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Fossil energy, environmental and cost performance of ethanol in Thailand
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Journal of Cleaner Production 16 (2008) 1814e1821 www.elsevier.com/locate/jclepro
Fossil energy, environmental and cost performance of ethanol in Thailand Thu Lan T. Nguyen, Shabbir H. Gheewala* The Joint Graduate School of Energy and Environment, King Mongkut’s University of Technology Thonburi, Bangkok 10140, Thailand Received 11 December 2007; accepted 13 December 2007 Available online 31 January 2008
Abstract This study aims to perform a life cycle analysis of the environmental benefits and limitations of using ethanol as an alternative transportation fuel in Thailand. In particular, the analysis compares the life cycle fossil energy use, air emissions and social costs of cassava-based gasohol E10 with those of gasoline. The results of the study show that, along its whole life cycle, E10 consumes less fossil oil (6.3%) and produces lesser amounts of CO2 (6.4%), CH4 (6.2%), CO (15.4%) and NOx (15.8%) than CG. Including externalities substantially changes the cost performance in favor of ethanol. After environmental costs are added, the cost of E10 and of gasoline become equal to each other whilst before that, E10 is more costly. Ó 2007 Elsevier Ltd. All rights reserved. Keywords: Life cycle assessment; Cassava-based gasohol; Cost performance; Thailand
1. Introduction Thailand’s total energy consumption has been rising in a dramatic manner since the 1980s. Strong economic growth and rapid industrialization are considered both the cause and effect of large expansion in energy consumption. Lacking an abundant supply of domestic fossil-based energy resources, Thailand is obligated to import a large amount of crude oil to meet domestic demand. Not only does oil consumption cost the country a huge amount of foreign currency, arising with it is a concern about environmental quality. Apart from a rise in GHG emissions which contribute to global warming, increased level of air pollution adversely affects public and ecosystem health. The transportation sector relies almost exclusively on fossil oil (mostly gasoline and diesel) and this scenario is unlikely to change significantly in some 10 years ahead. Besides its impact on fossil energy use, the sector is also responsible for
* Corresponding author. Tel.: þ662 4708309; fax: þ662 8729805. E-mail address: [email protected] (S.H. Gheewala). 0959-6526/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.jclepro.2007.12.009
the emissions of CO2 and other air pollutants. In this context, bio-ethanol has emerged as an alternative fuel in those countries where biomass feedstock is abundant. Ethanol is generally considered a cleaner fuel than gasoline in the sense that using it can help reduce tailpipe emissions of certain air pollutants. Actually, the main reason for the renewed interest in ethanol is its potential to ease oil import burden and lessen the greenhouse effect. What is more, ethanol used in the form of blends in gasoline can improve the quality of gasoline by increasing the octane level. However, one of the concerns arising with an increased use of ethanol is its relatively high price over gasoline in either pure or blended form. In Thailand, the ex-refinery price of gasohol (10% ethanol blend in gasoline) in the first half of 2007 is about THB 0.1eTHB 1.3 (1 Euro ¼ 44 THB) higher than that of 95 octane gasoline [1,2]. If a difference in fuel economy between gasohol and gasoline is counted, the price gap becomes larger. In fact, such a cost comparison is not a true reflection of the various benefits of ethanol such as fossil energy savings, GHG and other air pollutant reductions and octane enhancement. To address the issue, Nguyen et al. [3] have assessed GHG abatement cost of cassava utilization for fuel ethanol in Thailand.
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Nomenclature CE CG EPS
cassava ethanol conventional gasoline Environmental Priority Strategies in product design ERTh Eastern region of Thailand FU functional unit GDP gross domestic product GHG greenhouse gas GREET Greenhouse gases, Regulated Emissions, and Energy use in Transportation LCA life cycle assessment LCI life cycle inventory ML million litres PPP purchasing power parity THB Thai Baht ULG Unleaded gasoline WTP Willingness to Pay However, what they found from accounting only for savings from GHG reduction was that gasoline is still cheaper than ethanol. Thus, it remains to be evaluated whether including other external benefits can change the cost performance in favor of ethanol. The objective of this study is to perform an assessment of energy, environmental and cost performance of ethanol in Thailand, using a life cycle approach. The analysis compares the life cycle fossil energy use, air emissions and cost of cassava-based ethanol (CE) in the form of E10 with those of conventional gasoline (CG). The cost performance of E10 relative to CG is assessed based on an estimate of social costs which are the sum of production costs and external environmental costs [4]. The factors used to convert air emissions and fossil oil consumption into monetary values are adapted from EPS (Environmental Priority Strategies in product design) model. 2. Methodology 2.1. Life cycle assessment 2.1.1. Ethanol fuel, functional unit and assessment parameters In Thailand, the crops having high potential for feeding the ethanol fuel industry include both sugar and starch crops. At present, the 10% ethanol in gasohol available at the Thai gas stations is mainly a fermentation product of molasses. However, the main use of molasses is for liquor and animal feed industry. A surplus 30% of the annual production of Thai molasses (about one million tonnes) [5] would not meet the government target of 5.3 million litres (ML) of ethanol per day [6]. Furthermore, seasonal availability adds one more disadvantage inducing the country to seek for a more suitable source of raw material. Coming out to be good in terms of supply availability as well as potentially low raw material cost [3],
