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BIODIESEL: PROCESS ECONOMICSA K GuptaEx Scientist GIndian Institute of Petroleum, India
Introduction
Biodiesel is the name of a clean burning alternative fuel, produced from
domestic, renewable resources. Biodiesel contains no petroleum, but it can be
blended at any level with petroleum diesel to create a biodiesel blend. It can be
used in compression-ignition (diesel) engines with little or no modifications.
Biodiesel is simple to use, biodegradable, nontoxic, and essentially free of sulfur
and aromatics.
Biodiesel is produced from any fat or vegetable oil. The process involves areaction of the oil with an alcohol to remove the glycerin, which is a by-product of
biodiesel production. Fuel-grade biodiesel must be produced to strict industry
specifications.
Biodiesel can be used as a pure fuel or blended with petroleum in any
percentage. B20 (a blend of 20 percent by volume biodiesel with 80 percent by
volume petroleum diesel) has demonstrated significant environmental benefits
with a minimum increase in cost for fleet operations and other consumers.
The use of biodiesel in a conventional diesel engine results in substantial
reduction of unburned hydrocarbons, carbon monoxide, and particulate matter
compared to emissions from diesel fuel. In addition, the exhaust emissions of
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sulfur oxides and sulfates (major components of acid rain) from biodiesel are
essentially eliminated compared to diesel.
The use of biodiesel results in a substantial reduction of unburned hydrocarbons.
Emissions of nitrogen oxides are either slightly reduced or slightly increaseddepending on the duty cycle of the engine and testing methods used.
Biodiesel reduces net CO 2 emissions by more than 70 percent compared to
petroleum diesel. This is due to biodiesels closed carbon cycle. The CO 2
released into the atmosphere when biodiesel is burned is recycled by growing
plants, which are later processed into fuel. Is biodiesel safer than petroleum
diesel? Scientific research confirms that biodiesel exhaust has a less harmful
impact on human health than petroleum diesel fuel.
In general, the standard storage and handling procedures used for petroleum
diesel can be used for biodiesel.
Biodiesel can be operated in any diesel engine with little or no modification to the
engine or the fuel system. Biodiesel has a solvent effect that may release
deposits accumulated on tank walls and pipes from previous diesel fuel storage.
The release of deposits may clog filters initially and precautions should be taken.
Ensure only fuel meeting the biodiesel specification is used.
ECONOMIC FACTORS
Depending upon the price of feed vegetable oil presently, Biodiesel is 1.5 2
times costlier than petro-diesel; cost of vegetable oil accounts for about 75% cost
of production of biodiesel. Due to the higher cost biodiesel and biodiesel-diesel
blends have not penetrated the market. To have a greater impact on the IndianFarm/ Rural sector biodiesel may have to compete with petro-diesel. Availability
of non-edible vegetable oils, in large amounts, at reasonably lower price and
improvements in conversion technology would reduce the cost of biodiesel.
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Commercial Biodiesel Technologies
Currently used technologies for producing biodiesel can be classified into three
categories:
(i) Base catalyzed transesterification with refined oils
(ii) Base catalyzed transesterification with low fatty acid greases and fats
(iii) Acid esterification followed by transesterification of lower or high free
fatty acid fats and oils.
Other process under development include biocatalyzed transesterification,pyrolysis of vegetable oil/ seeds and transesterification in supercritical methanol.
The goal of all technologies is to produce fuel grade esters meeting standard
specifications (e.g. ASTM/ European/BIS). The key quality control issues involve
complete (or nearly complete) removal of alcohol, catalyst, water, soaps,
glycerine and unreacted or partially reacted triglycerides and free fatty acids
(FFA). Failure to remove these contaminants causes the biodiesel to fail one or
more fuel standards.
The basic process involves transesterification of vegetable oil/fats in presence of
a catalyst in batch or continuous mode. Continuous process may not be suitable,
if the variation in quality of feedstocks are wide.
There are numerous variations of basic technology:
Different catalysts e.g. NaOH, KOH, MeONa, Non alkaline catalysts,acids, metal complexes and bio catalysts etc. can be used.
Anhydrous ethanol, isopropanol or butanol can be substituted for
methanol.
Alcohols other than methanol may require additional process steps and
quality control.
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Basic transesterification is carried out at atmospheric pressure and
temperature around 60-70C.
Some technologies use higher temperatures and elevated pressure,
typically in super critical range of methanol.
For high FFA feedstocks acid catalysed esterification followed by base
catalysed transesterification is used or FFA can be removed first and the purified
oil is transesterified.
Majority of commercial processes use base catalysed reaction because it is most
economic for several reasons:
Low reaction temperature upto 100C and pressure up to 10 bar.
High conversion (~98%) and minimal side reactions and reaction time.
Direct conversion to methyl esters with no intermediates.
Exotic material of construction are not necessary.
Problems of Biodiesel Production
Both base and acid catalyzed processes are associated with several inherent
problems:
Free fatty acids interfere with transesterification deactivate the basic
catalysts loss of catalyst and biodiesel yield.
Water deactivates both basic and acidic catalysts. Drying of oil may be
required.
Soaps formed with basic catalyst form emulsion and foam and difficult toremove.
When processing feedstocks with high free fatty acids additional steps
must be taken.
After basic transesterification, the purification and adequate testing during
processing is required to produce fuel grade esters.
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Appropriate Technology
The selection of appropriate technology for production of biodiesel requires
careful selection of processing steps, catalyst and downstream process
integration. The quality of feed vegetable oil particularly FFA content plays and
important role in identifying the suitable technology.
