Document Type : Original Article

Authors

1 Ahmadu Bello University, Department of Chemical Engineering, Zaria, Nigeria. Laboratoire de Chimie, ENS Lyon, l’Universite de Lyon, 69007, Lyon, France.

2 Ahmadu Bello University, Department of Chemical Engineering, Zaria, Nigeria.

3 Federal University, Mathematics & Statistics Dept., Wukari, Nigeria.

4 Covenant University, Economics & Development Studies Dept., Ota, Nigeria.

5 Federal University, Biochemistry Dept., Dutsin-ma, Nigeria.

6 Federal University of Technology, Chemistry Dept., Minna, Nigeria.

7 Ahmadu Bello University, Environmental Engineering Dept., Zaria, Nigeria

10.22044/rera.2020.10288.1043

Abstract

Increasing energy demand and fossil fuel dependency have increased interest in bioethanol production in recent years. The use of conventional saccharine and starchy materials for ethanol production is prohibitive as it is a threat to food security. As such, rice husk poses to be of great value, providing a means to utilize waste. This study assessed the economic viability of bioethanol production from rice husk waste, which entails capital and manufacturing cost estimation, and profitability of this process. Further cost optimization studies were carried to determine the material cost, government subsidy, and tax potential to maximize the overall financial benefit (i.e., ROI and net profit) of the bioethanol production. Findings from this study indicated that transforming rice husk into bioethanol would not be economically feasible due to negative net profit (i.e., a loss on investment) obtained from its profitability analysis. Further studies indicated that the project was susceptible to the raw material cost, subsidy, and tax rate. Result obtained from the optimization studies indicates that if the rice husk sales as low as 1.38 US$/kg, and Government introduced 25% subsidy and tax-free policy on bioethanol production, the project would yield a net worth of US$ 5 million per annum, payback period of 5.5 years, and a return on investment of 16.1%. Therefore, this study recommends introducing a subsidy and tax-waiver policy for biofuels production to encourage investors and promote cleaner fuels in emerging nations.

Keywords