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cassava is given priority over molasses in utilization for fuel ethanol. To demonstrate the feasibility of feedstock conversion to ethanol on a commercial scale, a research team in Cassava and Starch Technology Research Unit (CSTRU), Bangkok, Thailand has conducted research on pilot-scale production of ethanol from cassava applying advanced techniques in both biochemical and chemical engineering [7]. The functional unit (FU) chosen is the distance traveled by vehicles’ fuel tank full of CG (50 L). To display the results per FU, it is necessary to know vehicle fuel economy of cars fueled with CG and cars fueled with gasohol E10. The information is available at http://www.pttplc.com [8]. Deriving functional unit based on fuel economy rather than energy content, the assessment takes into account the octane enhancement effect of ethanol in its blend. Although ethanol has lower energy content than CG, its higher octane value results in higher compression ratios and consequently more efficient thermodynamic operation in internal combustion engines [9]. To investigate life cycle energy, environmental, and cost performance of ethanol, the following assessment parameters were considered. (a) Energy use: the energy benefits of fuel ethanol were assessed based on its life cycle fossil energy and petroleum use compared with CG. (b) Air emissions: there is scientific proof that substituting ethanol for CG could provide from moderate to substantial reduction in GHG emissions [10e12]. Regarding impacts on criteria pollutant emissions, in general, ethanol is considered cleaner than CG when burned. Peer-reviewed and technical literature show that ethanol in CG generally produces lower tailpipe emissions of CO, SO2 and PM [13e 16]. Adding ethanol to CG, however, may lead to higher level of evaporative VOC [17,18]. Emissions of NOx have been found to be lesser in some circumstances but larger in others [14,16,17]. Note that with a life cycle approach, both direct emissions from vehicles and those associated with other segments of the fuel life cycle are taken into account. Upstream emissions of some air pollutants may offset downstream emission benefits. (c) Cost performance: as recommended in Ref. [3], a fair comparison between gasohol and gasoline should be based on their ex-refinery prices rather than retail prices (pump prices). In the first six months of 2007, the ex-refinery prices for gasohol and 95 octane gasoline (ULG 95) in Thailand were around THB 17.9 and THB 17.4 a litre on average [1,2], giving a price gap of THB 0.5. However, if the difference in fuel economy between CG car and E10 car is taken into account, the gap increases to THB 0.7. Such price picture fails to reflect the external benefits of ethanol, i.e., benefits not included in its market price and thus not paid for by customers [19]. There is a need of some assessment technique/hypothesis to convert the amount of resource consumption and air pollutant emissions into a common unit, e.g. monetary value. Various research studies [20e22] have tried to quantify these benefits in monetary terms but the task seems not an easy one.
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In this study, external environmental costs of gasohol and gasoline were estimated based on EPS 2000 (Environmental Priority Strategies in product design, version 2000) [23]. The EPS system, based on LCA methodology, was developed to assist product designers and developers in comparing one product to another to find out which one has lesser impacts on the environment. The main advantages of the model over the others are its simplicity and flexibility. The model provides a list of the external costs for air pollutants of environmental concern as well as resource consumption. With Thailand, a net oil importer, the depletion of the world’s oil reserves is considered a major problem significantly affecting national energy security goals. Thus, external costs for fossil oil use in addition to air emissions were considered in this study. The EPS model as a tool for external cost estimates was developed in Sweden. The hypothesis in adaptation of the model to Thailand is that the Willingness to Pay (WTP) is proportional to the per capita income (GDP expressed in terms of Purchasing Power Parity) [24]. The equation to estimate WTP for Thailand is expressed as follows. WTPThailand ¼ WTPSweden PERCAP-GDPðPPPÞThailand = PERCAP-GDPðPPPÞSweden where PERCAP-GDP(PPP)Thailand ¼ USD 9,100 [25] and PERCAP-GDP(PPP)Sweden ¼ USD 31,600 [25]. The ratio WTPThailand/WTPSweden or ‘‘Income elasticity of WTP’’ is thus derived as 0.288. Table 1 lists the external costs for air pollutants and fossil oil consumption, in both EUR/kg as original costs from EPS model and THB equivalent/kg after adjustment for Thailand. 2.1.2. Projection scenarios The process energy in ethanol conversion can be derived either from fossil fuels or from biomass. In Thailand, the government has a policy promoting the use of biomass resources which are abundant in the country to substitute fossil fuel based resources. Three scenarios concerned with process energy sources in ethanol conversion stage have been examined (Table 2). The first scenario is based on the assumption that the energy used to drive the ethanol conversion process is derived only from fossil sources, e.g. fuel oil. The second reflects the base case analysis of the CE pilot plant; process energy source comprises its co-product (biogas) and fuel oil. The third one assumes that the plant’s energy demand is met by using biogas and biomass e.g. rice husk as an external energy source.
Table 2 Scenarios of cassava fuel ethanol study Case
Process energy source
Scenario 1: E10-a Scenario 2 (base case): E10-b Scenario 3: E10-c
Fuel oil Biogas and fuel oil Biogas and rice husk
2.2. Inventory analysis The LCI of CE production in Thailand has been conducted by Nguyen et al. [27]. Data were collected from a variety of sources, e.g., on-site interviews, domestic research reports, peer-reviewed journals, and government publications, as specified in Fig. 1. Basic information about direct inputs in the system e.g. materials, fuels, labor can be found in Ref. [27]. Data processing to convert fuel use, chemical use, labor use to primary energy consumption was done using well-known models, conceptual guidelines and databases. Also emissions from each stage in the fuel cycle were estimated mainly from GREET [28] unless specified otherwise. Energy content value of CG was obtained from the LCI study of oil refineries in Thailand [29]. Input efficiency coefficient of the fuel available from the Institute of Food and Agricultural Sciences, University of Florida [30], were then used to estimate energy consumption in CG manufacturing. Data on major emission characteristics of cars running on CG and E10 were provided by PTT [8] whereas information on emissions from the production of CG is available elsewhere [28]. To assess how efficient a crop-based ethanol production system is in terms of energy production and further compare with those in other countries with different levels of mechanization, it was recommended that human labor input be considered [43]. The estimation procedure for the energy value of Thai farm workers and environmental impacts associated with that amount of energy consumed to support labor work is given in Refs. [27,38]. In the context of lacking a generally acceptable accounting method, this study provides the results without human labor but includes a sensitivity analysis to see how the results would change if labor is included. 2.3. Key assumptions The Thai government has approved the construction of 12 CE plants with a total output of 3.4 ML per day within the next two to three years, 2007 through 2009 [6]. Of this total output, 1.6 ML would be contributed by three CE plants located in the Eastern Region of the country (ERTh). Assumptions about transport activities related to ethanol, e.g.,
Table 1 Environmental costs per unit of pollutants and fossil oil use External cost
CO2
CH4
N2O
CO
NO2
SO2
VOC
PM10
Fossil oil
EUR/kg THB/kg
0.108 1.4
2.72 34.5
38.3 485.0
0.33 4.2
2.13 27.0
3.30 41.9
2.14 27.1
36.1 457.2
0.507 6.4
Average exchange rate for the first six months of 2007: 1 EUR ¼ 44 THB [26].