The important factors to be considered include:
Must be able to process variety of vegetable oils without or minimum
modifications.Must be able to process high free fatty containing oils/ feedstocks.
Most of the non-edible oils available in India contains high FFA (2-12%)
For India non-edible oils obtained from plants which can be grown on
waste/ semi arid lands are more suitable. Species can be selected based on the
regional climatic conditions
Must be able to process raw both expelled and refined oil.
Process should be environment friendly almost zero effluents.
Able to produce marketable by products glycerine, fatty acids, soap if any.
Must be able to produce fuel grade esters; Biodiesel produced should
meet the standard specifications.
The process should be adaptable over a large range of production
capacities.
IIP Processes for Biodiesel India Institute of Petroleum has developed three processes for biodiesel from
non-edible oils and under exploited oils including Jatropha curcas, Pongamia,
Salvadora, Madhuca Indica and Mixed Oils.
Process I
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This process is suitable for feed stocks having FFA content >1% to about 20%.
The oil is pretreated before transesterification at moderate temperature (60-80C)
in presence of a base catalyst. FFA are also converted to biodiesel resulting in
higher yield of biodiesel. Pretreated oil is transesterified with methanol at
60-70C in presence of a base catalyst. Crude Biodiesel and glycerine are
separated and purified by distillation.
Main Features of IIP Process I
Flexibility for processing variety of vegetable oils separately or mixed
without any modification.
Tolerance of higher levels of free fatty acidsConversion of free fatty acids present in feed oils to biodiesel or
alternatively free fatty acids can be recovered as byproduct or soap.
Biodiesel produced meets the standard specification (ASTM, European or
proposed BIS).
Glycerine produced is ~ 99% pure.
Process can be adapted to wide range of production capacities.
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Crude glycerine Crude Biodiesel
GlycerineBiodiesel
Oil Pretreatment
Transesterification
Glycerinerefining
Refining
Methanolrecovery
Methanol +catalyst
Vegetable oil
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Figure 1: IIP Processes for Biodiesel Process
I
Process II
This process is suitable for feedstocks having FFA
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2. Transesterification runs
[A] Mode : batch without stirring
Temperature : ambient 10 25C
After separation of glycerin layer, biodiesel recovered by distillation,
bottoms recycled in next batch.
Vegetable Oil : Soya refined, Acid value ~ 1.0 mg KOH/g
Batch size : ~ 450 g (Fresh vegetable + recycle)
Solvent : Methyl ester of soya oil (10% of oil)
MeOH : Oil ratio : 4:1 (mole/mole)
Results Average of 7 consecutive runs
Conversion of oil : 99 + wt%
Yield of biodiesel : 97 wt%(based on oil fed)
[B] Jatropha curcas oil (Acid value 11.6 mg KOH/g)
Average of two runs
Conversion of oil : 92 %Yield of biodiesel : 84 wt%(based on oil )
By product Fatty acids
Note: This process allows simultaneous production of biodiesel and FFA
separation
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Glycerine separation
Biodiesel
Removal of FFA(Optional)
Transesterification
GlycerineBiodiesel
purificationSolvent
Recycle
Solvent
Oil Feed
MeOH + Catalyst
IIP PROCESS II
using solvent
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GENERAL COMMENTS ON PROCESS II
The studies carried out established the following:
- Transesterification, at ambient conditions, is feasible using the solvent
(Ester of fatty acids)
- Reaction proceeds well even at temperatures as low as 5-8C. Total
reaction and settling time 6-8 h. (depends upon temperature)
- No stirring is required; The reactant form a single phase, thus mass
transfer limitations are eliminated. Initial mixing of MeOH, oil, solvent and alkaliis however necessary.
- Experiments with various oils like soya refined oil, Jatropha curcas and
Mahua oil having upto acid no. 19.0 have been carried out.
- Vegetable oil containing FFA (acid no. upto about 12) could be processed
without any difficulty. At higher FFA the reactant mixture becomes viscous and
this hindered the separation of glycerin.
- NaOH/KOH suitable as catalyst.- Product separation and purification possible by distillation/ water washing.
Distillation preferred as it increased the yield of biodiesel, by converting recycled
distillation bottoms to biodiesel.
- If water washing is used additional step of biodiesel drying needed.
- Product biodiesel met the specifications.
- FFA, if present in oil is recovered as by product with glycerin.
- Process tested with fresh oil as well as with recycle of distillation bottoms
along with fresh oil in batch mode. 7 cycles of recycle have been tested.
Scale up issues
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Batch scale reactors may be large L/D tanks with external
circulating pump for initial mixing of reactants.
For larger plants continuous process may be desirable. (Feasibility
for continuous operation needs to be established). Static mixers /
CSTR followed by settlers.
Down stream separation steps can be designed using standard
available methods/ software packages.
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Figure 2: IIP Processes for Biodiesel Process
II
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Figure 3: IIP Processes for Biodiesel Process
II
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Process III
IIP heterogeneous Biodiesel Process
Indian Institute of Petroleum has developed a novel heterogenous catalyst and
process to produce biodiesel under a research programme partially funded by
The Department of Biotechnology. The process in ecofriendly and produces
biodiesel meeting the current International and National specifications.
This process is suited to feedstocks containing wide range of FFA or 100% FFA.
In this process esterification of FFA and transesterification of triglycerides is
carried out in a single step over a proprietary catalyst at moderate temperature
and pressure. The catalyst is recycled and glycerine is obtained as by product.
Biodiesel and glycerine are purified by distillation. The process is suitable for
producing both methyl or ethyl ester.
