significantly as global production dropped and demand rose in countries like China and India. In Thailand, the retail price of gasoline per liter in U.S. dollars increased from $0.36 in 2002 to $0.54 in 2004 to $0.87 in 2008.12

Beginning in the late 1970s and further emphasized in the early to mid-2000s, Thailand realized a need for development of a domestic transportation fuel production process. The Thai Government began to develop their own domestic bioethanol strategy to decrease their need for foreign oil. Table 1 provides a timetable detailing the history of bioethanol production in Thailand through 2002.

 

Table 1. History of Bioethanol Production in Thailand.13

 

1985HRH King Bhumipol requested a study of the cost of producing alcohol from sugarcane for alternative fuel, and an ethanol facility opened in the Royal Chitralada Palace. However, the cost of bioethanol production was found to still be much higher than CG.1994Royal Chitrlada Project (RCP)This project investigated ethanol production from sugarcane with a capacity of 900 liters/batch and 15 automobiles of various makes and models. They found that 10% ethanol could be run without changing anything.1996HRH Princess Mahajakree Sirindhorn opens first gasohol, E10, filling station in the Palace. 

1999

Dr. Dennis Shuetzel, Director of Ford Motor Company, visits the Minister of Science and Technology to discuss a collaborative effort in research of ethanol as a transportation fuel.

The National Metal and Materials Technology Center is requested to test with Ford the viability of E10 gasohol in light trucks.

 

2001

The National Ethanol Committee is established under the Ministry of Science and Technology (MOST) and then transferred to the Ministry of Industry (MOI), now known as The National Biofuels Committee under the Ministry of Energy (MOE).

 

2002

The Thai government sets up the specifications for commercialization of gasohol.

 

 

In 2003, the Thai government established three strategies to address their oil import problem: 1) increase renewable fuel and fuel utilization efficiency; 2) secure alternative oil sources; and 3) increase the energy sources’ value added. Value added is the difference between the cost of production of a material and the price at which it is sold.  As a result of these strategies, the number of gasohol stations in 2005 had increased to nearly 1000 locations across the country; a number which increased to nearly 4,200 or 23% of the country’s total gas stations by 2009.14

The Ministry of Energy (MOE) also designed a Bioethanol Production Plan to take the country into 2022. The details of this plan are listed in Table 2.

 

 

Table 2. Thai Bioethanol Production Plan (2008-2022) in Million Liters per Day, ML/day (Adapted from15 )


ML/day, Short Term

ML/Day, Medium Term

ML/day, Long Term

2008

2009

2010

2011

2012-2016

2017-2022

Production Target

3

3

3

3

6.2

9

On-Line Plants Capacity

1.6

1.7

2.9

N.A.

N.A.

N.A.

Actual Production

0.9

1.1

2.5v

N.A.

N.A.

N.A.

v: Average production capacity during Jan-Apr 2010

 

 

In addition to designing a plan for the production of bioethanol, the Thai Government has set up a plan to increase its affordability through tax incentives and subsidies. Ethanol producers get an excise tax exemption on ethanol of 6.39 Thai Baht [THB]/L ($1 US is approximately 30.41 THB, Feb. 27, 2012), and gasohol refineries are subsidized using the Oil Fund. Therefore, retail prices of E85, fuel derived from 85% ethanol, are 30% lower than E10, and E10 prices are 22-26% lower than CG. The Thai Government also lowered excise taxes on manufacturers of E85 vehicles and lowered import duties for Flex Fuel vehicles, cars capable of running on E85, E10 or CG from 80% to 60%.15

Feedstocks of Interest

Biofuels are derived from plant or microorganism-based feedstocks. In the case of bioethanol production in Thailand, the primary feedstocks of interest are cassava root and molasses, a by-product of sugar production from sugar cane. Therefore, a full understanding of the bioethanol production system in Thailand requires knowledge of the background and current usage of both cassava and molasses.

