Investigating the techno-economic trade-offs of hydrogen source using a response surface model of drop-in biofuel production via bio-oil upgrading

This study presents a parametric fitting of the economics of bio-oil stabilization and hydroprocessing to naphtha and diesel range blend fuel. The data is fit with a response surface model (RSM). Technical variables evaluated in this study are rate of bio-oil upgrading and natural gas input rate. Economic variables considered include bio-oil, natural gas, hydrogen, catalyst, capital, and fossil carbon costs. Our base case consists of a 1440 tonnes per day bio-oil upgrading biorefinery concept design for the production of naphtha and diesel range blend stock fuels. The RSM represents variation around this base case. The process model includes reforming, stabilization, and hydroprocessing sections. Total project investment for this concept is $171.5 million or $2.34 per gallon of bio-oil input capacity. This base case biorefinery generates 71.8 million gallons of fuel (5182 barrels per day) at a minimum fuel selling price (MFSP) of $2.48 per gallon. We investigated the techno-economic impacts of different hydrogen sources on the bio-oil upgrading process. Hydrogen from bio-oil reforming results in the lowest biofuel emissions but is not always economical. A portion of available bio-oil should be converted to hydrogen under two main conditions: the cost of hydrogen from bio-oil is lower than procuring hydrogen from other sources and the lost income due to a lower biofuel output; and/or when there is a market or policy constraint limiting fossil fuel use. Results indicate that to minimize fuel costs, the amount of bio-oil upgraded should decrease from =90% to 80% as bio-oil prices decline from $1.37 to $0.70 per gallon depending on market conditions. Carbon emission constrains such as those mandated by the Renewable Fuels Standard (RFS) could force bio-oil upgrading rates to less than 90%.