Dynamic analysis of feasibility in ethanol supply chain for biofuel production in Mexico

Since ethanol is considered an essential additive for biofuel production, there may be the opportunity to employ it as such in Mexico. However, an analysis of the ethanol supply chain should be performed first. Therefore, in order to analyze the main variables of the ethanol supply chain, as well as the feasibility for its use, the present research developed a System Dynamics model based on an idea suggested by SENER (Secretariat of Energy in Mexico). The model explores five possible scenarios (between 2014 and 2030), and evaluates the availability of area for the sowing of sugarcane and grain sorghum crops, the production capacity for ethanol and fuel, as well as the possible reduction of carbon dioxide emissions. The model considers the trends and parameters of the agricultural and energy industries, and produces valuable information about future conditions of the Mexican biofuel and fossil fuel production and supply. The obtained results predicted two situations. First, Mexico would face a fuel shortage in the future. Second, from the amount of fuel available by that time, the biofuel produced and accumulated would collaborate little to meet the domestic fuel demand. Also, as System Dynamics is concerned, it is demonstrated that it is a powerful methodology to simulate and understand the biofuel supply chains in emerging markets as Mexico. (C) 2014 Elsevier Ltd. All rights reserved.