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Dear Charlie
It would be good if we could find an alternative way to model this.
Let's assume that we are building a scenario with x availability of biodiesel. It seems to me that your approach means that we would first need to "artificially" create downstream the demand for this biodiesel.
When you mix small percentages of biodiesel with diesel, or of ethanol with gasoline, you don't need any special engine. This means that you don't need to create the demand downstream.
In other words, the biodiesel used in the country is simply equal to the available amount: It is defined by the supply side, not by the demand side.
Therefore I think that the best approach, and the one that ressembles more the reality, would be to create a new fuel called for example "Diesel-B" (or "Gasoline-B" if we were mixing gasoline with ethanol).
Diesel-B means "any mixture of diesel and bio-diesel that can be used in standard diesel engines".
Since biodiesel and diesel can have different energy densities, this new fuel should be measured in Joules, and not in liters.
Then you create a transformation unit that mixes diesel and biodiesel, This unit is called "mixing station".
The vehicles do not demand diesel: They demand the new fuel called "diesel-B".
The rule of the mixing station would be as follows: The mixing station should firstly use any locally available biodiesel, and then fill up with diesel in order to meet the demand of "diesel-B"
(A different rule would be defined if you have a mandated percentage, as in Brazil: then the mixing station needs to get x amount of biodiesel --if it is not locally available it needs to be imported-- and then y amount of diesel.)
"Diesel-B" is somehow similar to electricity. Consumers demand electricity and do not care how it is generated.
Is this feasible?
Best regards
Claudio