Cassava is starch crop classified into either “sweet” or “bitter” varieties. While “sweet” cassava can be directly consumed, the “bitter” is poisonous due to high levels of hydrocyanic acid. Currently there is no industrial production of “sweet” cassava. It is grown only in small scale, single household farms.16 

“Bitter” cassava, is what we will refer to as cassava for the rest of the study. It is the second largest industrial crop in Thailand behind only rice and is widely utilized in the starch industry as a sweetener, in the chip and pellet industry, and as animal feed. Both the fresh cassava root and dry chips can be used in the ethanol conversion process, but the chips are preferred as they are easier to store on-site for when roots are not being harvested.16,17

Cassava is grown year round with minimal inputs. It does not normally require irrigation or control of insects and pests. It is also a very hearty crop, capable of growing in areas where other biofuel crops could not. 17,18 Also, cassava is available to be processed into bioethanol year round because of the crop’s unbounded time window for planting and harvesting and its ability to be stored in high quantities as dried chips for use during low harvest periods.18

Thailand is the world’s largest cassava producer and exporter. In 2008, Thailand contributed nearly 70% of the world’s cassava exports from a cultivated area of 1.24 M hectares yielding 18.73 metric tons roots/hectare. (1 hectare = 10,000 m2.) 16

Sugarcane is also a valuable crop in Thailand. As a tropical country located in Southeast Asia, its climate is well suited to sugarcane growth. Cultivation is normally done in non-irrigated areas in the northern areas of Thailand; the northeastern, central, and northern regions of Thailand contribute 38%, 35% and 27% of the total planted area, respectively. It is typically planted either just before or just after the rainy season and must grow for 10-12 months before being harvested. Unlike cassava, sugarcane has a very limited harvest window; it is only available for 4-5 months out of the year, typically December-March.16

Recently, production has been increasing with increased demand for bioethanol. In 2007, sugarcane yields in Thailand were 59 metric tons/ha (59 mt/ha) with a total production of around 60 million metric tons (Mmt). This supported a sugar production of between 5-6.5 Mmt with exports accounting for nearly 70%, and domestic sugar use consuming the rest.19 Just one year later in 2008, production had increased to 73.5 Mmt of cane (69.68 mt/ha). In 2008, Thailand was the world’s second largest sugar exporter after Brazil. 16

Sugarcane can be directly used to create ethanol with a conversion factor between 12.5 and 14.3 kg of sugarcane/L of ethanol. However, current debate on the revenue sharing system for sugarcane profits between farmers and mills has led to only limited sugarcane to ethanol production.16 Therefore, it is not considered as a feedstock of interest.

Molasses is considered in this study as the second feedstock of interest in Thai bioethanol conversion. It is a byproduct of sugar production from sugarcane that contains around 50% sugars which can be fermented by yeast to ethanol. One mt of sugarcane is capable of producing approximately 106 kg of sugar and 46 kg of molasses. Before being introduced as a bioethanol feedstock, approximately one third of all the molasses produced in Thailand was exported with the other two thirds being used primarily as an additive in animal feed or simply disposed of on-site. After its introduction into ethanol production in 2008, approximately 78% of all the molasses produced in Thailand was used domestically with bioethanol accounting for 37%, animal feed and MSG production using 11%, and the remaining 30% going into liquor production. A typical molasses-to-ethanol conversion rate is 4 kg of molasses/ L ethanol. However, this number can vary based on production practices and sugar content of the molasses. 16,19

Lastly, it is important to have a basic understanding of the biochemistry involved in the conversion of a feedstock into bioethanol. Molasses is a sugar feedstock. As such, it can be directly fermented into ethanol using yeast enzymes which convert its sugars into alcohol. However, cassava is a starch feedstock, and as such, it requires an additional step, saccharification, which uses enzymes to convert the starch into sugars which can then be fermented.

Sustainability Analysis

Any investigation into sustainability should begin with a definition of sustainability. In 1987, a UN’s Brundtland Commission published a report titled Our Common Future in which they defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” With that definition in mind, this case study breaks down its sustainability analysis into three areas: economic sustainability (whether a process can make money and how it compares to other competing processes), environmental sustainability (the impact of the process on the environment), and social sustainability (the influence of a process on society).

This study will begin with an investigation of the social impacts of bioethanol production in Thailand and then detail the economic and environmental impacts.

Social Sustainability

In the development of bioethanol production from food or animal feed crops (in this case cassava and molasses), the “food versus fuel” debate arises as a prominent discussion of social sustainability. The debate can be shaped as follows. “To what extent should arable land and water that could be used to produce food instead be used to produce bioethanol?” To assess the social aspects of sustainability in bioethanol production, this study will address the food versus fuel debate by comparing the land and water use of both cassava and molasses.

