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The expansion of the ethanol industry in Brazil faces two important challenges: to reduce total ethanol production costs and to limit the greenhouse gas (GHG) emission intensity of the ethanol produced. The objective of this study is to economically optimize the scale and location of ethanol production plants given the expected expansion of biomass supply regions. A linear optimization model is utilized to determine the optimal location and scale of sugarcane and eucalyptus industrial processing plants given the projected spatial distribution of the expansion of biomass production in the state of Goiás between 2012 and 2030. Three expansion approaches evaluated the impact on ethanol production costs of expanding an existing industry in one time step (one-step), or multiple time steps (multi-step), or constructing a newly emerging ethanol industry in Goiás (greenfield). In addition, the GHG emission intensity of the optimized ethanol supply chains are calculated. Under the three expansion approaches, the total ethanol production costs of sugarcane ethanol decrease from 894 US$/m 3 ethanol in 2015 to 752, 715, and 710 US$/m 3 ethanol in 2030 for the multi-step, one step and greenfield expansion respectively. For eucalyptus, ethanol production costs decrease from 635 US$/m 3 in 2015 to 560 and 543 US$/m 3 in 2030 for the multi-step and one-step approach. A general trend is the use of large scale industrial processing plants, especially towards 2030 due to increased biomass supply. We conclude that a system-wide optimization as a marginal impact on overall production costs. Utilizing all the predefined sugarcane and eucalyptus supply regions up to 2030, the results showed that on average the GHG emission intensity of sugarcane cultivation and processing is −80 kg CO 2 /m 3 , while eucalyptus GHG emission intensity is 1290 kg CO 2 /m 3 . This is due to the high proportion of forest land that is expected to be converted to eucalyptus plantations. Future optimization studies may address further economic or GHG emission improvement potential by optimizing the GHG emission intensity or perform a multi-objective optimization procedure. [ABSTRACT FROM AUTHOR]

This paper presents an economic outlook of the ethanol industry in Brazil considering different biomass feedstocks and different industrial processing options. A spreadsheet model was designed to account for different feedstocks and industrial processes, and expected trends in biomass yield, sugar- and fibre content, industrial scale and efficiency. Sugarcane and energycane cultivation costs may be reduced from 35 US$ 2010 /TC in 2010 to 27 US$ 2010 /TC and 22 US$ 2010 /TC in 2030 respectively. Eucalyptus and elephant grass cultivation costs could be reduced from 32 to 23 US$ 2010 /tonne wet and 38 to 26 US$ 2010 /tonne wet for eucalyptus and elephant grass. Total ethanol production costs of first generation processing may decrease from 700 US$ 2010 /m 3 in 2010, to 432 US$ 2010 /m 3 in 2030. First generation ethanol production costs may decrease by reduced feedstock costs, increase in sugar content, utilization of cane trash, and use of sweet sorghum. Furthermore, the improvement in industrial efficiency of the first generation process, increasing industrial scale and change to an improved technology are other measures. For second generation technology utilizing eucalyptus, the total ethanol production costs could be strongly reduced to 424 US$ 2010 /m 3 in 2030. Costs reduction measures for second generation industrial processing include reduced feedstock costs, increasing industrial efficiency and scale, and a change to more advanced industrial process. Overall, biomass yield, increase in sugar content of sugarcane, and improved industrial efficiency are important parameters in total ethanol production costs. Ongoing RD&D effort and commercialization of second generation industrial processing may result in the lowest ethanol production costs for second generation processing in the future. [ABSTRACT FROM AUTHOR]