A system dynamics approach to analysing bioethanol and biodiesel supply chains: increasing bioethanol and biodiesel market shares in the USA

Abstract

Copyright © 2020 Inderscience Enterprises Ltd. This paper proposes a system dynamics model to study and analyse interactions among the variables of bioethanol and biodiesel supply chains. The proposed model is used for constructing scenarios to investigate appropriate policy options and their possible future effects on the market share of bioethanol and biodiesel in the USA. In order to increase bioethanol and biodiesel market shares and creating a reasonable balance between them, a scenario-based sensitivity analysis is conducted. The results of sensitivity analysis demonstrate that causing an increase in oil plant and biodiesel production and a decrease in corn and bioethanol production results in an increase in both bioethanol and biodiesel market shares as well as a fair balance between them. Policy implications related to increasing biofuel production in the USA are also provided. Additionally, for validating the proposed model, behaviour reproduction test is done.