In addition to investigating land and water use, there are other aspects of social sustainability to be considered with bioethanol. Other commonly mentioned advantages of bioethanol use include reductions in foreign oil dependence and fossil fuel consumption over CG. This study investigates all four criteria in the social sustainability of bioethanol production. Additionally, this section will include a brief background and valuable information about the life cycle analysis method and case studies chosen for comparison in this study.

-Land and Water Use

The Thai government has outlined development guidelines for both cassava and molasses that seek to meet their long term goal of 9 ML of bioethanol/day without increasing the 2008 plantation areas for either cassava or molasses. They are attempting to entirely compensate for increased demand by increasing crop yields per hectare and not by increasing the land area devoted to production. Those 2008 planted areas are 1.24 M ha for cassava and 1.05 M ha for sugarcane.16 For comparison, Thailand’s total arable land area in 2008 was listed as 15.2 M ha.20

Although the Thai government is attempting to hold land use constant while increasing bioethanol production, research has shown it may not be possible. Silalertruksa et al. have shown that without the addition of direct sugarcane to bioethanol production, Thailand will be forced to increase their cassava and sugarcane planted areas. 16 Therefore, it is worth investigating which crop requires the least land to produce ethanol.

Figure 1 lists the land and water use of cassava and molasses. The information listed for molasses is calculated based on growing sugarcane to create bioethanol from molasses and sugar. An allocation ratio must be used to account for the amount of the total land and water used by the sugarcane that should be associated with the molasses bioethanol production. Since the two products of interest in sugarcane farming are sugar and molasses, the allocation ratio is set between sugar and molasses. It is generally accepted that the allocation ratio can be set either through analysis of the energy content of the two primary products or through comparing their economic value.  In 2008, Nguyen et al. defined the allocation ratio for molasses based on economic value as 0.12.21 In 2009, Silalertruksa and Gheewala defined the molasses allocation ratio based on the energy content of the sugar and molasses as 0.23.22 In this study we will use a value of 0.18, the average of the two values, as the allocation value for molasses when looking at its land and water use.

Comparison of the land and water use for cassava and molasses shows that bioethanol produced from molasses requires less land and less water than bioethanol derived from cassava. However, it is important to remember that cassava is a very hardy crop and can be planted in areas where sugarcane and other food crops cannot. In other words, it can be planted and harvested while not directly competing with food production.

Figure 1. Land and Water Use of Cassava and Molasses19,23

 

 

 


 


Background of LCA

 

In order to analyze the total fossil fuel and petroleum use associated with bioethanol production from cassava and molasses, as well as their environmental and economic sustainability, it is necessary to perform a life cycle analysis of both cassava and molasses bioethanol production.

Life cycle analysis, LCA, is an all-inclusive assessment of the environmental and economic impacts of a product at every stage of its existence. In the case presented here, LCA considers the total impact of bioethanol production from the following stages: growing and harvesting crops, transportation of feedstocks to the bioethanol plant, and production at the plant.28 Final vehicle combustion is oftentimes but not always included. Many publications have dealt with the life cycle analysis of cassava and molasses bioethanol in Thailand.17-19,21-22,24-27,29For simplicity purposes, this case study will focus on a few select studies that provide an appropriate understanding of bioethanol production in Thailand.

The first LCA chosen is one published by Silalertruksa et al. in 2009.22 At the time of the study, there was only one full scale cassava ethanol plant in Thailand, and this study compares how that plant is run against how it was designed to run, and also against an average of three molasses bioethanol plants in the country. From here on, the running cassava plant will be known as (CR) while its designed operation and the average of the molasses plants will be known as (CD) and (MAVE), respectively.

The LCA of CR, CD, and MAVE considers the creation of pure bioethanol and does not include final combustion in vehicles. As such, it is known as a “cradle to gate” study. (The cradle is the birth place of the raw materials, and the gate is the gate out of the plant.) The primary energy usage for the production of bioethanol comes from steam production during ethanol conversion and electricity production for the plant. Choice of primary energy supply is the most important factor in determining fossil fuel use in the system as well as certain environmental impacts.