Table -1Comparison of Biodiesel produced by IIP Process with National &International Specifications
Characteristics ASTM-D6751-02
BIS,India
Jatropha CurcasMethyl Ester
Karanja OilMethyl Ester
Mahua OilMethyl Ester
Density, 15C, g/cc - 0.86-0.90 0.8887 0.98944 0.8808Kinematic Viscosity @ 40C cSt 1.9-6.0 3.5-5.0 4.55 5.07 5.13Flash Point, C, closed cup, min 130 120 135 174 150Sulfated Ash content Max., wt
%, max
0.02 0.02 0.008 0.002 0.002
Water content, mg/kg, max 500 500 250 200 275Sulphur max. mg/kg, max 50 50
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Acid Number, mgKOH/g, max 0.8 0.8 0.5 0.6 0.58Carbon residue, wt% max 0.05 0.05 0.013 0.025 0.014Cetane number, min -- 51 56.6 -- --Methanol, % mass, max - 0.20
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Esterification &
Transesterification
Methanol Recovery
Phase Separation
Glycerin Phase
Glycerin Refining
Glycerin
BiodieselPurification BIODIESEL
FreshVegetable Oil
FreshMethanol
RecycleMethanol
Figure 3 : Process Flow Scheme for Biodiesel ProductionHETREGENEOUS CATALYST
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Catalyst
The IIP process uses a unique heterogeneous catalyst which catalyses
transesterification and esterification simultaneously and provides improved
selectivity and unit flexibility and suppresses corrosion and by product formation.
No pretreatment of vegetable oil is necessary to remove FFA. The catalysts also
convert FFA into biodiesel.
Catalyst I Catalyst - II
Feedstocks
Vegetable oils having FFA content upto 5%. Methanol purity is normally at least
99.85 wt%, however oils with higher FFA can be readily processed and lower
purity methanol can be processed. Use of other alcohols e.g. Ethyl alcohol, Butyl
alcohol in place of methyl alcohol have been tested and established. The catalyst
also works with aqueous ethyl alcohol (azeotrope of EtOH-water)
Product & by product yields
Conversion of triglycerides and FFA is greater than 99%. Yields ester of over
98% based on Triglycerides and FFA present in the oil are obtained; unconverted
MeOH is recycled. The process is suited to feed stocks containing wide range of
FFA. The process can produce both methyl and ethyl esters. The reaction is
performed at higher temperature and pressure than in homogenous-catalysed
processes; excess alcohol is recovered by flash vaporization, glycerin isseparated in a settler and biodiesel is purified by distillation under vacuum.
Main Features of the process
Flexibility for processing variety of vegetable oils separately or mixed.
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Tolerance of higher levels of free fatty acids. Requires no pretreatment or
removal of FFA.
Conversion of free fatty acids present in feed oils to biodiesel
Tolerance of water in alcohol (aqueous ethanol can be used)
No emulsion or soap formation
Catalyst is recycled when operated in batch mode and is not deactivated
either with water or FFA.
Biodiesel produced meets the standard specification (ASTM, European or
proposed BIS).
Glycerin produced is ~ 99% pure
Process can be adapted to wide range of production capacities.
The process is ecofriendly with almost zero effluents.
Technological/ Economic Benefits
Use of heterogeneous catalyst has direct impact on the economics of biodiesel
production. Several neutralization and washing steps needed for processes using
homogeneous catalysts such as NaOH, KOH, MeONa etc. are eliminated. Cost
of alkali and associated waste streams are eliminated
Typical Results (Bench Scale, Catalyst I)
o Feed oil Jatropha Curcas Oil
Acid value : 11.6 mgKOH/gMoisture : 600-800 ppm
* oil was filtered before use; No pretreatment
o Alcohol Methanol (99.7%)Moisture : 0.2 wt%
Operating Conditions
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Oil to alcohol ratio : 1:10 mol/molCatalyst : 0.6 wt% of feed oil (fine powder, catalyst I )Reactor : 600ml stirred reactor (SS316)Mode of operation : Batch
o Unreacted methanol recovered by evaporation
o Glycerin separated in a settler
o Biodiesel recovered and purified by vac. Distillation
o Catalyst, recovered MeOH and unreacted/partially reacted vegetable oil
recycled.
Yields
o Average Biodiesel yield : 98% based on fresh oil (Expelled oil)
o Physico-chemical characteristics of Biodiesel conforms specifications
Typical Results (Bench scale, catalyst II)
Feed oil JC Oil Acid value : 13.0 mgKOH/g
Moisture : 600-800 ppm
Oil was filtered before use, no pretreatment
Alcohol Methanol (99.7%)
Moisture (0.2 wt%)
Operating Conditions
Oil to MeOH ratio : 1:10 mol/mol
Catalyst : 1 wt% of feed oil (fine powder)
Reactor : 600 ml stirred reactor (SS 316)
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Mode of Operation : Batch
Yields
Average biodiesel yield without recycle 88.0 wt% on oil
Continuous operation in Pilot Plant
Reactor : Fixed-bed, Externally heated; Down flow mode.