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Lifestyle support human labor [27, 38] (stem cuttings preparation, planting, crop maintenance, harvesting, loading, chip packing)
Organic fertilizer (Chicken manure) preparation manure
Agrochemical manufacturing [28, 31] N fertilizer use (N2O emissions) [32, 33]
Transportation [on-site data, 41]
Diesel production and use [28-30]
NPK fertilizers, herbicides Cassava cultivation [on-site data, 34, 35] stem cuttings cassava roots Cassava processing [36, 37]
Chemical (CaCl2, NaOH, H2SO4, enzymes) manufacturing
electricity
chemicals
(steam generation [42])
Electricity production [39, 40]
Fuel oil production and use [28-30]
cassava chips Ethanol conversion [7] Milling, Liquefaction, Saccharification and Fermentation, Distillation/Dehydration Stillage treatment
biogas
fuel oil
ethanol Gasoline production [28-30]
gasoline
Gasohol E10
Legend:
gasohol Transportation Combustion in Vehicles [8, 28, 29]
[]
data source
Fig. 1. System boundary and data sources for cassava-based gasohol (E10-b) life cycle.
transport of cassava chips to ethanol factories, transport of ethanol to oil refineries and transport of gasohol to gas stations, were made for three approved CE plants in the ERTh. These are shown in Table 3.
3. Results and discussions 3.1. Life cycle energy and emissions per functional unit (FU) The LCA results for E10 and CG are presented in Table 4. Change represents impacts of substituting the fuel alternative for CG. Negative change implies a reduction, whereas positive change denotes an increase in energy use and emissions compared to CG. The table shows clear advantage of using cassava-based E10 as a fuel for transportation over CG in terms of reductions in fossil energy use and petroleum use. The reduction mainly results from the absence of fossil-based energy consumption in the combustion of 10% ethanol in gasohol. Since E10 contains only 10% of ethanol, the magnitude of the reduction in energy use as seen is relatively small. However, the absolute values would become significant when the total amount of cassavabased gasohol output (3.4 ML of CE/0.1 ¼ 34 ML of gasohol per day) is considered. Promoting cassava-based ethanol in
Thailand would help to reduce national fossil fuels and petroleum consumption, and hence improve energy security. Also from Table 4, it can be seen that CE in the form of E10-b, along its whole life cycle, can provide reduction in some air pollutant emissions, e.g., CO2 (6.4%), CH4 (6.2%), CO (15.4%) and NOx (15.8%) compared to CG. However, E10 leads to increased emissions of N2O (25.9%), SO2 (16.9%), VOC (7.6%) and PM10 (2.4%). Thus, it seems that E10 is ‘‘half favorable’’; in some parameters examined, it is better but in others, it is worse than CG. Substitution of biomass for fuel oil to generate process steam in ethanol conversion process helps to improve the overall gasohol life cycle energy use and emissions of almost all air pollutants except N2O and CO.
Table 3 Assumptions about transportation activities in cassava-based gasohol system Type of materials, products
Transport mode
Capacity (tonnes)
Average distance (km)
Cassava chips from drying floor to CE plant Ethanol from factories to oil refineries Gasohol from oil refineries to gas stations
Diesel truck
15e20
100
Diesel truck
10e12
150
Diesel truck
10e12
180
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Table 4 Life cycle fossil energy use and emissions summary for gasohol E10 and gasoline per FU Environmental category
Units
CG
E10-a
E10-b (base case)
Fossil energy use Petroleum use Emissions CO2 CH4 N2O CO NOx SO2 VOC PM10
MJ MJ
1929.37 1741.71
1828.46 1651.00
5.2 5.2
1811.01 1632.71
6.1 6.3
1778.99 1600.69
7.8 8.1
kg g g g g g g g
143.78 171.86 5.96 828.24 174.84 40.95 144.32 24.01
135.88 162.45 7.18 700.13 148.61 50.49 155.29 25.21
5.5 5.5 þ20.5 15.5 13.9 þ23.3 þ7.6 þ5.0
134.62 161.16 7.50 700.29 147.21 47.85 155.27 24.58
6.4 6.2 þ25.9 15.4 15.8 þ16.9 þ7.6 þ2.4
132.31 158.80 7.80 701.78 145.30 42.44 155.14 23.71
8.0 7.6 þ31.0 15.3 16.9 þ3.6 þ7.5 1.2
% Change
3.2. Sensitivity analysis for human labor inclusion in the assessment The results of the sensitivity analysis done for E10 with human labor accounting (termed E10-bhl) versus the base cases without human labor E10-b are shown in Fig. 2. For a comparison purpose only, all corresponding results are graphically displayed as percentages relative to gasoline. As seen, an inclusion of human labor input in the assessment increases the environmental loads assigned to E10-bhl compared to E10-b. The magnitude of the increase is in the order of 0.2% for petroleum use to 2.8% for SO2 emissions. However, the relative advantages or disadvantages of the blend with respect to CG are not reversed when human labor is included. 3.3. External environmental costs What has been done so far to assess energy and environmental performance of ethanol in the form of gasohol seems inadequate to inform policy makers whether a substitution of the fuel for CG is beneficial. Further assessment of the cost performance of E10 fuels (E10-a, E10-b and E10-c) relative
CG
E10-c
% Change
to gasoline is now performed based on an estimate of social costs. The inventory results for E10 fuels and CG (Table 4) enable the analysis of externalities to be performed using the environmental costs per unit of air pollutants and fossil oil use (Table 1). The external environmental costs are then added to the exrefinery price of gasohol and gasoline to make the total social costs as presented in Table 5. Ex-refinery price of E10-b is taken directly from Refs. [1,2] and the value is used to estimate ex-refinery prices of E10-a and E10-c, given that data on price of rice husk and fuel oil are available elsewhere [44,45]. Clearly, an addition of fuel oil cost results in an excess cost of E10-a over E10-b. In contrast, a substitution of rice husk for fuel oil makes E10-c somehow cheaper than E10-b. As Table 5 shows, the environmental costs of E10-a,b,c are lower than those of CG. However, with E10-a, the lower external costs for both fossil oil use and air emissions cannot compensate for the higher direct production costs, though the price gap between the fuel and CG gets narrower. On the contrary, an addition of external costs to the ex-refinery prices of E10-b and especially E10-c makes their total social costs equal to those of CG. For both CG and E10 fuels, environmental
E10-b
E10-bhl
140% 120% 100% 80% 60% 40% 20%
PM 10
VO C
SO 2
N O x
C O
N 2O
C H 4
C O 2
le tro
Fo
Pe
il
en
er gy
um
us
us
e
e
0%
ss
% Change
Fig. 2. Effect of inclusion of human labor on the overall energy and environmental performance of E10.