In this study, the steam production for the cassava-based ethanol plant is primarily coal with some biogas. Biogas is a combustible gas emitted from the anaerobic stillage remaining after ethanol conversion. The three ethanol plants constituting MAVE procure steam by either buying it from the sugar mill or by producing it on site by combusting rice husks and biogas and/or corn cobs.

The cassava plant buys its electricity from the local grid while the sugar mills buy it from the sugar mill, use rice husks to generate power in a steam turbine, and/or buy it from the local grid.

The next LCA investigated in this study is a combination of publications by Nguyen et al.21,26-27,29 Unlike the work of Silalertruksa et al., Nguyen did consider final combustion in vehicles in the form of E10. Therefore, the cassava and molasses bioethanol from these studies will be known as CE10 and ME10, respectively, and the study is known as “cradle to grave”. (The grave is the final usage and/or disposal of a product)

Nguyen et al. investigated a single molasses plant, ME10, similar to those constituting the MAVE in the previous study. The process energy sources for ME10 were coal, rice husks, and biogas from 12% of the anaerobic stillage.

The data for the cassava-based ethanol plant in this study is not based on a full-sized bioethanol plant. Instead, Nguyen et al. scaled up the information on a small pilot plant, CE10. This pilot plant was operating on the process energy sources of biogas and fuel oil.

- Fossil Fuel Use

One of the most commonly cited societal advantages of bioethanol production is a reduction in fossil fuel use. For bioethanol production, it is important that the final bioethanol fuel possess more energy than it took in fossil fuels to create it. This ratio of net bioenergy outputs / net fossil fuel inputs is called the Renewability. Renewability > 1 signifies that the bioethanol fuel provides an energy return on its fossil fuel investment. If Renewability < 1, the bioethanol fuel is using more energy in fossil fuels than it is going to ultimately provide. Silalertruksa et al. investigated the Renewability of CR, CD, and MAVE, and they are given as 0.87, 1.38, 2.90 respectively.

An immediate and striking observation is that the Renewability of CR, the running cassava plant, is < 1. However, note that CD, its designed operation, > 1. The major cause of this discrepancy is poor steam boiler maintenance. The feed water to CR is very hard, and it calcifies the boiler tubes if they aren’t cleaned regularly. This calcification lowers the boiler’s efficiency and causes the plant to burn more coal than originally designed. Proper boiler maintenance would resolve most of the difference between CR and CD.22

Note that in this study the Renewability of molasses production is greater than that of cassava, even at ideal operating conditions. This can be primarily attributed to the fact that the cassava bioethanol plant is burning coal for steam production and the molasses plants are not.

-Petroleum Use

The primary goal of the Thai government in increasing the use of bioethanol fuel is a reduction in petroleum use. Reducing petroleum use decreases the amount of petroleum imported into Thailand and provides the country with more energy security in the transportation sector. With that in mind, Nguyen et al. investigated the life cycle petroleum reduction potential of both cassava- and molasses-based E10. The results of this study are given in Figure 2; the study was based on the distance traveled by a 2000 1.6L Toyota Camry on a full tank of CG.21,27

 

Figure 2. Petroleum Use of Cassava and Molasses-Based E10 (% reduction listed with CE10 and ME10).

 

Both cassava and molasses E10 bioethanol reduce petroleum use versus CG, but while both CE10 and ME10 replace 10% of the final fuel with bioethanol, their life cycle fossil fuel reductions are less than 10%. This is due to the use of petroleum in tractors during planting and harvesting and trucks during transportation of feedstock to the plant. ME10 does use less petroleum than CE10, and this is partially due to the fact that the sugar industry is more mature and better developed than the cassava industry. Therefore, it has had more time to work on minimizing transportation. As the cassava industry grows, it should further reduce its transportation needs as well.

Environmental Sustainability

Now that we have studied the social sustainability of cassava and molasses based bioethanol, let’s turn our attention toward the environment. Four criteria will be used to determine the environmental impact of cassava and molasses bioethanol versus CG: 1) Global Warming Potential (GWP), (kg CO2 eq.); 2) Acidification (g SO2 eq.); 3) Nutrient Enrichment, or Eutrophication (g NO3- eq.); and 4) Photo-Oxidation (g C2H4 eq.). The results of the environmental sustainability study are presented in Table 3; lower numbers are presumed to be better for the environment.


