Biomass Supply Chain Risk: Towards a Better Understanding of Feedstock Availability, Cost, Variability, and Uncertainty to Catalyze and De-risk Biobased Investment

For biomass to emerge as a sustainable alternative source of energy, feedstock supply chains must be shown to be cost-competitive, reliable, and resilient. Bioenergy production at industrial scale requires large amounts of biomass meeting consistent volumes, quality, and cost. A wide variety of resources are available including energy crops, agricultural and forest residues, and municipal wastes to meet these volume demands; however, within the same resource, differences in geographies, climates, harvesting and storage techniques, size reduction practices, and transportation logistics result in major differences in key characteristics for energy production and contribute to feedstock supply chain risk. The risks that affect feedstock supply chains must be clearly understood and accurately quantified and mitigative steps to overcome or minimize the impacts of these risks must be put in place. Failures of several bioenergy ventures in the last couple of decades have highlighted the importance of clarifying the complex risk factors in feedstock supply chains. This chapter discusses the development of the Biomass Supply Chain Risk (BSCR) Standards, an industry standard for evaluating supply chain risk. The development of a risk scoring and rating methodology, using the BSCR Standards, is also presented along with a summary of case studies demonstrating the BSCR Standards and associated ratings applied in practice to highlight capital market/investor perception of project risk. The BSCR Standards and rating methodologies are also demonstrated in supporting the development of a regional “bio-manufacturing readiness” assessment tool called Bioeconomy Development Opportunity (BDO) Zone Ratings. This chapter is intended to serve as a guide to biobased project developers, investors, capital markets, governments, and other stakeholders to understand risks associated with biomass supply chains; the status of risk assessment methods currently available, in practice; and the importance of mitigation of these risks to catalyze development of the global bioeconomy.