Biofuels Modeling in IMPACT
Simla Tokgoz
Environment and Production Technology Division
October 28, 2010
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Codesion
• The login page for our official Codesion
account is
http://www.codesion.org
• To “Check Out” Biofuel model
https://ifprigf.svn.cvsdude.com/biofuels/
BRANCH/Training/
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Biofuels Sector
• Biofuels are made from agricultural feedstocks
– Biodiesel from Oils (soybean oil, rapeseed oil, etc.)
– Ethanol from Grains, Sugarcane, Sugar beet
• Link Biofuels model to Agricultural Sector
model in IMPACT
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Biofuels Model
• Create a NEW project file (.gpr) in your
Working Copy
• Do not ever “commit” this gpr file to Codesion
• Open GAMS file:
IMPACT_RebuildModel_AggLivstkBiofuels_2b.gms
• Run GAMS file
• Look at Folder named “OutputFiles”
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Biofuels Sector Data
• Biofuels data starts from 2005
• IMPACT data is 2000 Base Year Data
• 2005 is a projection in IMPACT
• How to merge the two?
– Between 2000 and 2004, we either use Data or
Exogenous Assumptions
– Starting in 2005, we use Biofuels Data and an
endogenous Biofuels model
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Biofuels Data
• Go to Data Folder
• BioFuelDataSet_IMPACT_1_Wei.xls
• Look at Worksheet named “TradeBalance”
where we have production, demand, net trade
data for Ethanol and Biodiesel
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Linkages
• For Grains and Oils sector
• Biofuels Production Feedstock Demand
Additional Demand for Feedstocks
• Add Biofuels Demand for Feedstocks to Total
Demand
• Supply and Demand for Grains and Oils
sectors included in IMPACT, where we solve
for prices of these commodities
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Grains and Oils Sector
• Biofuel demand for feedstocks used to be part
of “Other Demand” in IMPACT data
• Now, we are modeling Biofuel demand for
feedstocks
• First, subtract “Biofuel Demand” from “Other
Demand” and include “Net Other Demand” in
year 2000 (Base Year Data)
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Grains and Oils Sector
• Exogenous Growth Rate assumptions for
Biofuel Demand for Feedstocks between 2001
and 2004
– Biofuel demand for feedstocks in 2001 =
Biofuel demand for feedstock in 2000*Growth
Rate of Demand
• Starting in 2005, we model Biofuels sector
• Starting in 2005, we endogenize Demand for
Feedstocks coming from Biofuels
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Linkages
• Sugarcane can be used to produce Ethanol OR
Sugar
– One Commodity, Two Outputs
• Split Sugarcane production into 2 demands
– Share of Sugarcane going into Sugar
– Share of Sugarcane going into Ethanol
• Similar for Sugar beet
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Sugar Model
• Two Feedstocks are used to produce Sugar
– Sugarcane and sugar beet
• Only Supply for sugarcane and sugar beet
included in IMPACT (area and yield), we do not
solve for sugarcane and sugar beet prices
• Demand and Supply for Sugar included in IMPACT
– Supply of Sugar = Sugarcane supply * Share *
Conversion Rate
• Solve for Sugar price
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Sugar and Ethanol Model
• Link “Share of Sugarcane going into Sugar” and “Share
of Sugarcane going into Ethanol” such that they add up
to 1.
• We model impact of Ethanol Sector in Brazil on
Brazilian Sugar markets through Supply of Sugarcane
• We model 1 supply function for each commodity
• For 2000-2004, “Share of Cane or Beet going into Sugar
or Ethanol” is Fixed/Exogenous at Data
• For 2005 and onwards, model “Share of Sugarcane
going into Sugar” and “Share of Sugarcane going into
Ethanol” endogenously
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How to Implement this in GAMS?
• Read in New Data
– In IncludeFiles, open
BiofuelsModelDataReadIn_1_Wei.inc
• Generate and Initialize New Parameters
– In IncludeFiles, open
BiofuelsTradeModel_Initialize_1_Wei.inc
BiofuelsTradeModel_ReInitialize_1_Wei.inc
– Define Intercepts for Biofuel Equations
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How to Implement this in GAMS?
• We model Year 2005 differently than other
years, since we have Biofuels data for 2005
and it needs to match what IMPACT projects
for 2005
• Then, Biofuels production projection for 2005
equals the 2005 Biofuels production data.
• Set up the Equations for
– ycounter equals 2005
– ycounter not equals 2005
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How to Implement this in GAMS?
• For year ≠ 2005, keep the current order of
“include” files within the yiter loop. That is, solve
the Biofuel market equilibrium module first and
then solve the food model.
• For year=2005, solve the food model first using
the feedstock demand calculated from 2005
Biofuel production data and conversion rates, use
the solved crop prices to calculate the intercepts
of the Biofuel production functions, and then run
the Biofuel market equilibrium model using these
intercepts that are calibrated from 2005 data.
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How to Implement this in GAMS?
• In Include file:
CoreRebuildAggLivstkBioFuelModelEqn_1_Wei.inc,
we set up the core equations of the model which solve for
equilibrium in agricultural markets
• In Include files:
BiofuelsModel_MktEquilModule_1_Wei_Molasses2005.inc,
BiofuelsModel_MktEquilModule_1_Wei_Molasses1.inc,
BiofuelsModel_MktEquilModule_1_Wei_Molasses2.inc,
we set up the core equations of the model which solve for
equilibrium in biofuels markets
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How to model different technologies?
• Brazil produces ethanol from sugar cane, so ethanol
competes with sugar
• Define a Set:
CaneEthlCty(cty) /BRA/
subset of countries that use sugar cane juice directly for
ethanol production
• India produces ethanol from molasses which is a by product
of sugar production, so ethanol does not compete with
sugar
• Define a Set:
MolassesEthlCty(cty) /IND/
subset of countries that use molasses to produce ethanol
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How to model different technologies?
• If we want to only add the feedstocks that are
used for Biofuels productions
• Define Sets
• BioE(j) /sugc,sugb,maiz,whea,cass,othr/
subset of crops used for bioethanol
• BioEG(j) /maiz,whea,cass,othr/
a new subset of feedgrains used for bioethanol
• BioD(j) /oils/
subset of crops used for biodiesel
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How to model different technologies?
• Use these sets to in the code to define
parameters, variables more specifically
• In Include file:
BiofuelsModel_MktEquilModule_1_Wei_Molasses1.inc
Look at Feedstock Demand from Ethanol Production
FeedStockDemand_E(cty,yiter,j)
$(EthYield(j) and BioE(j) and ( ycounter ge 2005 ) ) =
( (FeedMix1(cty,j)*(1e+06)*Ethl_QS(cty))/EthYield(j) )
/(1e+03);
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Conclusions
• Knowledge about the commodity markets
• Conceptual Model
• Data Availability
• GAMS code
• All these have to be merged together for any
type of modeling.
• It is not easy!
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Thank you!
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE