Potential leverage points for development of the cellulosic ethanol industry supply chain

The potential long-term impacts and systemic effects of incentives are of great interest to the biofuels industry and decision makers, particularly with regards to forthcoming mandates for biofuels. We have used the Biomass Scenario Model (BSM) to build a theoretical understanding of the role of incentives on the evolution of the biomass-to-biofuels market. It models a broad range of biofuels such as renewable gasoline, diesel, and aviation fuel. In this paper, we focus on cellulosic ethanol as we describe model-based insights into potential incentives that are aimed at stimulating industry growth while tempering overall incentive-related government expenditures. Subsequent research can test the key insights gained through BSM simulations against actual policy implementation and actual outcomes.