Material : SS-316
Catalyst : Catalyst II; extrudates; particle size (mesh 8 + 12)
Range of Operating Conditions
Temperature : 170 200Pressure : 15 25 kg/cm 2g
Vegetable oil flow rate : 60 135 g/h
Catalyst : 741 g
MeOH flow rate : mole ratio 10:1
Conversion (per pass) : 75 88%
Typical results
Temperature : 175C
Pressure : 22 kg/cm 2g
Oil flow rate (soya oil) : 125 g/h
Methanol/ oil ratio(mol) : 10:1
Conversion per pass : 86.8 wt% (without recycle)
(based on oil)
Aqueous Alcohol (Catalyst I)
Use of other alcohols e.g. Ethyl alcohol, Butyl alcohol in place of methyl alcohol
have been tested and established. The catalyst also works with aqueous ethyl
alcohol (azeotrope of EtOH-water)
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Typical Results
Alcohol : EtOH (with 8 wt% water)
Oil : JC oil
Mode of Operation : Batch
Yield of biodiesel without recycle : 70% based on oil
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Typical Results
Catalyst : Catalyst II, extrudates
2.7 wt% of oil
Alcohol : MeOH
Alcohol to oil ratio : 10:1 mol/mol
Mode of operation : Batch
Yield of biodiesel : 88 % based on oil
without recycle
Continuous Operational Data (Pilot Plant)
o Heterogenous catalyst : Catalyst II
(extrudates : 8+12 mesh)
o Reactor fixed bed : 1 diameter, SS-316
o Flow : Down Flow
o Catalyst loading : 470 g
o Vegetable oil & methanol premixed and preheated to 150-170C and fed
to reactor top.
o Same catalyst load used for 7 months
o Typical results :
Effect of operating parameters :
TemperatureC
Pressurekg/m2g
Flow ratemethanol g/hr
Flow rate veg.Oil g/hr
Conversion wt%/ of veg oil
175 23 43 80 74.7190 23 43 80 87.3190 23 43 80 87.8175 23 29 80 75.32175 23 29 80 79.75
Note : Actual conversion of vegetable oil Per pass is more than given in the table
above. The figures of conversion in the least column are actual yields of biodiesel
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obtained after distillation without recycle of unreacted tiglycerides. For evaluation
purposes, over all conversion may be taken as 99% with yield of biodiesel as
98% based on vegetable oil, as obtained in batch runs (data given above).
Batch Distillation Data
Liquid product obtained from the reactor bottom was separated into two layers.
The upper layer containing biodiesel and unreacted oil was distilled under
vacuum (2-3 mm Hg abs. Pressure) in a one plate distillation setup. Top product
(170-200C) was collected as biodiesel. Bottom temperature was 220C max.
Bottom recycled back to reactor.
BIODIESEL PROCESSES :Economic analysis
COST ESTIMATES
Biodiesel Plant (Process I) (Alkali Process with Pretreatment)
CASE I
Annual Capacity TPA (330 Days a Year)= 660 Cost Index Type: CE Cost Index Value
Fixed Capital, CFC 20027000.0Direct Plant Cost
Purchased Equipment, (E) 7000000.0Installation % E 25 1750000.0Instrumentation % E 10 700000.0
Electricals % E 10 700000.0Piping % E 25 1750000.0Building % E 18 1260000.0Yard improvement % E 10 700000.0Service Facilities %E 22 1540000.0
Boiler/Hot water system 3Cooling tower system 1.5
Tube well 1Generator 5
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Miscellaneous 1.5 Piping 25% of above 3
Land %E 6 420000.0Total Direct Plant Cost (DPC)= 15820000.0
Indirect Plant CostEng. & Supervision %E 10 700000Costruction Exp. % E 15 1050000Total DPC+above two =(B) 17570000.0Contractor fees %E 10 700000Contingency % B 10 1757000Total Erected Cost (CFC) 20027000.0
Working Capital 15% CFC or 70% E (Higher) 4900000
Total Capital Investment, CTC, Rs. 24927000.0
Manufacturing Expenses Rs./Yr Rs./ tonDirect
Raw Materials & Cat & ChemicalsBio Oil tons per year 1683.7Bio Oil cost Rs./ton 20000.0 33673469.4 20408.2Methanol tons per year 215.5Methanol Cost Rs./ton 10000.0 2155102.0 1306.1Catalyst tons per year 8.42Cat Cost Rs./ton 25000 210459.2 127.6
By-products Credit GlycerineGlycerine produced, ton/yr 121.22Glycerine Cost Rs./ton 54000 -6546122.4 -3967.3
Operating Labour (3 shifts, 4 men per shift, 3000 p.m/men) 432000.0 261.8
Supervisory & Clerical, 25% labour 108000.0 65.5Utilities 3300000.0 2000.0
ElectricityCooling water
Maintenance & repair (3% of DPC/annum) 822416.4 498.4Operating supplies (15% of maint. & repairs) 123362.5 74.8Laboratory Charges (15% optg labour) 64800.0 39.3Patents & Royalties (1% of total expenses) 171940.0 104.2
Total, ADME 34515427.0 20918.4
IndirectOverhead (payroll and plant packaging,
storage, 60% of sum of optg lab,supervision & maint) (Assumed nil) 0.0 0.0
Local Taxes (Nil) 0.0 0.0Insurance (0.5 % on DPC/ annum) 137069.4 83.1Interest on Capital (70% fixed capital loaned)
