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Appalachia SAF from Hardwood : 545_50

Biorefinery Size 545,000 tons per year and distance from a logging road is less than 1 mile​.

Three biorefineries could be located in the Central Appalachia area

  • The biorefineries are located at
    • Surry, NC
    • McDowell, NC
    • Morgan KY
  • Total feedstock cost delivered to biorefineries — $104.8 million
  • Average per ton-mile distance from field to biorefinery facility is 66.5 miles each ton of hardwood travels.
Map showing locations for three biorefineries in the Central Appalachia area. Locations of biorefineries are Surry, North Carolina; McDowell, North Carolina; and Morgan, Kentucky.
Legend for map of locations of three biorefineries located in Central Appalachia area.

Biorefinery Cost of Feedstock

Site NumberCountyStateQuantity Forest residuesTotal CostTransportationAverage DistanceTotal Feedstock Cost
Dry short tons$/yearton milesmiles/ton$/ton
1SurryNC545,197$30,601,15729,337,04053.8$56.13
2McDowellNC545,033$35,424,53836,639,70867.2$65.00
3MorganKY544,761$38,809,21642,607,03878.2$71.24
Total/Average1,634,992$104,834,911108,583,78566.4$64.12

BEA Regions

BEA Regions

Quantity of Forest Residues Supplied to the Biorefineries by BEA region

BEASurryMcDowellMorganTotal
dry tons
1031,254200,276231,529
297,269156142,737150,162
3135,054122,891157,945
3363,16863,168
4028,61928,619
66315,6828,277323,959
68116,635116,635
818,52985,61330,501124,642
8811,1863,03114,217
94276,704276,704
138147,410147,410
Total545,197545,033544,7611,634,992

Cost of Delivered Forest Residues Supplied to the Biorefineries by BEA region

BEASurryMcDowellMorganTotal
Dollars
10$1,931,650$11,176,174$13,107,824
29$458,346$13,276$9,874,489$10,346,111
31$2,187,282$8,572,349$10,759,631
33$4,631,618$4,631,618
40$1,806,965$1,806,965
66$16,828,598$636,397$17,464,995
68$7,236,837$7,236,837
81$523,149$6,855,219$2,538,341$9,916,710
88$934,287$266,171$1,200,458
94$19,691,631$19,691,631
138$8,672,131$8,672,131
Total$30,601,157$35,424,538$38,809,216$104,834,911

Cost to Transport forest residues to biorefinery

BEASurryMcDowellMorganTotal
Dollars
10$724,479$2,647,502$3,371,982
29$247,278$8,592$3,939,965$4,195,834
31$701,480$2,666,905$3,368,385
33$1,443,105$1,443,105
40$857,280$857,280
66$3,974,040$248,162$4,222,202
68$2,541,242$2,541,242
81$257,215$2,870,891$1,111,652$4,239,759
88$375,016$154,227$529,242
94$5,701,953$5,701,953
138$3,189,990$3,189,990
Total$9,094,482$11,358,309$13,208,182$33,660,973

Average miles a ton of feedstock travelled

BEASurryMcDowellMorganTotal
Ton miles/ton
107543047
291101788990
316570069
33007474
40009797
664197042
68070070
8197108118110
880108164120
94006666
138700070
Average54677866

Biorefinery Information

  • Biorefinery capacity is measured by feedstock input
  • In this analysis, biorefinery input was 545,000 dry tons per year
  • Assuming a Gasification Fischer Tropsch biorefinery with expected production in terms of  
    • Sustainable Aviation Fuel – 40%
    • Diesel – 40%
    • Naphtha – 20%
  • 1,090,000 wet tons dried 10% moisture content
  • Working 330 days/year and 10 hours/day, 16-17 trucks must be emptied every hour or 1 truck every 4 minutes if they are hauling 20 tons of chips. If they have a longer trailer and can haul 22.5 tons of chips, then they need to unload 14 to 15 trucks per hour. 

