The 7-Billion-Gallon Gift: affordable, cost-competitive biofuels are in our biostockings

’Twas the week before Christmas, and ’cross all the States,

Not a refinery building, despite carbon tax rates.

The bankers lay nestled all snug in their beds,

While visions of bioprojects danced out of their heads.

Two centuries ago, when Clement Clarke Moore wrote A Visit from St. Nicholas at his Chelsea estate on the edge of a still-wooded New York City, energy was local, materials were visible, and value came from what lay close at hand. Fuel came from forests within reach. Supply chains were short. Economics were grounded in proximity, reliability, and cost.

Today, the American bioeconomy finds itself in a curious reversal. We are surrounded by abundance — residues in our fields, forests, and cities — yet capital hesitates. Not because demand is unclear. Not because policy signals are absent. But because the bioeconomy has drifted away from affordability.

And affordability, in the end, is the only way forward.

Affordability makes energy popular. It expands the capital pool. It turns ambition into deployment. It remains the best present under the Christmas tree — and we would do well to use it. That means focusing on affordable feedstocks, because affordable feedstocks are the only durable path to affordable biofuels at scale.

Everything one truly needs to know about affordable feedstocks in the United States — and conceptually, anywhere — is contained in the 2023 Billion-Ton Report. It ought to be required reading — perhaps even bedtime reading — for doting bankers with biorefining ambitions this Christmas Eve. Hidden in plain sight, inside the report’s near-term data, is a practical and immediately actionable pathway to seven billion gallons of fuel. Not in 2050.
 Not after breakthroughs. Now.

From Affordability to Capital Formation

Affordability is not a slogan. It is a financial mechanism.

Lower input costs widen margins. Wider margins improve debt-service coverage. Stronger coverage reduces perceived risk. And reduced risk is how capital pools expand — quietly, predictably, and at scale. This is how industries grow when they grow for real.

For the U.S. bioeconomy, feedstocks are the fastest and most controllable lever in that chain. Technologies can be brilliant, policies can be supportive, markets can be eager — but if the variable cost structure does not support reliable returns, capital will remain cautious. Conversely, when feedstock costs fall into a range that makes margins obvious rather than heroic, bankers wake up.

That is precisely what the near-term findings of the 2023 Billion-Ton Report make possible.

The 100-Million-Ton Portfolio

To understand what a “right-now” bioeconomy looks like, it helps to stop thinking in terms of total theoretical biomass and start thinking in terms of the most affordable, available, and reliable 100 million tons already in the system today. These are not energy crops waiting on land-use change, nor experimental feedstocks waiting on breakthroughs. They are residues and wastes generated by industries that already operate at scale.

Because they are tied to existing activity, they show up every year — regardless of market cycles.

1. Logging Residues — 18.5 Million Tons
The U.S. forest products industry is a roughly $300-billion annual enterprise. Conventional timber harvests generate large volumes of tops, limbs, and unutilized tree sections left behind at the landing. In the near-term scenario, approximately 18.5 million dry tons of these residues are readily available.

Crucially, they carry an average “shadow price” of about $40 per dry ton. They are reliable because they are a byproduct of a mature, continuous industry. As long as America produces lumber and pulp, these residues will be generated — collected where roads already exist and infrastructure is already in place.

2. Urban Biogenic Waste — 19 Million Tons
America’s cities are among its most underappreciated reservoirs of renewable carbon. Clean urban wood, discarded textiles, and yard trimmings — materials that today are largely landfilled — add up to roughly 19 million tons of biogenic waste each year.

Because municipalities already pay to dispose of them, these materials are available at exceptionally low effective prices, averaging around $11 per wet ton. Just as important, they are geographically concentrated near population centers where labor, logistics infrastructure, and fuel demand already intersect. In this context, waste is not a problem to be solved. It is a cost advantage waiting to be claimed.

3. Agricultural Residues — 62.5 Million Tons
Agricultural residues represent the largest share of the near-term opportunity. While total availability exceeds 130 million tons, focusing on the most affordable 62.5 million tons — primarily corn stover and wheat straw in high-density regions — keeps collection and logistics costs manageable.

At a reference price of roughly $50 per dry ton, and supported by advances in harvesting technology that allow sustainable removal without harming soil health, these residues offer scale without controversy. They require no new acreage and avoid the perennial food-versus-fuel debate.

The Portfolio, Assembled

Taken together, these three categories form a practical, financeable foundation:

•Total feedstock volume: 100 million tons
•Weighted average cost: approximately $40.74 per dry ton

This is the feedstock base that makes affordability real — not as aspiration, but as arithmetic. And once the arithmetic works, the capital follows.