Table 3. Environmental Impacts of Cassava and Molasses Bioethanol.22,26,29


Per Liter of Gasoline Equivalent

Gasoline#

CR*

CD*

MAVE*

CE10#

ME10#

Unit

 

GWP

kg CO2 eq.

3

4.43

2.96

1.00

2.81

3.07

Acidification

g SO2 eq.

3

40.37

24.62

19.25

3.07

3.29

Nutrient Enrichment

g NO3- eq.

5

13.19

10.25

71.61

4.38

5.10

Photo-Oxidation

g C2H4 eq.

1.53

1.95

1.23

8.93

1.54

1.79

 

# Includes final combustion (0.989 L CG = 1 L of E10)

* Does not include final combustion (0.65L CG = 1 L ethanol)

 

Remember that CE10 and ME10 are still composed of 90% CG. As such, their life cycle environmental impacts include the petroleum drilling and refining associated with 90% CG. The E10 to CG conversion rate of 0.989 is set based on fuel economy data taken from driving a Toyota 1.6L/2000 Camry. Although ethanol contains less energy per unit volume than gasoline, ethanol burns more efficiently in vehicles than CG. Therefore, the ratio is not set entirely on the energy content of ethanol in the E10. Analysis on CR, CD, and M AVE is done on pure ethanol production but does not include final combustion in a vehicle. The 0.65 conversion ratio for pure ethanol and CG is set based on the energy content of the fuel and does not account for improved combustion of ethanol because pure ethanol vehicles aren’t widely produced. As such, the CR, CD, and MAVE values might overestimate the amount of ethanol required and therefore lead to overestimates of their environmental impacts.

Table 3 shows that both studies reveal the potential for GWP reduction compared to CG. However, the GWP is closely linked to coal use as a primary power source. As such, in the Silalertruksa et al. study where the cassava plant burned coal, its GWP is higher than that of molasses, but in the Nguyen et al. studies where the molasses plant burned coal, its GWP is worse than that of cassava. Reducing or eliminating coal use in power production for either cassava or molasses bioethanol could bring GWP under that of CG.

Acidification is likewise tied to coal use due to its sulfur content; if the molasses plant uses coal instead of the cassava plant, it will produce higher acidification and vice versa.  However, it can be seen that regardless of the process energy source used, bioethanol is responsible for more acidification than CG. This is due in part to the fertilizers used during cultivation of cassava and sugarcane.

Nutrient enrichment is also related to fertilizer use, but unlike acidification, one option always stands out regardless of process energy source; cassava is better than molasses in terms of nutrient enrichment. In fact, CE10 is shown to be better than CG. This is due to the more complete combustion of ethanol versus CG. However, the savings from more complete combustion will be overtaken by the cost of expanded fertilizer use as bioethanol content increases in the fuel. Cassava’s advantage over molasses is twofold: Cassava requires less fertilizer, while leftover sugarcane trash is open-burned in the fields for soil remediation after the sugarcane harvest, releasing harmful air emissions.

Cassava bioethanol is also better in terms of photo-oxidation. As a matter of fact, the value of 1.23 for CD shows that increasing cassava bioethanol content in fuel could reduce levels of photo-oxidative materials under those for CG. The molasses rating suffers from cane trash open-burning.

Economic Sustainability

Economic sustainability is often defined as the ability for a product to produce profit; in the case of two products capable of producing profit, the one that produces more profit is more economically sustainable. For bioethanol production, the question is simple. Is bioethanol in any form, E10, E20, or E85 cheaper to produce than CG? If so, then it will compete favorably in the fuel market. If it is not, then CG will continue to hold its market share.

While the question is straightforward, the answer is not. There are multiple ways to define the cost of a product. Obviously, there is the base cost of production; for bioethanol and CG this is known as the ex-refinery price. This is the cost that has the most direct impact on the retail price of fuel. Sorapipatana and Yoosin investigated the retail cost of CG from 2002-2005, compared it to the cost of 1 L of CG equivalent bioethanol from cassava, and saw that when the CG price hit its maximum of 20.86 Thai Baht [THB]/Liter, bioethanol was cheaper to produce than CG. However, the average price of CG during that 4 year span was 11.50 THB/Liter, well below the average bioethanol price of 18.15 THB/Liter.30

Another way to look at the cost of a product is Full Cost Accounting (FCA). FCA relies on a technique known as Total Society Cost (TSC). TSC is defined as the sum of the actual production cost of a product (its ex-refinery price) plus the external cost on the environment and human health of air pollutants and fossil oil use associated with the product. An example would be acid rain production from the NOx and SOx emissions of a coal-fired power plant. TSC would calculate the damage caused by that acid rain and add it onto the production cost of the electricity.

