Risk assessment modeling of bio-based chemicals economics based on Monte-Carlo simulations

Bio-based industries aim to replace petroleum derived chemicals with commodity chemicals that are produced from renewable raw materials. Many failures are reported due to scale up issues and uncertain estimations of the capital and production cost of bio-based products. Decision making strategies and risk assessment modeling are crucial to decrease risks of losing large investment projects. The objective of this work is to present a probabilistic mathematical model that was developed to quantify the financial risks of commercializing bio-based technologies. Monte-Carlo simulations are employed to estimate the cumulative distribution function of the net present value (NPV) of several platform chemicals. The novelty lies in the fact that a significant number of uncertainties associated with the inherent bio-processes complex behavior and external random factors are taken into consideration. Risk assessment analysis showed that the investment plan of producing single cell oil and iso-butanol via fermentation in large scales capacities is non-viable. On the contrary, the performed profitability analysis indicates very promising results in commercializing methyl-ethyl-ketone, poly(hydroxybutyric acid) and 1,4-Butanediol. (C) 2020 Institution of Chemical Engineers. Published by Elsevier B.V. All rights reserved.