The Seven-Billion-Gallon Math (With Real-World Costs)

Once the feedstock portfolio is assembled, the economics of a “right-now” bioeconomy become clear — and remarkably compact.
Using a conservative baseline of 70 gallons of finished fuel per dry ton of biomass, the 100-million-ton portfolio supports seven billion gallons of advanced biofuels annually. This yield assumption spans multiple thermochemical and biochemical pathways already demonstrated at commercial scale.

Now layer in costs — not aspirational ones, but the ones lenders actually underwrite.

Feedstock costs at a weighted average of $40.74 per dry ton translate to approximately $0.58 per gallon of finished fuel.
Add all other operating costs — labor, catalysts and enzymes, maintenance, utilities, monitoring systems, insurance, and site overhead. Analysis from commercial-scale plants compiled by the Center for Agricultural and Rural Development supports an allowance of roughly $0.50 per gallon for these non-feedstock operating expenses.

That brings total operating cost to approximately: $1.08 per gallon, all-in OPEX. Next comes capital.

Installed capital costs for large-scale biorefining facilities continue to cluster around $10 per annual gallon of capacity. A 100-million-gallon-per-year facility therefore implies $1 billion in installed CAPEX.

Assume that capital is financed over 30 years at a 10.2% interest rate, consistent with current North American construction loan conditions. Standard capital-recovery math implies an annual capital charge of roughly 10.8% of installed cost, or $108 million per year.

Spread across 100 million gallons of annual production, the capital recovery requirement is approximately: $1.08 per gallon.

Put it together:
•Feedstock: $0.58 / gal
•Other operating costs: $0.50 / gal
•Capital recovery: $1.08 / gal

Target advanced biofuel price (no carbon value): ~$2.16 per gallon. That is the number that matters.

At roughly $2.15–$2.20 per gallon, advanced biofuels produced from today’s most affordable residues are already within striking distance of conventional petroleum diesel on a wholesale basis — before considering any carbon value, policy incentives, or regulatory premiums.

Wholesale petroleum diesel prices in recent years have typically ranged from the low $2-per-gallon range in weak markets to $3-plus in tighter ones. Against that backdrop, the gap to close — if there is one at all — is modest.

What Carbon Value Would Close the Gap?

Well, that’s lower than petroleum diesel costs right now. So, carbon prices help sweeten the margins to account for the risks, and provide cushion should petroleum diesel prices drop. Which means the central question is no longer whether advanced biofuels can be affordable.

It is whether we choose to organize capital, sites, and supply chains quickly enough to take advantage of the affordability that already exists.

If So, Then What?

If the arithmetic holds — and it does — the remaining questions are no longer philosophical. They are practical.
Where do the plants go?
How fast can they be built?
And how much capital does it actually take to reach seven billion gallons?
The answers are refreshingly concrete.

Facilities gravitate to where feedstocks already concentrate and infrastructure already exists: forested regions with active timber harvests, agricultural corridors with high residue density, and metropolitan areas where biogenic waste is generated daily and disposal costs already burden municipalities. In each case, the logic favors distributed, regional deployment rather than a handful of mega-projects — smaller footprints, shorter supply chains, faster permitting, and earlier cash flow.

On timelines, commercial biorefining facilities do not require generational patience. From site selection to commissioning, four to six years is a realistic window when projects are well capitalized and feedstocks are secured early. Seven billion gallons is not one plant. It is a build-out — dozens of facilities over time — scaling steadily rather than spectacularly.

And the capital pool?

At roughly $10 per gallon of installed capacity, a full seven-billion-gallon build-out implies on the order of $70 billion in total capital, deployed over many years and many projects. That is a large number — but not a frightening one. It is smaller than a single year of upstream oil and gas investment in North America. More importantly, it is not a speculative wager. It is capital deployed against physical assets, durable supply chains, and operating margins grounded in affordability. This is what changes when affordability leads. Capital stops waiting for certainty and starts underwriting execution.

Two centuries ago, Clement Clarke Moore wrote of a visitor who arrived not with grand speeches, but with practical gifts — delivered quietly, efficiently, and right on time. The lesson endures.

The American bioeconomy does not need a miracle this Christmas.
It needs to recognize the gift already at hand. The feedstocks are ready. 
The math works.
 The capital is waiting for permission to believe.

And when affordability lands on the roof, the bankers will tear open the shutters and throw up the saash, because what their wondering eyes will have appeared, but prosperity for all, in the new bio-year.