Nguyen et al. investigated the TSC of E10 compared to CG in 2008. In the study, air emissions (CO, CH4, N20, CO, NO2, SO2, VOCs [Volatile Organic Compounds], and PM10 [Particulate 10 Micros and smaller]) and fossil oil use were assigned an external damage cost per kilogram. Then the total mass released, or in the case of fossil fuel, consumed, of each of these criteria was multiplied by their cost per mass and added to the ex-refinery price to calculate the TSC. The results of this are given in Figure 3.

 

Figure 3. Total Societal Cost of CG, CE10, and ME10 (THB/FU*) 21,27 * FU = Distance traveled on full tank of CG for 2000 1.6L Toyota Camry


 


 

 

Assuming $1 U.S. = 30.41 THB, the TSC per FU of CG, CE10, and ME10 are $44.21, $44.28, and $45.11, respectively. This study shows that the TSC of E10 from either cassava or molasses in 2008 was comparable to that of CG. Also, note that the ex-refinery price was also very close to that of CG at $28.73, CE10 at $29.70, and ME10 at $29.68. Sorapipatana et al. pointed out that as the price of CG continues to rise, ethanol should rise at a slower rate due to its reductions in fossil fuel usage and therefore become cheaper to produce than gasoline. As such, given the rising cost of fuel, bioethanol from either cassava or molasses should become more fiscally sustainable compared to CG.

Teaching Notes

Conclusion

Attempting to make a decision on the best choice of feedstock for bioethanol production in Thailand is complicated. Molasses uses less land and water than cassava, but cassava can be grown in areas other food crops cannot. Molasses reduces oil imports more than cassava and is therefore better in terms of national energy security, but cassava is better in terms of the environment with its advantages in nutrient enrichment and lowered photo-oxidation. As is the case with many sustainability issues, the method of weighting each of the dimensions of sustainability may determine which choice is ultimately judged as the better.

-Instructor  Objectives

1) Allow the students to weight the respective pros and cons of molasses and cassava and debate amongst themselves what they feel are the most important criteria.

2) Familiarize students with the basic concepts of sustainability and the connections between background, social sustainability, environmental sustainability, and economic sustainability.

3) Develop the students’ understanding of sustainability as a global issue involving the entire world and everyone in it by looking at a case outside the U.S.

-Uses of the Case

This case is intended for high school seniors or undergraduates enrolled in courses that address sustainability-related issues and technologies. However, it could be used along with more detailed research in upper level undergraduate or graduate classes.

One possible use for this case study is to have the students examine the information in the case and then allow them to break off into three teams: 1) pro cassava; 2) pro molasses; and 3) honest brokers/decision makers. As such, they can be allowed to communicate all the important information while working through the decision process.

It would also be a good idea to take some time to discuss the international nature of sustainability by looking at the impact of global oil prices on Thailand’s decision, and touch on the possible impacts of reduced cassava and molasses exports from increased bioethanol production.

A series of discussion questions and possible answers has been provided to help generate discussion and/or evaluate reading comprehension of the study.

-Discussion Questions and Answers

1. What are the two primary feedstocks being considered for biofuels production in Thailand?

Cassava and molasses from sugarcane

 

2. What was Thailand’s response to the first worldwide oil crisis in the 1970’s?

 

They implemented the Oil Fund which placed a tax on fuel that was then used to subsidize the price of fuel when market fluctuations caused it to rise significantly.

 

3. Why is Thailand interested in developing production of biofuels?

 

Before their biofuels program, Thailand was importing nearly 90% of their crude oil. Therefore, they were susceptible to price fluctuations in the market and wanted to develop biofuel production to begin domestically controlling their automotive fuel market. This should allow them to have more control over crude oil price fluctuations.