The biorefineries

Each with a capacity of 545,000 dry short tons or 495,000 dry MT per year

  • Three biorefineries were located.
    • Surry, NC
    • McDowell, NC
    • Morgan, Ky
  • Each producing
    • SAF – 12.6 million gallons
    • Diesel – 10.7 million gallons
    • Naphtha – 6.2 million gallons
  • Gross Revenues
    • Fuel – $425 million
    • RINS — $52 million
      • Assumes RIN price of $1.22 and an EV factor of 1.7 for SAF and Diesel.
  • Breakeven Plant Gate Fuel Price when assuming RINs and a 12.2% on investment
    • SAF — $4.90/gallon
    • Diesel – $5.05/gallon
    • Naphtha – $4.26/gallon

Biorefinery Operations

Biorefinery Investment and Operating

SAF Prices
CountyStateBEA Investment (CAPEX)Operating (OPEX)No IncentivesWith RIN Incentive
Million $$ per gallon
SurryNC66561107.7$6.22$4.48
McDowell NC10562112.5$6.40$4.66
MorganKY94564116.$6.52$4.78

RIN values based on D3 July-Dec 2020 RIN average value or $1.22 multiplied times the EV value of 1.7.
Adapted from Brandt, K, Tanzil AH, Garcia-Perez M, Wolcott M, 2021, GFT_CAEP-v6.xlsm, Excel Notebook, January 1,2021 email.

Operating Expenses

Biorefinery Operating Expenses - Fixed Operating Cost 44%; Feedstock 28%; Catalytic Cost 3%; Utilities 22% and Salary 3%.

Fixed Operating Costs include:
1% of FCI for insurance, 1.5% of FCI for local taxes, and 6% of FCI for maintenance. In addition, Overhead is estimated at 60% of salaries.


Annual Economic Impact to the Central Appalachian Region if the three Biorefineries are established

  • With an investment of $1.7 billion, $1.2 billion is spent in the region
  • This results $2.1 billion in TIO resulting in a multiplier of 1.7. For every million dollars spent, an additional $0.7 million is generated in the regional economy.
  • The investment transactions result in an one-time increase in Gross Regional Product of $1 billion.
  • Leakage does occur as $500 million of the investment leaves the region based on the regions local purchase coefficients.
  • Employment increases also.
  • Nearly 14,000 jobs are created during the construction period of these biorefineries.
  • Resulting in $700 million in labor income when incorporating the multiplier effect.

Total Industrial Output (TIO Million 2021$)

TypeDirectIndirectInducedTotal
GFTv5239.277.382.1398.7
Salary GFTv567.50.067.5134.9
Logging25.06.614.746.3
Proprietor Income, RINs and Salaries230.60.0177.9408.5
Transportation36.715.815.467.8
   Total599.099.6357.61,056.2

Employment (Number of Jobs)

TypeDirectIndirectInducedTotal
Operating GFTv51354025861,123
Salary GFTv500498498
Logging276102105484
Proprietor Income, RINs and Salaries001,3131,313
Transportation343103109556
   Total7546072,6113,972

Gross Regional Product (GRP Million 2021$)

TypeDirectIndirectInducedTotal
Operating GFTv5131.435.845.0212.2
Salary GFTv567.50.036.7104.2
Logging16.04.08.228.2
Labor230.60.097.8328.3
Transportation20.37.78.636.5
   Total465.747.4196.4709.5

Total industry output is defined as the annual dollar value of goods and services that an industry produces. Employment represents total wage and salary employees, as well as self-employed jobs in a region, for the both full- and part-time workers. Labor income consist of employee compensation and proprietor income. Total value added is defined as all income to workers paid by employers (employee compensation); self-employed income (proprietor income); interests, rents, royalties, dividends, and profit payments; and excise and sales taxes paid by individuals to businesses.


Final Comments

  • Using the  ASCENT GFT to SAF TEA and BioFLAME to simulate the location and transportation of feedstock, it is determined in this static modelling approach that the biorefinery could sell their SAF at $$6.37 to $6.68 per gallon with a rate of return of 12.2% on their investment.  If the wood qualified for RINs, the price would be reduced to $4.59 to $4.78 per gallon assuming D3 RIN price of $1.22 per gallon and an EV factor of 1.7. 
  • The economic analysis demonstrates, using GFT, to be feasible, the airlines will need to purchase the fuel at a price higher than current levels of aviation fuel or additional subsidies will be required in order to incentivize production.
  • Regional impacts do occur.  It is estimated that the increase in supply chain expenditures would lead to an annual increase of $600 million through direct expenditures and $1.06 billion after the multiplier affect is occurs. 
  • In addition, the investment in three biorefineries of $1.7 billion leads to a regional impact of $2.06 billion.
  • The analysis assumes that no additional investment will be required in the logging industry or the transportation industry.