Biodiesel

Biodiesel is one of the liquid fuels that can be made of biomass such as vegetable oil from soybean, canola, Jatropha etc. Biodiesel is typically manufactured by a process called transesterification. It is possible to incorporate the same technology to produce biodiesel, including used cooking oil, waste oils from animal rendering operations, or virgin oils. Biodiesel produced from liquid waste by the process of transesterification, could be used in automobiles with various proportions of blends.

Value chain

The process of biodiesel production from waste by the process of transesterification is a relatively simple process than the biodiesel production from oil crops which requires extraction, purification, refining etc.  In waste to biodiesel conversion, the collected waste is usually subjected to processing such as degumming, neutralization etc. FFA removal is a vital step before transesterification. The process of transesterification yields glycerin and biodiesel. The glycerin phase is much denser than biodiesel phase and the two can be gravity separated with glycerin simply drawn off the bottom of the settling vessel.

Business Opportunities from the Value Chain

Feedstock Suppliers

The prominent raw materials used in production are used cooking oil, waste vegetable oil etc.The suppliers of oil are shops that sell food (restaurants, fast food outlets and neighborhood dinners), which sell directly to the biodiesel producer). Since the raw material that could be used for producing biodiesel by transesterification is quite few, the market and the opportunity is very much concentrated. Opportunity in feedstock supply is very narrow here as compared to other liquid fuels that follows this section.

Opportunities in Manufacturing Sector

The process of obtaining biodiesel from waste oils and animal fats is a relatively simple and straight forward one which primarily involves only the transesterification step. Opportunities for manufacturing machineries and equipments are literally unattractive due to lack of choices.

Service Opportunities

While manufacturing sector seems to be unappealing in terms of dreath of opportunities, the service sector presents sizable opportunities. Consulting services are required in all aspects of feasibility analysis and business development including assessments of product and co product markets, feedstock acquisition and contracting, technology analysis, risk analysis specific to biodiesel technology, and general project risks, market and financial analysis.

Since this process is a very simple process which is not effort intensive, it could attract lot of small scale entrepreneurs into the business. This opens up opportunities for training which finds great need to the small producers so that they can get a quality product and build a reputation in biofuel market. Logistic service providers play a key role in transportation of Waste Vegetable Oil (WVO) to wholesale market and production units. WVO requires dedicated tankers and those tankers cannot accommodate material other than WVO

Global Scenario and Market segment

The global scenario and current trends in biodiesel doesn’t require much of an introduction or explanation. There is an explosive growth for biodiesel from 2004. The market for biodiesel is growing around the world, with mandated biodiesel blends and fiscal incentives driving the growth at a never before pace. Every country has proposed strict blending targets for near there and the necessity for meeting these targets will strongly increase the demand for biodiesel and will open huge national and international markets.

Biodiesel is a fast growing product in both the United States and Europe as government policies seek to spur the development of renewable transportation fuels. In the US alone since 2004, biodiesel production has grown from 75 million gallons per year to 650 million gallons per year in 2008.

While the production of biodiesel is beginning to have an effect on the liquid fuels market, it has already had an enormous effect on the market for another good, glycerol. Transesterification process yields 100kg of glycerol for every metric ton of biodiesel produced, a 10% yield. Total world biodiesel production in 2008 was estimated to be roughly 12.24 million metric tons, and this number is rapidly growing. This means that 1.224 million metric tons of crude glycerol was produced from the biodiesel conversion processes alone.

Biodiesel producers receive the used oil from the suppliers (for example a fast food chain) transform it into biofuel and gives it back to the same suppliers who pay for the service. Income also comes from products, such as glycerin.

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