T.L.T. Nguyen, S.H. Gheewala / Journal of Cleaner Production 16 (2008) 1814e1821
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Table 5 WTP for impacts from air emissions, fossil oil use and direct costs of gasohol and gasoline Cost item (THB/FU)
CG (ULG 95)
E10-a
Environmental costs Fossil oil use Air emissions Ex-refinery price Total social costs
471.0 240.8 230.2 869.5 1340.5
447.9 228.2 219.7 909.4 1357.3
E10-b (base case) % Change
% Change
4.9
443.4 225.7 217.7 903.2 1346.6
þ4.6 þ2.3
costs contribute about 33e35% of the total social costs; fossil oil use and air emissions having an almost an equal share. Further segregation of environmental costs for air emissions shows that CO2 is the most dominant contributor whereas other air pollutants make a relatively minor contribution (see Fig. 3). The main message from this externality analysis is that many benefits of ethanol are not reflected in price. EPS is one of the many different valuation models. Varying results are most expected to come out with other valuation models. In addition, potential benefits of biofuels in reducing emissions and fossil oil use are just two besides other benefits that also need to be quantified and included in such a cost/ benefit analysis. Some of the importance can be listed as: (1) saving foreign currency through reduced oil import, (2) strengthening self-reliance through reducing foreign debt and debt service burden, (3) encouraging agricultural expansion and promoting domestic markets for agricultural commodities, (4) creating rural employment and improving farm income [46].
Others 14.6%
Others 15.4%
7.6
þ3.9 þ0.5
þ2.9 0.8
The results of the study demonstrate that using cassavabased E10 substituting for conventional gasoline leads to the following benefits/limitations. 1. Reducing fossil energy (6.1%) and petroleum use (6.3%). As far as an independence from imported oil is of concern, reduction in petroleum use is highlighted. 2. Reducing emissions of CO2 (6.4%), CH4 (6.2%), CO (15.4%) and NOx (15.8%) but increasing emissions of N2O (25.9%), SO2 (16.9%), VOC (7.6%) and PM10 (2.4%). 3. Generating lower environmental costs (5.9%). It is worth noting that the ex-refinery price of E10 is higher than that of ULG 95 (3.9%), but it is almost compensated by the lower external environmental costs. From the scenario analysis, it is shown that the substitution of biomass for fossil fuel as the main process energy source in
CH4 17.6% N2O 8.6% CO 10.3% NOx CO2 14.0% 84.6% SO2 5.1% VOC 11.6% PM10 32.7%
CH4 16.6% N2O 10.8% CO 8.8% NOx 11.8% SO2 6.0% VOC 12.5% PM10 33.5%
% Change 435.2 221.3 213.9 894.4 1329.6
gasohol E10-a
gasohol E10-b
CO2 84.6%
5.9
4. Conclusions
gasoline
CO2 85.4%
E10-c
Others 15.4%
CH4 16.5% N2O 10.3% CO 8.7% NOx 11.8% SO2 6.2% VOC 12.4% PM10 34.0%
gasohol E10-c
CO2 84.6%
Fig. 3. Breakdown of external emission costs for gasoline and E10 fuels.
Others 15.4%
CH4 16.6% N2O 11.5% CO 8.9% NOx 11.9% SO2 5.4% VOC 12.8% PM10 32.9%
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ethanol conversion mostly improves the fuel’s life cycle energy, environmental and cost performance.
Acknowledgments The authors would like to express their appreciation to farmers in the eastern region of Thailand for their collaboration in providing data on cassava farming. Thanks are also given to the research team in Cassava and Starch Technology Research Unit (CSTRU), Bangkok, Thailand as another important data provider. The financial support from the Joint Graduate School of Energy and Environment, King Mongkut’s University of Technology Thonburi is highly acknowledged.
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T.L.T. Nguyen, S.H. Gheewala / Journal of Cleaner Production 16 (2008) 1814e1821 [36] Sriroth K, Ronjnaridpiched C, Vichukit V, Suriyapan P, Oates CG. Present situation and future potential of cassava in Thailand. Cassava’s potential in Asia in the 21st Century: present situation and future research and development needs. Proceedings 6th regional workshop, Ho Chi Minh, Vietnam, 21e25 February 2000. [37] Witriyatornpan W (Cassava chip processing manager). Lanmanchairuangkit factory, 65/1 Moo 2, T. Nonpredoo, A. Laokwan, Kanchanaburi province. Personal interview; 13 March 2006. [38] Nguyen TLT, Gheewala SH. Life cycle assessment of fuel ethanol from cassava in Thailand. International Journal of Life Cycle Assessment, in press. [39] DEDE (The Department of Alternative Energy Development and Efficiency). Thailand energy statistics 2004. Bangkok, Thailand; 2004. http://www2.dede.go.th/dede/report/TES2004.pdf. [40] Lohsomboon P, Jirajariyavech A. Thailand e final report for the project on life cycle assessment for Asian countries e Phase III, business and environment program. Thailand Environment Institute; February 2003.
