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Risk management consideration in the bioeconomy
Author(s) -
de Assis Camilla Abbati,
Gonzalez Ronalds,
Kelley Stephen,
Jameel Hasan,
Bilek Ted,
Daystar Jesse,
Handfield Robert,
Golden Jay,
Prestemon Jeff,
Singh Damien
Publication year - 2017
Publication title -
biofuels, bioproducts and biorefining
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.931
H-Index - 83
eISSN - 1932-1031
pISSN - 1932-104X
DOI - 10.1002/bbb.1765
Subject(s) - risk management , investment (military) , business , risk analysis (engineering) , probabilistic logic , listing (finance) , financial risk , industrial organization , finance , computer science , artificial intelligence , politics , political science , law
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. © 2017 Society of Chemical Industry and John Wiley & Sons, Ltd