Optimizing the transportation and distribution of anaerobic digestion co-product within a closed-loop supply chain

This research explores anaerobic digestion production and transportation in the context of a collaborative and closed-loop supply chain (SC). The raw materials suppliers provide an anaerobic digestion plant with organic residues, which can be in two forms: liquid or solid. During the anaerobic digestion process, these residues are decomposed in the absence of oxygen into biogas and digestate, which is a high-value organic fertilizer used on farms. Most of the suppliers are also customers requiring to recover the digestate for their own farms. Moreover, they need to obtain the digestate in the same form as the organic residues they have provided (liquid or solid). However, when it exits the anaerobic digestion plant, the digestate is in liquid form and therefore requires passing through a separator to be dewatered. This additional operation is costly. The aim of this study is to determine the quantity of digestate to allocate to the suppliers-customers to minimize the total costs of the SC, including transportation and separation costs, to achieve maximum collective savings. After defining and modelling the problem, we established eight different allocation strategies, ranging from an allocation closest to a predefined allocation deemed fair to allocations leading to the minimum total cost. Our model and strategies are applied to a real regional case study in Canada.