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[41] Rayong Bulk Terminal Company Limited. A joint venture company of the National Chemical Fertilizer Public Co., Ltd, Map Ta Phut deep seaport, Rayong province. [42] DMU e NERI (National Environmental Research Institute, Denmark University). Emissions Factors; 2006. [43] Fluck RC. Energy of human labor. In: Fluck RC, editor. Energy in farm production. Energy in world agriculture, vol. 6. Amsterdam: Elsevier; 1992. p. 31e7. [44] Omori H. Economics of biomass boilers. Tokyo: Asian Productivity Organization (APO), http://www.apo-tokyo.org/biomassboiler/D1_downloads/ presentations/Omori/Omori_Part2_BiomassBoilerEconomics.pdf; July 2006. [45] EPPO (Energy Policy and Planning Office, Ministry of Energy, Thailand). Energy database, Table 8: retail prices of petroleum products in Bangkok. Monthly, http://www.eppo.go.th/info/price/P08.xls; 2007. [46] Goldemberg J, Johansson T, Reddy A, Williams R. Energy for a sustainable world. Wiley Eastern Limited; 1988. p. 250e251.
Journal of Cleaner Production 16 (2008) 1814e1821 www.elsevier.com/locate/jclepro
Fossil energy, environmental and cost performance of ethanol in Thailand Thu Lan T. Nguyen, Shabbir H. Gheewala* The Joint Graduate School of Energy and Environment, King Mongkut’s University of Technology Thonburi, Bangkok 10140, Thailand Received 11 December 2007; accepted 13 December 2007 Available online 31 January 2008
Abstract This study aims to perform a life cycle analysis of the environmental benefits and limitations of using ethanol as an alternative transportation fuel in Thailand. In particular, the analysis compares the life cycle fossil energy use, air emissions and social costs of cassava-based gasohol E10 with those of gasoline. The results of the study show that, along its whole life cycle, E10 consumes less fossil oil (6.3%) and produces lesser amounts of CO2 (6.4%), CH4 (6.2%), CO (15.4%) and NOx (15.8%) than CG. Including externalities substantially changes the cost performance in favor of ethanol. After environmental costs are added, the cost of E10 and of gasoline become equal to each other whilst before that, E10 is more costly. Ó 2007 Elsevier Ltd. All rights reserved. Keywords: Life cycle assessment; Cassava-based gasohol; Cost performance; Thailand
1. Introduction Thailand’s total energy consumption has been rising in a dramatic manner since the 1980s. Strong economic growth and rapid industrialization are considered both the cause and effect of large expansion in energy consumption. Lacking an abundant supply of domestic fossil-based energy resources, Thailand is obligated to import a large amount of crude oil to meet domestic demand. Not only does oil consumption cost the country a huge amount of foreign currency, arising with it is a concern about environmental quality. Apart from a rise in GHG emissions which contribute to global warming, increased level of air pollution adversely affects public and ecosystem health. The transportation sector relies almost exclusively on fossil oil (mostly gasoline and diesel) and this scenario is unlikely to change significantly in some 10 years ahead. Besides its impact on fossil energy use, the sector is also responsible for
* Corresponding author. Tel.: þ662 4708309; fax: þ662 8729805. E-mail address: [email protected] (S.H. Gheewala). 0959-6526/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.jclepro.2007.12.009
the emissions of CO2 and other air pollutants. In this context, bio-ethanol has emerged as an alternative fuel in those countries where biomass feedstock is abundant. Ethanol is generally considered a cleaner fuel than gasoline in the sense that using it can help reduce tailpipe emissions of certain air pollutants. Actually, the main reason for the renewed interest in ethanol is its potential to ease oil import burden and lessen the greenhouse effect. What is more, ethanol used in the form of blends in gasoline can improve the quality of gasoline by increasing the octane level. However, one of the concerns arising with an increased use of ethanol is its relatively high price over gasoline in either pure or blended form. In Thailand, the ex-refinery price of gasohol (10% ethanol blend in gasoline) in the first half of 2007 is about THB 0.1eTHB 1.3 (1 Euro ¼ 44 THB) higher than that of 95 octane gasoline [1,2]. If a difference in fuel economy between gasohol and gasoline is counted, the price gap becomes larger. In fact, such a cost comparison is not a true reflection of the various benefits of ethanol such as fossil energy savings, GHG and other air pollutant reductions and octane enhancement. To address the issue, Nguyen et al. [3] have assessed GHG abatement cost of cassava utilization for fuel ethanol in Thailand.
