Economic Cost Analysis of Biodiesel Production: Case in Soybean Oil

Abstract

The economic costs of three biodiesel plants with capacities of 8000, 30 000, and 100 000 tons year -1 were analyzed and assessed. The plants employ continuous processes using an alkali catalyst and the raw material of soybean oil. Six major economic cost factors were computed and examined. These include the fixed capital cost (FCC), total capital investment cost (TCC), total manufacturing cost (TMC), net annual profit after taxes (NNP), after-tax rate of return (ARR), and biodiesel break-even price (BBP). The NNP and ARR of plants with capacities of 8000, 30 000, and 100 000 tons year -1 are -24 × 10 3 , 1975 × 10 3 , and 8879 × 10 3 U.S. dollars (USD), and -10.44, 40.23, and 67.38%, respectively. The values of BBP of the three plants are 862, 724, and 678 USD ton -1 (price in July 2007). The plant with a capacity of 100 000 tons year -1 is economically feasible, providing a higher NNP and more attractive ARR with a lower BBP. Among the system variables of the plants examined, plant capacity, price of feedstock oil and diesel, and yields of glycerine and biodiesel were found to be the most significant variables affecting the economic viability of biodiesel manufacture. In summary, this study aims at the need to obtain useful information for economic cost analysis and assessment of the production process of biodiesel using soybean oil. It provides an appropriate indication for the promotion of biodiesel in the future, targeting the reduction of the cost of feedstock oil with the increase of the yields of valuable products with a reasonable plant capacity.

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“…In both groups of catalyst there are several kinds; alkali catalyst, acid catalyst, lipases (biocatalyst). You et al [5] conducted a research into the biodiesel production using an alkali catalyst and discovered it is quite common due to its low temperature and pressure operation. Production of biodiesel using homogeneous catalysts offers high conversion rapid reactions.…”

Recoverable and reusable aluminium solvated species used as a homogeneous catalyst for biodiesel production from brown grease

“…First generation biofuels, namely fatty acid methyl esters (FAMEs), were initially produced from refined oil via a basic transesterification process using methanol. Since these oils are too costly as a starting source [1], attention was lately focused on the use of cooking oil [2], non-edible oils [3], or animal fat [4], which are defined as yellow grease, with a free fatty acid (FFA) content between 2 and 15% [5].…”

Mixed Alkyl Esters from Cottonseed Oil: Improved Biodiesel Properties and Blends with Diesel Fuel

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