A mixed integer linear programming model for optimizing the design of the forest supply chain in Argentina

RODRIGUEZ, MARIA ANALIA; ALASINO, NOELIA; VECCHIETTI, ALDO

Conferencia; 2nd RCN Conference on Pan American Biofuels and Bioenergy Sustainability 2016; 2016

Forest industry faces many challenges in the present. The industrial network is formed by the wood manufacturing and the pulp and paper industries. In the particular case of Argentina, a strategic national plan is required in order to promote specific developments in the involved sectors. Regarding forest provision, there is a scarce provision of eucalyptus and salicaceae species (hardwood) and an oversupply of pine (softwood) is located in one province: Corrientes. In addition, investments are required for new sawmills given the limited installed capacity in the country. The pulp and paper sector is a capital intensive industry and incentives are needed in order to attract local and foreign investments guaranteeing a sustainable industrialization and import substitution. In this sense, Argentina produces 980 thousand tons of pulps per year while other neighbors such as Chile, Uruguay and Brazil produce 4.5, 1.2 and 13.5 millions of tons, respectively. Furthermore, the commercial balance presents deficits in some specific type of papers. The lack of research and development activities in the involved companies turn out into low innovation regarding the development of new products as well as in the ways of doing business. The forest supply chain (FSC) is then driven to expand its limits, increase the installed capacities and develop a product portfolio with higher added value. One interesting alternative is to integrate ethanol bio-refineries into the FSC. Forest resources represent 80% of the global biomass and are widely distributed. The abundance of these sources as well as the fact that they do not directly compete with food needs, make these an attractive raw material for the bio-ethanol industry. Indeed, in order to remain competitive, the FSC must increase installed capacities and develop a product portfolio with higher added value. With this objective, the integration of ethanol bio-refineries into the FSC is evaluated in this work. The FSC involves forest sites that can be expanded, installed and potential pulp and paper plants, timber mills, new cellulosic bio-ethanol plants and demand nodes. Different types of wood species and residues from the trees felling and the industrial processes are considered to select the most convenient. Operating nodes can be expanded and new ones installed. Four processes are proposed for the bio-ethanol plants, i.e. simultaneous saccharification and fermentation; simultaneous saccharification and co-fermentation; acid hydrolysis and separate fermentation and enzymatic hydrolysis and separate fermentation; each of them with different operational and investment costs as well as production efficiencies for each raw material. The objective is to determine the optimal location of nodes, links, technologies and feedstock minimizing total costs. The problem is formulated as an MILP and implemented in GAMS 24.1 system.