Coordinated Management of Agricultural Waste and High-tech Value Bioproducts

Abstract The use of biomass has been associated mainly with the energy or biofuels. However, the production of high value-added products such as chemical building blocks, show a feasible alternative. However, the coordination of all the players within a market is complex because is necessary ensuring that the balance of profits generated will be greater than production and logistic cost, becoming an optimization problem. Therefore, we propose a coordination framework for managing lignocellulosic biomass from agricultural residues in a scalable manner by orchestrating biomass exchange, transportation, and transformation into value-added products, specifically: Levulinic acid and furfural. In the proposed framework, suppliers and consumers of biomass and derived products as well as transportation and technology providers bid into a coordination system that is operated by an independent system operator. All locations, prices for all biomass types and derived products are obtained by the operator by solving a dispatch problem that maximizes the social welfare and that balances supply and demand across a given geographical region. Through the coordinated framework, cleared transportation flows, locations and technologies involved are obtained to meet demand. The production of Levulinic acid was 330 Kt/year and 394 Kt/year of Furfural. Which represent 3% of global demand of raw materials for methyltetrahydrofuran. On the other hand, the benefit generated to biomass suppliers exceeds $27 million / year, which would represent an increase in social welfare in the area, specifically to farmers. The framework allows to identify guidelines of the market behaviour considering all market players, with these guidelines is possible propose actions to be able to project a more competitive market for all products and that favors all market players.