A simulation model for the design and analysis of wood pellet supply chains

During the past decade, the global trade of wood pellets has been growing. Rapid increases in the production and consumption of wood pellets, and predictions on its increased demand in the near future have formed a competitive global market. Several studies have focused on the economic, environmental, and technological aspects of wood pellet production and consumption. In this paper, a simulation model is developed to enhance and facilitate the studies concerning the design and analysis of wood pellet supply chains. The scope of the model covers the entire supply chain from sources of raw materials to the end customers, providing a framework for assessment of the supply chains. The model includes uncertainties, interdependencies between stages of the supply chain, and resource constraints, which are usually simplified or ignored in previous studies. The outputs of the model include the amount of energy consumed in each process and its related CO2 emissions, and the cost components of delivered wood pellets to the customers. The model was applied to an existing supply chain located in BC, Canada. The estimated cost of wood pellets was 69.27 $ t−1 at the pellet mill’s gate and 101.33 $ t−1 at customers’ locations. Distribution of wood pellets to the customers contributed about 30.65% to total costs. Raw material procurement and transportation accounted for 29.16% of the total delivered cost, while pellet production contributes 40.19% to the total delivered cost. The energy consumption and CO2 emission along the supply chain were estimated at 568.93 kW h t−1 and 136.91 kg t−1, respectively. The results of scenario-based analysis showed that by changing the drying fuel from sawdust to bark, about 1.5% cost reduction was achievable. Blending 10% bark in the whitewood feedstock reduced the estimated cost to 96.51 $ t−1 (4.75% reduction).