Skip to main content
ARS Home » Plains Area » Brookings, South Dakota » Integrated Cropping Systems Research » Research » Publications at this Location » Publication #243083

Title: Improving the Value Chain of Biofuel Manufacturing Operations by Enhancing Coproduct Transportation and Logistics

Author
item Rosentrater, Kurt
item Kongar, Elif - University Of Bridgeport

Submitted to: Symposium Proceedings
Publication Type: Proceedings
Publication Acceptance Date: 7/22/2009
Publication Date: 11/5/2009
Citation: Rosentrater, K.A., Kongar, E. 2009. Improving the Value Chain of Biofuel Manufacturing Operations by Enhancing Coproduct Transportation and Logistics. International Logistics and Supply Chain Congress 2009, Istanbul, Turkey, November 5-6, 2009.

Interpretive Summary: Biofuels, including corn-based ethanol, can partially meet the increasing demand for transportation fuels. The production of ethanol in the U.S. has dramatically increased; so too has the quantity of manufacturing coproducts. These nonfermentable residues (i.e., proteins, fibers, oils) are sold as ‘distillers dried grains with solubles’ (DDGS), and are used to feed livestock in local markets, but as the industry grows, the need to ship large quantities of coproducts nationally and internationally has also been increasing. Various processing options offer the potential to increase the sustainability of each ethanol plant, and thus the industry overall. However, implementation will be dependent upon how new costs interact with current processing costs. The objective of this study was to model the addition of a pelleting operation at a fuel ethanol plant, and examine the effects on the transportation and logistics of DDGS, including related cost measures. We have simulated the implications of varying DDGS production rates (100 to 1000 tons/d) and pelleting rates (0 to 100%), for a series of DDGS sales prices ($50/ton to $200/ton) using Arena modeling and analysis software. The results indicated that, as the proportion of pelleting increases, the cost of transporting DDGS drastically declines, because rail cars can be filled more effectively. At a DDGS sales price of $50/ton, 100% pelleting reduces shipping costs for each rail car by 71% compared to shipping the DDGS in bulk form, whereas at a DDGS sales price of $200/ton, it will reduce costs by over 91%. Clearly the sustainability of the ethanol industry can be improved by implementing pelleting technology for coproducts.

Technical Abstract: Biofuels, including corn-based ethanol, can partially meet the increasing demand for transportation fuels. The production of ethanol in the U.S. has dramatically increased; so too has the quantity of manufacturing coproducts. These nonfermentable residues (i.e., proteins, fibers, oils) are sold as ‘distillers dried grains with solubles’ (DDGS), and are used to feed livestock in local markets, but as the industry grows, the need to ship large quantities of coproducts nationally and internationally has also been increasing. Various processing options offer the potential to increase the sustainability of each ethanol plant, and thus the industry overall. However, implementation will be dependent upon how new costs interact with current processing costs. The objective of this study was to model the addition of a pelleting operation at a fuel ethanol plant, and examine the effects on the transportation and logistics of DDGS, including related cost measures. We have simulated the implications of varying DDGS production rates (100 to 1000 tons/d) and pelleting rates (0 to 100%), for a series of DDGS sales prices ($50/ton to $200/ton) using Arena modeling and analysis software. The results indicated that, as the proportion of pelleting increases, the cost of transporting DDGS drastically declines, because rail cars can be filled more effectively. At a DDGS sales price of $50/ton, 100% pelleting reduces shipping costs for each rail car by 71% compared to shipping the DDGS in bulk form, whereas at a DDGS sales price of $200/ton, it will reduce costs by over 91%. Clearly the sustainability of the ethanol industry can be improved by implementing pelleting technology for coproducts.