Risk management consideration in the bioeconomy

Camilla Abbati de Assis, Ronalds Gonzalez, Stephen Kelley, Hasan Jameel, Ted Bilek, Jesse Daystar, Robert Handfield, Jay Golden, Jeff Prestemon, Damien Singh

Research output: Contribution to journalReview articlepeer-review

20 Scopus citations

Abstract

In investing in a new venture, companies aim to increase their competitiveness and generate value in scenarios where volatile markets, geopolitical instabilities, and disruptive technologies create uncertainty and risk. The biobased industry poses additional challenges as it competes in a mature, highly efficient market, dominated by petroleum-based companies, and faces significant feedstock availability and variability constraints, limited technological data, and uncertain market conditions for newly developed products. Thus, decision-making strategies and processes for these investment projects must consider solid risk estimation and mitigation measures. Focusing on the biobased industrial sector, this paper critically reviews state-of-the-art probabilistic and deterministic methodologies for assessing financial risk; discusses how a complete risk analysis should be performed; and addresses risk management, listing major risks and possible mitigation strategies.

Original languageEnglish (US)
Pages (from-to)549-566
Number of pages18
JournalBiofuels, Bioproducts and Biorefining
Volume11
Issue number3
DOIs
StatePublished - May 1 2017
Externally publishedYes

Keywords

  • bioeconomy
  • biomaterials
  • financial risk analysis
  • investment assessment
  • probability analysis
  • project evaluation
  • uncertainty analysis

ASJC Scopus subject areas

  • Bioengineering
  • Renewable Energy, Sustainability and the Environment

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