Biofuel and petroleum-based fuel supply chain research: A literature review

During the last decade, countries around the world - especially the U.S., Brazil, and many in Europe - have worked to accelerate the commercialization of a biofuel industry. As pilot plant studies for the second-generation biofuel (e.g., cellulosic biofuel) currently seek to determine the most viable feedstocks and processing technologies, it is an opportune time to formulate operations research (OR) models of the biofuel supply chain (SC) so they might be used to implement the technologies that prove to be most promising. This paper provides a literature review of research on the biofuel SC. It classifies prior research according to decision time frame (i.e., strategic, tactical, operational, and integrated) as well as level in the supply chain (i.e., upstream, midstream, and downstream). In addition, it reviews related research on agri-products, which have some commonalities relative to harvesting and perishability; petroleum-based fuels, which have some commonalities related to distribution (some biofuels can be mixed with gasoline but others cannot); and generic supply chains, which provide some applicable modeling structures. Finally, this paper emphasizes unique needs to support decisions that integrate the farm with commercial levels (e.g., storage, preprocessing, refining, and distribution) and identifies fertile avenues for future research on the biofuel supply chain. OR models are needed to help assure the economic viability of the biofuel industry. They can be used by growers, processors, and distributors to design and manage an integrated system and by government to inform policies needed to stimulate the growth of the industry and, perhaps, subsidize it. (C) 2011 Elsevier Ltd. All rights reserved.