UTIA Family, please refer utk.edu/coronavirus for the latest updates and student information. For UTIA-specific resources, please visit utia.tennessee.edu/coronavirus .

Appalachia SAF from Hardwood : 725_50

Biorefinery Size 725,000 tons per year and distance from a logging road is less than 1 mile​.

Two biorefineries could be located in the Central Appalachia area

  • The biorefineries are located at
    • Surry, NC
    • Greene, TN
  • Total feedstock cost delivered to biorefineries — $97.3 million with an average delivered cost of $73/ton
  • Average per ton-mile distance from field to biorefinery facility is 78.0 miles each ton of hardwood travels.
Map showing locations for five biorefineries in the Central Appalachia area. Locations of biorefineries are Surry, North Carolina and Greene, TN.
Legend for map of locations of two biorefineries located in Central Appalachia area.

Biorefinery Cost of Feedstock

CountyStateQuantity Forest residuesTotal CostTransportationAverage DistanceTotal Feedstock Cost
short dry tonsdollarston milesmiles/tondollars/ton
SurryNC725,267$43,133,96446,154,34463.6$65.54
GreeneTN724,885$54,138,48066,937,23492.3$82.30
Total/Average1,450,152$97,272,444113,091,57878.0$73.92

BEA Regions

BEA Regions

Quantity of Forest Residues Supplied to the Biorefineries by BEA region

BEASurryGreeneTotal
Tons
1078,491153,039231,529
2934,81010,02844,838
3167,95829,89697,854
66343,270343,270
681,109115,526116,635
8120,132133,325153,457
88214,463214,463
9456,16456,164
11612,44512,445
138179,496179,496
Total725,267724,8851,450,152

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

BEASurryGreeneTotal
Dollars
10$5,259,246$10,384,914$15,644,160
29$2,392,555$870,049$3,262,604
31$4,487,426$2,650,073$7,137,499
66$18,693,823$18,693,823
68$80,181$8,879,189$8,959,370
81$1,345,665$9,153,332$10,498,997
88$16,216,596$16,216,596
94$4,977,877$4,977,877
116$1,006,450$1,006,450
138$10,875,068$10,875,068
Total$43,133,964$54,138,480$97,272,444

Cost to Transport forest residues to biorefinery

BEASurryGreeneTotal
Dollars
10$2,029,210$4,212,953$6,242,164
29$731,098$199,344$930,442
31$1,877,927$875,244$2,753,171
66$9,072,755$9,072,755
68$23,642$3,018,600$3,042,242
81$492,566$3,927,670$4,420,237
88$6,606,733$6,606,733
94$1,690,004$1,690,004
116$319,847$319,847
138$4,370,068$4,370,068
Total$18,597,267$20,850,396$39,447,662

Average miles a ton of feedstock travelled

BEASurryGreeneTotal
ton-miles/ton
10888082
29121190136
317413592
664343
68135118118
81946771
888181
94128128
116132132
1387474
Total649278

Biorefinery Information

  • Biorefinery capacity is measured by feedstock input
  • In this analysis, biorefinery input was 725,000 dry tons per year
  • Assuming a Gasification Fischer Tropsch biorefinery with expected production in terms of  
    • Sustainable Aviation Fuel – 40%
    • Diesel – 40%
    • Naphtha – 20%
  • 1,450,000 wet tons dried 10% moisture content
  • Working 330 days/year and 10 hours/day, 21-22 trucks must be emptied every hour or 1 truck every 2.7 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 19 to 20 trucks per hour. 

The biorefineries

Each with a capacity of 725,000 dry short tons or 657,000 dry MT per year

  • Two biorefineries were located.
    • Surry, NC
    • Greene, TN
  • Each producing
    • SAF – 16.7 million gallons
    • Diesel – 14.3 million gallons
    • Naphtha – 8.3 million gallons
  • Gross Revenues
    • Fuel – $343 million
    • RINS — $141 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 — $4.32/gallon
    • Diesel – $4.59/gallon
    • Naphtha – $3.88/gallon

Biorefinery Operations

Biorefinery Investment and Operating

SAF Prices
CountyStateBEA Investment (CAPEX)Operating (OPEX)No IncentivesWith RIN Incentive
Million $$ per gallon
SurryNC66$703$142$6.04$4.32
GreeneTN81$706$153$6.35$4.63
Total/Average$1,409$296$6.19$4.48

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 42%; Feedstock 30%; 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.

FCI=Fixed Capital Investment


Economic Impact of Investment to the Central Appalachian Region if the five Biorefineries Are Established

  • With an investment of $1.4 billion, more than $1.0 billion is spent in the region
  • This results $1.78 billion in total TIO resulting in a multiplier of 1.68. For every million dollars spent, an additional $0.68 million is generated in the regional economy.
  • This results in an increase in Gross Regional Product of $850 million.
  • Employment increases also.
  • Over 12,200 jobs are created during the construction period of these biorefineries.
  • Resulting in $660 million in labor income when incorporating the multiplier effect.

Total Industrial Output (TIO Million 2021$)

TypeDirectIndirectInducedTotal
GFTv5234.471.880.6386.7
Salary GFTv560.00.058.5118.5
Logging18.95.310.834.9
Proprietor Income, RINs and Salaries197.80.0151.6349.4
Transportation37.716.115.869.6
   Total548.893.2317.2959.2

Employment (Number of Jobs)

TypeDirectIndirectInducedTotal
Operating GFTv51104025861,098
Salary GFTv500425425
Logging2218477382
Proprietor Income, RINs and Salaries0.00.01,099.01,099.0
Transportation358108113578
   Total6895942,3003,583

Gross Regional Product (GRP Million 2021$)

TypeDirectIndirectInducedTotal
Operating GFTv5128.534.444.3207.3
Salary GFTv560.00.032.092.0
Logging11.63.26.020.9
Labor197.80.083.7281.5
Transportation20.87.88.937.4
   Total418.845.4174.9639.1

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 $6.04 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 $4.48 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 reduce the manufacturing cost. 
  • Regional impacts do occur.  It is estimated that the increase in supply chain expenditures would lead to an increase of $549 million through direct expenditures and 959 million after the multiplier affect is measured annually. 
  • In addition, the investment in two biorefineries of $1.05 billion leads to a regional impact of $1.78 billion.
  • The analysis assumes that no additional investment will be required in the logging industry  or the transportation industry.