^@7.5% per annum 2267740.3 1374.4Total AIME 2404809.7 1457.5
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Total Manufacturing expenses, AME 36920236.7 22375.9Depreciation (10% of DPC), ABD 2741387.9 1661.4
General ExpensesAdministrative costs (15% sum of optg lab, 204362.5 123.9
supervision & maint)Total Expenses, AGE 39865987.0 24161.2
Manufacturing cost @Rs/kg 24.2Revenue from sales as @ Rs./kg 30.20 49832483.7 30201.5Net Annual Profit, ANP 9966496.7Income Tax (Assumed zero)Net profit after tax, ANNP 9966496.7After tax rate of return,
i=((ANNP+ABD)/CTC)*100 29.42Payout period, years 3.40
CASE II
Annual Capacity TPA (330 Days a Year)= 1650 Cost Index Type: CE Cost Index Value
Fixed Capital, CFC 34704029.4Direct Plant Cost
Purchased Equipment, (E) 12130034.8Installation % E 25 3032508.7Instrumentation % E 10 1213003.5Electricals % E 10 1213003.5Piping % E 25 3032508.7Building % E 18 2183406.3Yard improvement % E 10 1213003.5Service Facilities %E 22 2668607.6
Boiler/Hot water system 5.20
Cooling tower system 2.60 Tube well 1.73Generator 8.66 Miscellaneous 2.60 Piping 25% of above 5.20
Land %E 6 727802.1Total Direct Plant Cost (DPC)= 27413878.5
Indirect Plant CostEng. & Supervision %E 10 1213003.5
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Costruction Exp. % E 15 1819505.2Total DPC+above two =(B) 30446387.2Contractor fees %E 10 1213003.5Contingency % B 10 3044638.7Total Erected Cost (CFC) 34704029.4
Working Capital 15% CFC or 70% E (Higher) 8491024.3
Total Capital Investment, CTC, Rs. 43195053.8
Manufacturing Expenses Rs./Yr Rs./ tonDirect
Raw Materials & Cat & ChemicalsBio Oil tons per year 1683.7Bio Oil cost Rs./ton 20000.0 33673469.4 20408.2Methanol tons per year 215.5Methanol Cost Rs./ton 10000.0 2155102.0 1306.1Catalyst tons per year 8.42Cat Cost Rs./ton 25000 210459.2 127.6
By-products Credit GlycerineGlycerine produced, ton/yr 121.22Glycerine Cost Rs./ton 54000 -6546122.4 -3967.3
Operating Labour (3 shifts, 4 men per shift, 3000 p.m/men) 432000.0 261.8
Supervisory & Clerical, 25% labour 108000.0 65.5Utilities 3300000.0 2000.0
ElectricityCooling water
Maintenance & repair (3% of DPC/annum) 822416.4 498.4Operating supplies (15% of maint. & repairs) 123362.5 74.8Laboratory Charges (15% optg labour) 64800.0 39.3Patents & Royalties (1% of total expenses) 171940.0 104.2
Total, ADME 34515427.0 20918.4
IndirectOverhead (payroll and plant packaging,
storage, 60% of sum of optg lab,supervision & maint) (Assumed nil) 0.0 0.0
Local Taxes (Nil) 0.0 0.0Insurance (0.5 % on DPC/ annum) 137069.4 83.1Interest on Capital (70% fixed capital loaned)
^@7.5% per annum 2267740.3 1374.4Total AIME 2404809.7 1457.5
Total Manufacturing expenses, AME 36920236.7 22375.9Depreciation (10% of DPC), ABD 2741387.9 1661.4
General ExpensesAdministrative costs (15% sum of optg lab, 204362.5 123.9
supervision & maint)
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Total Expenses, AGE 39865987.0 24161.2Manufacturing cost @Rs/kg 24.2Revenue from sales as @ Rs./kg 30.20 49832483.7 30201.5Net Annual Profit, ANP 9966496.7Income Tax (Assumed zero)Net profit after tax, ANNP 9966496.7After tax rate of return,
i=((ANNP+ABD)/CTC)*100 29.42Payout period, years 3.40
CASE III
Annual Capacity TPA (330 Days a Year)= 3300 Cost Index Type: CE Cost Index Value
Fixed Capital, CFC 52601472.3Direct Plant Cost
Purchased Equipment, (E) 18385694.6Installation % E 25 4596423.7Instrumentation % E 10 1838569.5Electricals % E 10 1838569.5Piping % E 25 4596423.7Building % E 18 3309425.0Yard improvement % E 10 1838569.5Service Facilities %E 22 4044852.8
Boiler/Hot water system 7.88
Cooling tower system 3.94Tube well 2.63Generator 13.13Miscellaneous 3.94Piping 25% of above 7.88
Land %E 6 1103141.7Total Direct Plant Cost (DPC)= 41551669.9
Indirect Plant CostEng. & Supervision %E 10 1838569.5Costruction Exp. % E 15 2757854.2Total DPC+above two =(B) 46148093.5Contractor fees %E 10 1838569.5
Contingency % B 10 4614809.4Total Erected Cost (CFC) 52601472.3
Working Capital 15% CFC or 70% E (Higher) 12869986
Total Capital Investment, CTC, Rs. 65471458.6
Manufacturing Expenses Rs./Yr Rs./ ton
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DirectRaw Materials & Cat & Chemicals
Bio Oil tons per year 3367.3Bio Oil cost Rs./ton 20000.0 67346938.8 20408.2Methanol tons per year 431.0Methanol Cost Rs./ton 10000.0 4310204.1 1306.1Catalyst tons per year 16.84Cat Cost Rs./ton 25000 420918.4 127.6