T.L.T. Nguyen, S.H. Gheewala / Journal of Cleaner Production 16 (2008) 1814e1821
Nomenclature CE CG EPS
cassava ethanol conventional gasoline Environmental Priority Strategies in product design ERTh Eastern region of Thailand FU functional unit GDP gross domestic product GHG greenhouse gas GREET Greenhouse gases, Regulated Emissions, and Energy use in Transportation LCA life cycle assessment LCI life cycle inventory ML million litres PPP purchasing power parity THB Thai Baht ULG Unleaded gasoline WTP Willingness to Pay However, what they found from accounting only for savings from GHG reduction was that gasoline is still cheaper than ethanol. Thus, it remains to be evaluated whether including other external benefits can change the cost performance in favor of ethanol. The objective of this study is to perform an assessment of energy, environmental and cost performance of ethanol in Thailand, using a life cycle approach. The analysis compares the life cycle fossil energy use, air emissions and cost of cassava-based ethanol (CE) in the form of E10 with those of conventional gasoline (CG). The cost performance of E10 relative to CG is assessed based on an estimate of social costs which are the sum of production costs and external environmental costs [4]. The factors used to convert air emissions and fossil oil consumption into monetary values are adapted from EPS (Environmental Priority Strategies in product design) model. 2. Methodology 2.1. Life cycle assessment 2.1.1. Ethanol fuel, functional unit and assessment parameters In Thailand, the crops having high potential for feeding the ethanol fuel industry include both sugar and starch crops. At present, the 10% ethanol in gasohol available at the Thai gas stations is mainly a fermentation product of molasses. However, the main use of molasses is for liquor and animal feed industry. A surplus 30% of the annual production of Thai molasses (about one million tonnes) [5] would not meet the government target of 5.3 million litres (ML) of ethanol per day [6]. Furthermore, seasonal availability adds one more disadvantage inducing the country to seek for a more suitable source of raw material. Coming out to be good in terms of supply availability as well as potentially low raw material cost [3],
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cassava is given priority over molasses in utilization for fuel ethanol. To demonstrate the feasibility of feedstock conversion to ethanol on a commercial scale, a research team in Cassava and Starch Technology Research Unit (CSTRU), Bangkok, Thailand has conducted research on pilot-scale production of ethanol from cassava applying advanced techniques in both biochemical and chemical engineering [7]. The functional unit (FU) chosen is the distance traveled by vehicles’ fuel tank full of CG (50 L). To display the results per FU, it is necessary to know vehicle fuel economy of cars fueled with CG and cars fueled with gasohol E10. The information is available at http://www.pttplc.com [8]. Deriving functional unit based on fuel economy rather than energy content, the assessment takes into account the octane enhancement effect of ethanol in its blend. Although ethanol has lower energy content than CG, its higher octane value results in higher compression ratios and consequently more efficient thermodynamic operation in internal combustion engines [9]. To investigate life cycle energy, environmental, and cost performance of ethanol, the following assessment parameters were considered. (a) Energy use: the energy benefits of fuel ethanol were assessed based on its life cycle fossil energy and petroleum use compared with CG. (b) Air emissions: there is scientific proof that substituting ethanol for CG could provide from moderate to substantial reduction in GHG emissions [10e12]. Regarding impacts on criteria pollutant emissions, in general, ethanol is considered cleaner than CG when burned. Peer-reviewed and technical literature show that ethanol in CG generally produces lower tailpipe emissions of CO, SO2 and PM [13e 16]. Adding ethanol to CG, however, may lead to higher level of evaporative VOC [17,18]. Emissions of NOx have been found to be lesser in some circumstances but larger in others [14,16,17]. Note that with a life cycle approach, both direct emissions from vehicles and those associated with other segments of the fuel life cycle are taken into account. Upstream emissions of some air pollutants may offset downstream emission benefits. (c) Cost performance: as recommended in Ref. [3], a fair comparison between gasohol and gasoline should be based on their ex-refinery prices rather than retail prices (pump prices). In the first six months of 2007, the ex-refinery prices for gasohol and 95 octane gasoline (ULG 95) in Thailand were around THB 17.9 and THB 17.4 a litre on average [1,2], giving a price gap of THB 0.5. However, if the difference in fuel economy between CG car and E10 car is taken into account, the gap increases to THB 0.7. Such price picture fails to reflect the external benefits of ethanol, i.e., benefits not included in its market price and thus not paid for by customers [19]. There is a need of some assessment technique/hypothesis to convert the amount of resource consumption and air pollutant emissions into a common unit, e.g. monetary value. Various research studies [20e22] have tried to quantify these benefits in monetary terms but the task seems not an easy one.
T.L.T. Nguyen, S.H. Gheewala / Journal of Cleaner Production 16 (2008) 1814e1821
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In this study, external environmental costs of gasohol and gasoline were estimated based on EPS 2000 (Environmental Priority Strategies in product design, version 2000) [23]. The EPS system, based on LCA methodology, was developed to assist product designers and developers in comparing one product to another to find out which one has lesser impacts on the environment. The main advantages of the model over the others are its simplicity and flexibility. The model provides a list of the external costs for air pollutants of environmental concern as well as resource consumption. With Thailand, a net oil importer, the depletion of the world’s oil reserves is considered a major problem significantly affecting national energy security goals. Thus, external costs for fossil oil use in addition to air emissions were considered in this study. The EPS model as a tool for external cost estimates was developed in Sweden. The hypothesis in adaptation of the model to Thailand is that the Willingness to Pay (WTP) is proportional to the per capita income (GDP expressed in terms of Purchasing Power Parity) [24]. The equation to estimate WTP for Thailand is expressed as follows. WTPThailand ¼ WTPSweden PERCAP-GDPðPPPÞThailand = PERCAP-GDPðPPPÞSweden where PERCAP-GDP(PPP)Thailand ¼ USD 9,100 [25] and PERCAP-GDP(PPP)Sweden ¼ USD 31,600 [25]. The ratio WTPThailand/WTPSweden or ‘‘Income elasticity of WTP’’ is thus derived as 0.288. Table 1 lists the external costs for air pollutants and fossil oil consumption, in both EUR/kg as original costs from EPS model and THB equivalent/kg after adjustment for Thailand. 2.1.2. Projection scenarios The process energy in ethanol conversion can be derived either from fossil fuels or from biomass. In Thailand, the government has a policy promoting the use of biomass resources which are abundant in the country to substitute fossil fuel based resources. Three scenarios concerned with process energy sources in ethanol conversion stage have been examined (Table 2). The first scenario is based on the assumption that the energy used to drive the ethanol conversion process is derived only from fossil sources, e.g. fuel oil. The second reflects the base case analysis of the CE pilot plant; process energy source comprises its co-product (biogas) and fuel oil. The third one assumes that the plant’s energy demand is met by using biogas and biomass e.g. rice husk as an external energy source.
