Price biodiesel

World-wide demand for glycerol is projected to be 0.2 Mt in 2007 and is forecasted to grow by 2.2% per year, driven mainly by personal care and food products [10]. If the target of the European Union directive is achieved, European biodiesel demand could increase to 10 Mt per year by 2010, resulting in 1 Mt of glycerol [2]. The price of glycerol has already fallen by 50% over the past ten years [10, 11]. Thus, the application of glycerol, obtained from the biodiesel process,... 

Vegetable oils have the potential to substitute a fraction of petroleum distillates and petroleum-based petrochemicals in the near future. Vegetable oil fuels are not petroleum-competitive fuels because they are more expensive than petroleum fuels. However, with recent increases in petroleum prices and uncertainties concerning petroleum availability, there is renewed interest in using vegetable oils, called biodiesel, in diesel engines. 

Production costs are rather high. However, it is extremely important to note that the main fador affecting the cost of biodiesel is not the process but the cost of raw material, accounting for up to 85% of the final product cost. It is therefore not surprising that the skyrocketing price of vegetable oils during 2007-08 has caused half of the biodiesel plants in Europe to stop production. 

Table 6 Biodiesel feedstock pricing and impact on production cost (2004) ...

The first-generation biofuels can be identified as ethanol, which was produced via the alcoholic fermentation of cereals, and hio-oil or biodiesel, which was extracted from seeds such as sunflower, rapeseed, or palm. The use of cereals and sunflowers was rejected by public opinion and some scientific environments, because their use for energy production conflicted with their use as foodstuffs. In fact, the diversion of cereals to the production of ethanol for transport has led to a rise in the price of flour and derived goods, especially in Mexico. The same situation has arisen for some bio-oils, such that the source was shifted to palm-oil which, essentially, is produced in Asian countries such as Malaysia. 

The biorefinery approach is the most sound in terms of truly exploiting the potential of an aquatic biomass, and this concept is now becoming accepted on a worldwide basis. In the biorefinery approach, the economic and energetic value of the biomass is maximized, although it must be emphasized that fluctuations in the prices of fossil carbon (coal, oil, gas) raises uncertainty regarding the opportunity to produce biodiesel from aquatic biomass. For example, when the oil price is below US 120 per barrel it is uneconomic to produce biodiesel in this way. On the other hand, an aquatic biomass demonstrates an excellent potential for use as a source of specialty chemicals, with some components also having added value as animal feeds or fertilizers. 

The production of aquatic biomass focusing initially only on energy production may represent a risky operation, taking into consideration today s large fluctuations in the price of fossil-based oil. As noted above, with fossil-oil prices currently below US 120 per barrel, algal biodiesel is barely competitive with diesel from fossil fuels. However, if the oil price were to exceed US 120 per barrel, then biodiesel from aquatic biomass may become economically viable [21, 22],... 

The U.S. bioethanol industry is growing rapidly. Production in 2007 was 6.5 billion gallons from 139 bioethanol refineries. A further 4 billion gallons of capacity are expected to come online by the end of 2008. In 2006,14% of the corn crop in the United States was used to produce ethanol and probably as a result, com prices increased by 25% in 2007. In the United States 90 plants operated in 2006 and 160 in 2007. Just in Iowa, 42 ethanol and biodiesel plants are in operation and an additional 18 are under construction. A study by the Organization for Economic Cooperation and Development calculated that in order to meet 10% of the fuel requirements of the United States, Canada, and the EU, 30% to 70% of their crop area would have to be devoted to biofuels. 

Considering the worldwide increase in biodiesel production, the market price of glycerol could be decreased from the current 1.34-2.00/kg to 0.45-1.12/kg making glycerol a major building block for bulk chemical production (Werpy and Petersen, 2004). Glycerol conversion could be accomplished by green chemical... 

In the past, glycerol was produced mainly from propene via allyl chloride and epi-chlorohydrin, a process developed by I. G. Farben and in operation since 1943. Today, glycerol is obtained almost completely as a coproduct in oleochemistry (fat splitting) and biodiesel production (transesterification) with 110 kg crude glycerol or 100 kg pure glycerol per ton of biodiesel [37]. With the rise in biodiesel production, the availability increased while the price decreased drastically by approximately 66% within 15 years in the United States [38]. 

These different businesses may have diverse backgrounds, rooted in vegetable oil business or the petrol business, or based on investment financing, however, they all have one thing in common they produce biodiesel, or better fatty acid methyl esters (FAME) to be used by petrol companies for blending with fossil diesel to B2, B5, B10 or B100. These fatty acid methyl esters must comply with the Biodiesel Standard in use in the region of commercialization. And most importantly, this biodiesel needs to be produced at a market competitive price. 

This, however, is not sufficient if the pricing of the product isn t right. At off-market prices, sellers will never find buyers for the product. Biodiesel price depends on several non-related independent price systems, such as fossil diesel and (vegetable) oil price, methanol and glycerin price, the local-currency-to-... 

U.S. dollar exchange rate, and finally on a favorable tax environment. In practice, the raw materials account for more than 70% of the final biodiesel price. It is therefore of utmost importance having these raw materials at the lowest cost possible, while properly managing production and logistics costs. 

In the different Biodiesel Standards the specifications are linked to the fatty acid composition itself. Some characteristics may be affected by the presence of minor components, but most variation is directly linked to the FAME composition. Two questions emerge how are these relationships built, and how can we take advantage of these when making blends with the lowest possible raw material price ... 

Table 3.2 displays some examples for ternary blends of palm oil, soybean oil and rapeseed oil methyl esters. Under the price conditions given in the table, a typical winter formula would contain SQ-90% rapeseed methyl esters, with the balance mainly soy methyl esters and maybe a few percent of palm methyl esters. In summertime no rapeseed would be used. For Europe 70 to 80% soy methyl esters would combine with palm methyl esters as the balance. For Biodiesel in the U. S., the palm oil methyl ester content would be equally high, making the formula considerably cheaper than pure soy methyl esters. 

The Biodiesel Cost Optimizer can easily be used for evaluating the value of more exotic components such as lauric fats, or recycled oils and fats. Recycled oils are interesting for price reasons, although availability of a solid supply and... 

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