By-products Credit GlycerineGlycerine produced, ton/yr 242.45Glycerine Cost Rs./ton 54000 -13092244.9 -3967.3
Operating Labour (3 shifts, 4 men per shift, 3000 p.m/men) 432000.0 130.9
Supervisory & Clerical, 25% labour 108000.0 32.7Utilities 6600000.0 2000.0
ElectricityCooling water
Maintenance & repair (3% of DPC/annum) 1246550.1 377.7Operating supplies (15% of maint. & repairs) 186982.5 56.7Laboratory Charges (15% optg labour) 64800.0 19.6Patents & Royalties (1% of total expenses) 171940.0 52.1
Total, ADME 67796088.9 20544.3
IndirectOverhead (payroll and plant packaging,
storage, 60% of sum of optg lab,supervision & maint) (Assumed nil) 0.0 0.0
Local Taxes (Nil) 0.0 0.0Insurance (0.5 % on DPC/ annum) 207758.3 63.0Interest on Capital (70% fixed capital loaned)
^@7.5% per annum 3437251.6 1041.6Total AIME 3645009.9 1104.5
Total Manufacturing expenses, AME 71441098.9 21648.8Depreciation (10% of DPC), ABD 4155167.0 1259.1
General ExpensesAdministrative costs (15% sum of optg lab, 267982.5 81.2
supervision & maint)Total Expenses, AGE 75864248.4 22989.2
Manufacturing cost @Rs/kg 23.0Revenue from sales as @ Rs./kg 28.74 94830310.5 28736.5Net Annual Profit, ANP 18966062.1Income Tax (Assumed zero)Net profit after tax, ANNP 18966062.1After tax rate of return,
i=((ANNP+ABD)/CTC)*100 35.31Payout period, years 2.83
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OST ESTIMATES
Biodiesel Plant (Process II) (Solvent Process)
CASE I
Annual Capacity TPA (330 Days a Year)= 660 Cost Index Type: CE Cost Index Value
Fixed Capital, CFC 15039900.0Direct Plant Cost
Purchased Equipment, (E) 5100000.0Installation % E 25 1275000.0Instrumentation % E 10 510000.0Electricals % E 10 510000.0Piping % E 25 1275000.0
Building % E 18 918000.0Yard improvement % E 10 510000.0Service Facilities %E 30 1530000.0
Boiler/Hot water system 3.00 Cooling tower system 1.50
Tube well 1.00 Generator 5.00 Miscellaneous 1.50 Piping 25% of above 3.00
Land %E 6 306000.0Total Direct Plant Cost (DPC)= 11934000.0
Indirect Plant Cost
Eng. & Supervision %E 10 510000.0Costruction Exp. % E 15 765000.0Total DPC+above two =(B) 13209000.0Contractor fees %E 10 510000.0Contingency % B 10 1320900.0Total Erected Cost (CFC) 15039900.0
Working Capital 15% CFC or 70% E (Higher) 3570000
Total Capital Investment, CTC, Rs. 18609900.0
Manufacturing Expenses Rs./Yr Rs./ ton
DirectRaw Materials & Cat & Chemicals
Bio Oil tons per year 673.5Bio Oil cost Rs./ton 20000.0 13469387.8 20408.2Methanol tons per year 86.2Methanol Cost Rs./ton 10000.0 862040.8 1306.1Catalyst tons per year 3.37Cat Cost Rs./ton 25000 84183.7 127.6
By-products Credit Glycerin
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CASE - II
Annual Capacity TPA (330 Days a Year)= 1650 Effective Date to which estimate applies Jun-04
Cost Index Type: CE Cost Index Value
Fixed Capital, CFC 26062072.8Direct Plant Cost
Purchased Equipment, (E) 8837596.8Installation % E 25 2209399.2Instrumentation % E 10 883759.7Electricals % E 10 883759.7Piping % E 25 2209399.2Building % E 18 1590767.4Yard improvement % E 10 883759.7Service Facilities %E 30 2651279.0
Boiler/Hot water system 5.20 Cooling tower system 2.60
Tube well 1.73Generator 8.66 Miscellaneous 2.60 Piping 25% of above 5.20
Land %E 6 530255.8Total Direct Plant Cost (DPC)= 20679976.4
Indirect Plant CostEng. & Supervision %E 10 883759.7Costruction Exp. % E 15 1325639.5Total DPC+above two =(B) 22889375.6Contractor fees %E 10 883759.7Contingency % B 10 2288937.6Total Erected Cost (CFC) 26062072.8
Working Capital 15% CFC or 70% E (Higher) 6186317.7
Total Capital Investment, CTC, Rs. 32248390.5Manufacturing Expenses Rs./Yr Rs./ ton
DirectRaw Materials & Cat & Chemicals
Bio Oil tons per year 1683.7Bio Oil cost Rs./ton 20000.0 33673469.4 20408.2Methanol tons per year 215.5Methanol Cost Rs./ton 10000.0 2155102.0 1306.1Catalyst tons per year 8.42Cat Cost Rs./ton 25000 210459.2 127.6
By-products Credit GlycerineGlycerine produced, ton/yr 121.22Glycerine Cost Rs./ton 54000 -6546122.4 -3967.3
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Operating Labour (3 shifts, 4 men per shift, 3000 p.m/men) 432000.0 261.8
Supervisory & Clerical, 25% labour 108000.0 65.5Utilities 2475000.0 1500.0
ElectricityCooling water
Maintenance & repair (3% of DPC/annum) 620399.3 376.0Operating supplies (15% of maint. & repairs) 93059.9 56.4Laboratory Charges (15% optg labour) 64800.0 39.3Patents & Royalties (1% of total expenses) 171940.0 104.2
Total, ADME 33458107.3 20277.6
IndirectOverhead (payroll and plant packaging,
storage, 60% of sum of optg lab,supervision & maint) (Assumed nil) 0.0 0.0