Table 2 Scenarios of cassava fuel ethanol study Case
Process energy source
Scenario 1: E10-a Scenario 2 (base case): E10-b Scenario 3: E10-c
Fuel oil Biogas and fuel oil Biogas and rice husk
2.2. Inventory analysis The LCI of CE production in Thailand has been conducted by Nguyen et al. [27]. Data were collected from a variety of sources, e.g., on-site interviews, domestic research reports, peer-reviewed journals, and government publications, as specified in Fig. 1. Basic information about direct inputs in the system e.g. materials, fuels, labor can be found in Ref. [27]. Data processing to convert fuel use, chemical use, labor use to primary energy consumption was done using well-known models, conceptual guidelines and databases. Also emissions from each stage in the fuel cycle were estimated mainly from GREET [28] unless specified otherwise. Energy content value of CG was obtained from the LCI study of oil refineries in Thailand [29]. Input efficiency coefficient of the fuel available from the Institute of Food and Agricultural Sciences, University of Florida [30], were then used to estimate energy consumption in CG manufacturing. Data on major emission characteristics of cars running on CG and E10 were provided by PTT [8] whereas information on emissions from the production of CG is available elsewhere [28]. To assess how efficient a crop-based ethanol production system is in terms of energy production and further compare with those in other countries with different levels of mechanization, it was recommended that human labor input be considered [43]. The estimation procedure for the energy value of Thai farm workers and environmental impacts associated with that amount of energy consumed to support labor work is given in Refs. [27,38]. In the context of lacking a generally acceptable accounting method, this study provides the results without human labor but includes a sensitivity analysis to see how the results would change if labor is included. 2.3. Key assumptions The Thai government has approved the construction of 12 CE plants with a total output of 3.4 ML per day within the next two to three years, 2007 through 2009 [6]. Of this total output, 1.6 ML would be contributed by three CE plants located in the Eastern Region of the country (ERTh). Assumptions about transport activities related to ethanol, e.g.,
Table 1 Environmental costs per unit of pollutants and fossil oil use External cost
CO2
CH4
N2O
CO
NO2
SO2
VOC
PM10
Fossil oil
EUR/kg THB/kg
0.108 1.4
2.72 34.5
38.3 485.0
0.33 4.2
2.13 27.0
3.30 41.9
2.14 27.1
36.1 457.2
0.507 6.4
Average exchange rate for the first six months of 2007: 1 EUR ¼ 44 THB [26].
T.L.T. Nguyen, S.H. Gheewala / Journal of Cleaner Production 16 (2008) 1814e1821
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Lifestyle support human labor [27, 38] (stem cuttings preparation, planting, crop maintenance, harvesting, loading, chip packing)
Organic fertilizer (Chicken manure) preparation manure
Agrochemical manufacturing [28, 31] N fertilizer use (N2O emissions) [32, 33]
Transportation [on-site data, 41]
Diesel production and use [28-30]
NPK fertilizers, herbicides Cassava cultivation [on-site data, 34, 35] stem cuttings cassava roots Cassava processing [36, 37]
Chemical (CaCl2, NaOH, H2SO4, enzymes) manufacturing
electricity
chemicals
(steam generation [42])
Electricity production [39, 40]
Fuel oil production and use [28-30]
cassava chips Ethanol conversion [7] Milling, Liquefaction, Saccharification and Fermentation, Distillation/Dehydration Stillage treatment
biogas
fuel oil
ethanol Gasoline production [28-30]
gasoline
Gasohol E10
Legend:
gasohol Transportation Combustion in Vehicles [8, 28, 29]
[]
data source
Fig. 1. System boundary and data sources for cassava-based gasohol (E10-b) life cycle.
transport of cassava chips to ethanol factories, transport of ethanol to oil refineries and transport of gasohol to gas stations, were made for three approved CE plants in the ERTh. These are shown in Table 3.
3. Results and discussions 3.1. Life cycle energy and emissions per functional unit (FU) The LCA results for E10 and CG are presented in Table 4. Change represents impacts of substituting the fuel alternative for CG. Negative change implies a reduction, whereas positive change denotes an increase in energy use and emissions compared to CG. The table shows clear advantage of using cassava-based E10 as a fuel for transportation over CG in terms of reductions in fossil energy use and petroleum use. The reduction mainly results from the absence of fossil-based energy consumption in the combustion of 10% ethanol in gasohol. Since E10 contains only 10% of ethanol, the magnitude of the reduction in energy use as seen is relatively small. However, the absolute values would become significant when the total amount of cassavabased gasohol output (3.4 ML of CE/0.1 ¼ 34 ML of gasohol per day) is considered. Promoting cassava-based ethanol in
Thailand would help to reduce national fossil fuels and petroleum consumption, and hence improve energy security. Also from Table 4, it can be seen that CE in the form of E10-b, along its whole life cycle, can provide reduction in some air pollutant emissions, e.g., CO2 (6.4%), CH4 (6.2%), CO (15.4%) and NOx (15.8%) compared to CG. However, E10 leads to increased emissions of N2O (25.9%), SO2 (16.9%), VOC (7.6%) and PM10 (2.4%). Thus, it seems that E10 is ‘‘half favorable’’; in some parameters examined, it is better but in others, it is worse than CG. Substitution of biomass for fuel oil to generate process steam in ethanol conversion process helps to improve the overall gasohol life cycle energy use and emissions of almost all air pollutants except N2O and CO.
