Biodiesel Expansion

Biodiesel Expansion:

Whether or not the industry will see new biodiesel processing plants coming on board or expansion of the existing facilities depends on the demand or the lack of demand for biodiesel fuel.

Past decade saw an unprecedented increase in oil prices. As a result, economics played an important role in expanding the interest in increased production and use of biodiesel as a fuel.

Awareness for the need to reduce environmental impact by using biofuels is at all time high. However, despite generous incentives in the form of biodiesel tax credits offered by the govenment, several factors have impeded the expansion of biodiesel production and use for transportation, industrial, and agricultural applications.

Some of the main factors are:

• Wild fluctuations in the price of Oil.

• Global economic meltdown - making it difficult for investors and biodiesel manufacturers to invest in new biodiesel plants or expansion of the existing facilities.

• Feedstocks for Biodiesel: While research is on to find promising biodiesel feedstocks that would not compete for consumption by humans, current biodiesel production is primarily derived from animal fat, waste vegetable oil, and edible oils such as Soybean Oil, Palm Oil, Rapeseed Oil, and non-edible oils from Jatropha seeds.

• Algae to Biodiesel is a promising concept. Research is being done to find ways for growing biodiesel algae. Research is also underway to find means to commercially harvest it for algal biodiesel production.

However, home biodiesel production remains popular among those using small scale biodiesel processor kits.

Fuel vs. Food: Expansion of biodiesel production capacity as a renewable energy source has a significant impact on the agricultural sector. Production levels, prices, and the acreage dedicated to the production of crops have traditionally been based on the requirement for human consumption.

Excess production of the crop feedstock has also been a source of significant foreign exchange revenues from exports.

However, as the use of biodiesel increases, this is likely to cause food prices to go up. Notwithstanding this negative aspect, biodiesel expansion, as a renewable energy source, can help reduce dependence on foreign oil and more importantly, help mitigate climate change.

Search for a commercially viable alternative: To avoid a scenario where economics would drive the focus of agricultural production away from food and towards fuel, government grants and tax credit are being used to look for the next generation of biodiesel feedstock that will not only not compete with human needs, but can also be commercially cultivated in sufficient quantities to make a significant difference in displacing dependence on petroleum.

Preliminary research has shown that making biodiesel from algae may hold that promise.

Return from Biodiesel Expansion to Biodiesel Feedstock