Biofuels & Bioenergy

This study presents mathematical models that capture the impact of different carbon emission-related policies on the design of the biocrude-for-biodiesel supply chain. These are two-stage stochastic programming models which identify locations and production capacities for biocrude production plants by exploring the tradeoffs that exist between location, transportation, inventory costs and emissions in the supply chain. The study analyzes the behavior of the chain under different regulatory policies such as carbon cap, carbon tax, carbon cap and trade, and carbon offset mechanisms. A number of observations are made about the impact of each policy on the supply chain designs and costs. The state of Mississippi is used as the testing grounds for these models. A number of solution algorithms are proposed to solve these problems, and ArcGIS is used to visualize and validate these solutions.