Table 3 Assumptions about transportation activities in cassava-based gasohol system Type of materials, products
Transport mode
Capacity (tonnes)
Average distance (km)
Cassava chips from drying floor to CE plant Ethanol from factories to oil refineries Gasohol from oil refineries to gas stations
Diesel truck
15e20
100
Diesel truck
10e12
150
Diesel truck
10e12
180
T.L.T. Nguyen, S.H. Gheewala / Journal of Cleaner Production 16 (2008) 1814e1821
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Table 4 Life cycle fossil energy use and emissions summary for gasohol E10 and gasoline per FU Environmental category
Units
CG
E10-a
E10-b (base case)
Fossil energy use Petroleum use Emissions CO2 CH4 N2O CO NOx SO2 VOC PM10
MJ MJ
1929.37 1741.71
1828.46 1651.00
5.2 5.2
1811.01 1632.71
6.1 6.3
1778.99 1600.69
7.8 8.1
kg g g g g g g g
143.78 171.86 5.96 828.24 174.84 40.95 144.32 24.01
135.88 162.45 7.18 700.13 148.61 50.49 155.29 25.21
5.5 5.5 þ20.5 15.5 13.9 þ23.3 þ7.6 þ5.0
134.62 161.16 7.50 700.29 147.21 47.85 155.27 24.58
6.4 6.2 þ25.9 15.4 15.8 þ16.9 þ7.6 þ2.4
132.31 158.80 7.80 701.78 145.30 42.44 155.14 23.71
8.0 7.6 þ31.0 15.3 16.9 þ3.6 þ7.5 1.2
% Change
3.2. Sensitivity analysis for human labor inclusion in the assessment The results of the sensitivity analysis done for E10 with human labor accounting (termed E10-bhl) versus the base cases without human labor E10-b are shown in Fig. 2. For a comparison purpose only, all corresponding results are graphically displayed as percentages relative to gasoline. As seen, an inclusion of human labor input in the assessment increases the environmental loads assigned to E10-bhl compared to E10-b. The magnitude of the increase is in the order of 0.2% for petroleum use to 2.8% for SO2 emissions. However, the relative advantages or disadvantages of the blend with respect to CG are not reversed when human labor is included. 3.3. External environmental costs What has been done so far to assess energy and environmental performance of ethanol in the form of gasohol seems inadequate to inform policy makers whether a substitution of the fuel for CG is beneficial. Further assessment of the cost performance of E10 fuels (E10-a, E10-b and E10-c) relative
CG
E10-c
% Change
to gasoline is now performed based on an estimate of social costs. The inventory results for E10 fuels and CG (Table 4) enable the analysis of externalities to be performed using the environmental costs per unit of air pollutants and fossil oil use (Table 1). The external environmental costs are then added to the exrefinery price of gasohol and gasoline to make the total social costs as presented in Table 5. Ex-refinery price of E10-b is taken directly from Refs. [1,2] and the value is used to estimate ex-refinery prices of E10-a and E10-c, given that data on price of rice husk and fuel oil are available elsewhere [44,45]. Clearly, an addition of fuel oil cost results in an excess cost of E10-a over E10-b. In contrast, a substitution of rice husk for fuel oil makes E10-c somehow cheaper than E10-b. As Table 5 shows, the environmental costs of E10-a,b,c are lower than those of CG. However, with E10-a, the lower external costs for both fossil oil use and air emissions cannot compensate for the higher direct production costs, though the price gap between the fuel and CG gets narrower. On the contrary, an addition of external costs to the ex-refinery prices of E10-b and especially E10-c makes their total social costs equal to those of CG. For both CG and E10 fuels, environmental
E10-b
E10-bhl
140% 120% 100% 80% 60% 40% 20%
PM 10
VO C
SO 2
N O x
C O
N 2O
C H 4
C O 2
le tro
Fo
Pe
il
en
er gy
um
us
us
e
e
0%
ss
% Change
Fig. 2. Effect of inclusion of human labor on the overall energy and environmental performance of E10.
T.L.T. Nguyen, S.H. Gheewala / Journal of Cleaner Production 16 (2008) 1814e1821
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Table 5 WTP for impacts from air emissions, fossil oil use and direct costs of gasohol and gasoline Cost item (THB/FU)
CG (ULG 95)
E10-a
Environmental costs Fossil oil use Air emissions Ex-refinery price Total social costs
471.0 240.8 230.2 869.5 1340.5
447.9 228.2 219.7 909.4 1357.3
E10-b (base case) % Change
% Change
4.9
443.4 225.7 217.7 903.2 1346.6
þ4.6 þ2.3
costs contribute about 33e35% of the total social costs; fossil oil use and air emissions having an almost an equal share. Further segregation of environmental costs for air emissions shows that CO2 is the most dominant contributor whereas other air pollutants make a relatively minor contribution (see Fig. 3). The main message from this externality analysis is that many benefits of ethanol are not reflected in price. EPS is one of the many different valuation models. Varying results are most expected to come out with other valuation models. In addition, potential benefits of biofuels in reducing emissions and fossil oil use are just two besides other benefits that also need to be quantified and included in such a cost/ benefit analysis. Some of the importance can be listed as: (1) saving foreign currency through reduced oil import, (2) strengthening self-reliance through reducing foreign debt and debt service burden, (3) encouraging agricultural expansion and promoting domestic markets for agricultural commodities, (4) creating rural employment and improving farm income [46].
Others 14.6%
Others 15.4%
7.6
þ3.9 þ0.5
þ2.9 0.8
The results of the study demonstrate that using cassavabased E10 substituting for conventional gasoline leads to the following benefits/limitations. 1. Reducing fossil energy (6.1%) and petroleum use (6.3%). As far as an independence from imported oil is of concern, reduction in petroleum use is highlighted. 2. Reducing emissions of CO2 (6.4%), CH4 (6.2%), CO (15.4%) and NOx (15.8%) but increasing emissions of N2O (25.9%), SO2 (16.9%), VOC (7.6%) and PM10 (2.4%). 3. Generating lower environmental costs (5.9%). It is worth noting that the ex-refinery price of E10 is higher than that of ULG 95 (3.9%), but it is almost compensated by the lower external environmental costs. From the scenario analysis, it is shown that the substitution of biomass for fossil fuel as the main process energy source in
CH4 17.6% N2O 8.6% CO 10.3% NOx CO2 14.0% 84.6% SO2 5.1% VOC 11.6% PM10 32.7%
CH4 16.6% N2O 10.8% CO 8.8% NOx 11.8% SO2 6.0% VOC 12.5% PM10 33.5%
% Change 435.2 221.3 213.9 894.4 1329.6
gasohol E10-a
gasohol E10-b
CO2 84.6%
5.9
4. Conclusions
gasoline
CO2 85.4%
E10-c
Others 15.4%
CH4 16.5% N2O 10.3% CO 8.7% NOx 11.8% SO2 6.2% VOC 12.4% PM10 34.0%
gasohol E10-c
CO2 84.6%
Fig. 3. Breakdown of external emission costs for gasoline and E10 fuels.
Others 15.4%
CH4 16.6% N2O 11.5% CO 8.9% NOx 11.9% SO2 5.4% VOC 12.8% PM10 32.9%
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ethanol conversion mostly improves the fuel’s life cycle energy, environmental and cost performance.
Acknowledgments The authors would like to express their appreciation to farmers in the eastern region of Thailand for their collaboration in providing data on cassava farming. Thanks are also given to the research team in Cassava and Starch Technology Research Unit (CSTRU), Bangkok, Thailand as another important data provider. The financial support from the Joint Graduate School of Energy and Environment, King Mongkut’s University of Technology Thonburi is highly acknowledged.
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