Local Taxes (Nil) 0.0 0.0Insurance (0.5 % on DPC/ annum) 103399.9 62.7Interest on Capital (70% fixed capital loaned)
^@7.5% per annum 1693040.5 1026.1Total AIME 1796440.4 1088.8
Total Manufacturing expenses, AME 35254547.7 21366.4Depreciation (10% of DPC), ABD 2067997.6 1253.3
General ExpensesAdministrative costs (15% sum of optg lab, 174059.9 105.5
supervision & maint)Total Expenses, AGE 37496605.3 22725.2
Manufacturing cost @Rs/kg 22.7Revenue from sales as @ Rs./kg 28.41 46870756.6 28406.5Net Annual Profit, ANP 9374151.3Income Tax (Assumed zero)Net profit after tax, ANNP 9374151.3After tax rate of return,
i=((ANNP+ABD)/CTC)*100 35.48Payout period, years 2.82
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CASE III
Annual Capacity TPA (330 Days a Year)= 3300 Effective Date to which estimate applies Jun-04
Cost Index Type: CE Cost Index Value
Fixed Capital, CFC 39502715.5Direct Plant Cost
Purchased Equipment, (E) 13395291.8Installation % E 25 3348823.0Instrumentation % E 10 1339529.2Electricals % E 10 1339529.2Piping % E 25 3348823.0Building % E 18 2411152.5Yard improvement % E 10 1339529.2Service Facilities %E 30 4018587.5
Boiler/Hot water system 7.88 Cooling tower system 3.94
Tube well 2.63Generator 13.13Miscellaneous 3.94Piping 25% of above 7.88
Land %E 6 803717.5Total Direct Plant Cost (DPC)= 31344982.8
Indirect Plant CostEng. & Supervision %E 10 1339529.2Costruction Exp. % E 15 2009293.8Total DPC+above two =(B) 34693805.8Contractor fees %E 10 1339529.2Contingency % B 10 3469380.6Total Erected Cost (CFC) 39502715.5
Working Capital 15% CFC or 70% E (Higher) 9376704.3
Total Capital Investment, CTC, Rs. 48879419.8
Manufacturing Expenses Rs./Yr Rs./ ton
DirectRaw Materials & Cat & Chemicals
Bio Oil tons per year 3367.3Bio Oil cost Rs./ton 20000.0 67346938.8 20408.2Methanol tons per year 431.0Methanol Cost Rs./ton 10000.0 4310204.1 1306.1Catalyst tons per year 16.84Cat Cost Rs./ton 25000 420918.4 127.6
By-products Credit Glycerine
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Glycerine produced, ton/yr 242.45Glycerine Cost Rs./ton 54000 -13092244.9 -3967.3
Operating Labour (3 shifts, 4 men per shift, 3000 p.m/men) 432000.0 130.9
Supervisory & Clerical, 25% labour 108000.0 32.7Utilities 4950000.0 1500.0
ElectricityCooling water
Maintenance & repair (3% of DPC/annum) 940349.5 285.0Operating supplies (15% of maint. & repairs) 141052.4 42.7Laboratory Charges (15% optg labour) 64800.0 19.6Patents & Royalties (1% of total expenses) 171940.0 52.1
Total, ADME 65793958.2 19937.6
IndirectOverhead (payroll and plant packaging,
storage, 60% of sum of optg lab,supervision & maint) (Assumed nil) 0.0 0.0
Local Taxes (Nil) 0.0 0.0Insurance (0.5 % on DPC/ annum) 156724.9 47.5Interest on Capital (70% fixed capital loaned)
^@7.5% per annum 2566169.5 777.6Total AIME 2722894.5 825.1
Total Manufacturing expenses, AME 68516852.7 20762.7Depreciation (10% of DPC), ABD 3134498.3 949.8
General ExpensesAdministrative costs (15% sum of optg lab, 222052.4 67.3
supervision & maint)Total Expenses, AGE 71873403.4 21779.8
Manufacturing cost @Rs/kg 21.8Revenue from sales as @ Rs./kg 27.22 89841754.2 27224.8Net Annual Profit, ANP 17968350.8Income Tax (Assumed zero)Net profit after tax, ANNP 17968350.8After tax rate of return,
i=((ANNP+ABD)/CTC)*100 43.17Payout period, years 2.32
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COST ESTIMATES
Biodiesel Plant (Process III) (Heterogeneous Catalyst)
CASE I
Annual Capacity TPA (330 Days a Year)= 660 Cost Index Type: CE Cost Index Value
Fixed Capital, CFC 17284750.0Direct Plant Cost
Purchased Equipment, (E) 5950000.0Installation % E 25 1487500.0
Instrumentation % E 10 595000.0Electricals % E 10 595000.0Piping % E 25 1487500.0Building % E 18 1071000.0Yard improvement % E 10 595000.0Service Facilities %E 26 1547000.0
Boiler/Hot water system 3Cooling tower system 1.5
Tube well 1Generator 5 Miscellaneous 1.5 Piping 25% of above 3
Land %E 6 357000.0Total Direct Plant Cost (DPC)= 13685000.0
Indirect Plant CostEng. & Supervision %E 10 595000Costruction Exp. % E 15 892500Total DPC+above two =(B) 15172500.0Contractor fees %E 10 595000Contingency % B 10 1517250Total Erected Cost (CFC) 17284750.0
Working Capital 15% CFC or 70% E (Higher) 4165000
Total Capital Investment, CTC, Rs. 21449750.0
Manufacturing Expenses Rs./Yr Rs./ tonDirect
Raw Materials & Cat & ChemicalsBio Oil tons per year 673.5Bio Oil cost Rs./ton 20000.0 13469387.8 20408.2Methanol tons per year 86.2
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CASE II