 

4. How would demand for domestic biofuel production change if oil reserves were not located in the Middle East?

 

While the political unrest in the Middle East has obviously affected global oil supply, contributed to the desire for domestic auto fuel production, and increased the rate of development in the last decade, global supplies would be limited regardless of their location and there would still be desire for domestic automotive fuel production.

 

5. What were the three strategies the Thai Government implemented to address their oil import problem in 2003?

 

Increase renewable fuel and utilization efficiency, secure alternative oil sources, and increase the value added of energy sources.

6. What are the advantages to molasses for biofuels production?

It uses less petroleum than cassava per volume of ethanol produced which favors national energy security. It also uses less land and water per liter of ethanol produced which should minimize impacts on other agricultural development. It is also the more established technology with much more experience in its development.

7. What are the advantages of cassava for biofuels production?

 

The production of cassava is responsible for fewer air emissions per volume of ethanol produced, making it more environmentally sustainable. Also, while it uses more water than molasses, it is more flexible in the areas which it can be planted making it more suitable for a larger possible planting area. Finally, it does not need to be rotated with other crops, as sugarcane does, which should allow for more consistent supply.

8. Do you agree with the concept of full cost accounting? Why or why not? Should the consumer price be the only determination in Economic sustainability? Should external impacts be assigned a dollar amount?

Full cost accounting is not perfect. It obviously relies on the conversion of the economic impacts of external releases into total society costs. This requires some inherent assumptions to be made which can be debated. However, it is a powerful tool that allows direct comparison to be made between environmental and economic sustainability. As such, many people find it to be a valuable tool. It is not perfect though, and some people feel that it over simplifies the issues of environmental and human health impacts. These people argue that the external impacts should be considered separately.

 

9. Which should carry more weight, environmental impacts or reducing dependence on foreign oil for national security? Why?

Answers will vary among the students. Probably the most common answer is that it should be somewhat balanced and depend on the individual situation. For this study, cassava provides reduced environmental impacts while molasses further reduces foreign oil dependence.  This might be a great opportunity to observe which students feel one way versus another. The instructor could then place those students who feel very strongly one way in the appropriate pro molasses or pro cassava group.

10. In the US, corn use for biofuel production has caused a rise in food prices. Should edible crops and farmland that could be used for food production be utilized for automotive fuel production? Why or why not?

 

There will probably be two opinions that dominate this discussion. On one hand, food prices are directly linked to world hunger and an increase in food price will drive up the number of malnourished people. However, there are benefits to biofuel production as have been mentioned throughout the case study. The students should be allowed to debate the merits of both arguments. Once again, the most common answer will probably be to try and strike a balance between biofuel production and food prices.

 

11. Biofuels cannot completely replace gasoline for automotive transportation. There isn’t enough land available to do it. With that in mind, is it a good idea for governments and industries worldwide to be investing so much time and money into biofuel development? Should they be focused on development of other alternatives? Why or why not?

 

Conversion of sugars and starches to biofuel is an existing technology that can be implemented very quickly. Biofuels can be viewed as a means of extending petroleum reserves to allow more time to develop the technologies that will ultimately meet our demand for automotive fuel. The extent to which biofuels will extend petroleum reserves is as yet unknown with any degree of confidence.  However, due to the mature state of the technology, it is the leading current technology for a petroleum replacement.

 

12. Discuss which aspect of the biofuel industry you feel will drive it to maximum development i.e. supply of ethanol for fuel or production of vehicles capable of running on high concentrations of ethanol ex.E85?

 

It is a bit of a balancing act. Without the availability of fuel, E85 vehicles will not make a significant impact in the market, but without vehicles to run on large amounts of ethanol, it will probably continue to be used as an additive and not a primary automotive fuel. In Thailand’s case, the government has decided to support both sides with significant tax incentives. They realize that one cannot occur without the other.

For more information on Thailand’s automotive tax structure and its impact on alternative fuel vehicles, consult Goedecke et al.31

Acknowledgments

This material is based upon work supported by National Science Foundation Grant No.DGE0801470, “Sustainable Technology through Advanced Interdisciplinary Research”(STAIR), awarded to the University of Tennessee Knoxville. Also, thanks go out to all the members of the spring 2011 offering of the University of Tennessee course, Staircase II, for their valuable input into the case study.

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