Quantifying the Microeconomic Impacts of State-Level Incentive Programs On Biorefineries

A growing number of U.S. states are implementing laws and policies that incentive the construction of biorefineries within their boundaries. These incentives range from wide-ranging Renewable Portfolio Standards (RPSs) to narrowly-drawn interest-free loans, such as the $75 million loan recently granted to catalytic pyrolysis company KiOR by the state of Georgia for the construction of a biorefinery in the state. Corporate income tax rates are another factor affecting the economic feasibility of biorefineries that vary widely across states.

We compile and assess the major state-level incentive programs currently being employed by different states to incentivize biorefinery construction. A techno-economic Chemcad model of a biorefinery employing the fast pyrolysis and hydroprocessing pathway for the production of biofuels and bioproducts is built alongside a discounted cash flow rate of return (DCFROR) spreadsheet. The effects of these incentive programs are simulated within the model and their microeconomic impacts are quantified and compared. The result ranks the major incentive programs according to both their direct costs and their net benefit (or harm) to the biorefinery.