Annual Capacity TPA (330 Days a Year)= 1650 Effective Date to which estimate applies Jun-04
Cost Index Type: CE Cost Index Value
Fixed Capital, CFC 29952088.3Direct Plant Cost
Purchased Equipment, (E) 10310529.5Installation % E 25 2577632.4Instrumentation % E 10 1031053.0Electricals % E 10 1031053.0Piping % E 25 2577632.4Building % E 18 1855895.3Yard improvement % E 10 1031053.0Service Facilities %E 26 2680737.7
Boiler/Hot water system 5.20 Cooling tower system 2.60
Tube well 1.73Generator 8.66 Miscellaneous 2.60 Piping 25% of above 5.20
Land %E 6 618631.8Total Direct Plant Cost (DPC)= 23714217.9
Indirect Plant CostEng. & Supervision %E 10 1031053.0Costruction Exp. % E 15 1546579.4Total DPC+above two =(B) 26291850.3Contractor fees %E 10 1031053.0Contingency % B 10 2629185.0Total Erected Cost (CFC) 29952088.3
Working Capital 15% CFC or 70% E (Higher) 7217370.7
Total Capital Investment, CTC, Rs. 37169459.0
Manufacturing Expenses Rs./Yr Rs./ tonDirect
Raw Materials & Cat & ChemicalsBio Oil tons per year 1683.7Bio Oil cost Rs./ton 20000.0 33673469.4 20408.2Methanol tons per year 215.5Methanol Cost Rs./ton 10000.0 2155102.0 1306.1Catalyst tons per year 0.10Cat Cost Rs./ton 500000 50510.2 30.6
By-products Credit GlycerineGlycerine produced, ton/yr 121.22
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Glycerine Cost Rs./ton 54000 -6546122.4 -3967.3Operating Labour
(3 shifts, 4 men per shift, 3000 p.m/men) 432000.0 261.8Supervisory & Clerical, 25% labour 108000.0 65.5Utilities 2805000.0 1700.0
ElectricityCooling water
Maintenance & repair (3% of DPC/annum) 711426.5 431.2Operating supplies (15% of maint. & repairs) 106714.0 64.7Laboratory Charges (15% optg labour) 64800.0 39.3Patents & Royalties (1% of total expenses) 171940.0 104.2
Total, ADME 33732839.7 20444.1
IndirectOverhead (payroll and plant packaging,
storage, 60% of sum of optg lab,supervision & maint) (Assumed nil) 0.0 0.0
Local Taxes (Nil) 0.0 0.0Insurance (0.5 % on DPC/ annum) 118571.1 71.9Interest on Capital (70% fixed capital loaned)
^@7.5% per annum 1951396.6 1182.7Total AIME 2069967.7 1254.5
Total Manufacturing expenses, AME 35802807.4 21698.7Depreciation (10% of DPC), ABD 2371421.8 1437.2
General ExpensesAdministrative costs (15% sum of optg lab, 187714.0 113.8
supervision & maint)Total Expenses, AGE 38361943.2 23249.7
Manufacturing cost @Rs/kg 23.2Revenue from sales as @ Rs./kg 29.06 47952429.0 29062.1Net Annual Profit, ANP 9590485.8Income Tax (Assumed zero)Net profit after tax, ANNP 9590485.8After tax rate of return,
i=((ANNP+ABD)/CTC)*100 32.18Payout period, years 3.11
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CASE III
Annual Capacity TPA (330 Days a Year)= 3300 Effective Date to which estimate applies Jun-04
Cost Index Type: CE Cost Index Value
Fixed Capital, CFC 44711251.5Direct Plant Cost
Purchased Equipment, (E) 15627840.4Installation % E 25 3906960.1Instrumentation % E 10 1562784.0Electricals % E 10 1562784.0Piping % E 25 3906960.1Building % E 18 2813011.3Yard improvement % E 10 1562784.0Service Facilities %E 22 3438124.9
Boiler/Hot water system 7.88 Cooling tower system 3.94
Tube well 2.63Generator 13.13Miscellaneous 3.94Piping 25% of above 7.88
Land %E 6 937670.4Total Direct Plant Cost (DPC)= 35318919.4
Indirect Plant CostEng. & Supervision %E 10 1562784.0Costruction Exp. % E 15 2344176.1Total DPC+above two =(B) 39225879.5Contractor fees %E 10 1562784.0Contingency % B 10 3922587.9Total Erected Cost (CFC) 44711251.5
Working Capital 15% CFC or 70% E (Higher) 10939488
Total Capital Investment, CTC, Rs. 55650739.8
Manufacturing Expenses Rs./Yr Rs./ tonDirect
Raw Materials & Cat & ChemicalsBio Oil tons per year 3367.3Bio Oil cost Rs./ton 20000.0 67346938.8 20408.2Methanol tons per year 431.0Methanol Cost Rs./ton 10000.0 4310204.1 1306.1Catalyst tons per year 0.20Cat Cost Rs./ton 500000 101020.4 30.6
By-products Credit GlycerineGlycerine produced, ton/yr 242.45Glycerine Cost Rs./ton 54000 -13092244.9 -3967.3
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Operating Labour (3 shifts, 4 men per shift, 3000 p.m/men) 432000.0 130.9
Supervisory & Clerical, 25% labour 108000.0 32.7Utilities 6600000.0 2000.0
ElectricityCooling water
Maintenance & repair (3% of DPC/annum) 1059567.6 321.1Operating supplies (15% of maint. & repairs) 158935.1 48.2Laboratory Charges (15% optg labour) 64800.0 19.6Patents & Royalties (1% of total expenses) 171940.0 52.1
Total, ADME 67261161.1 20382.2
IndirectOverhead (payroll and plant packaging,
storage, 60% of sum of optg lab,supervision & maint) (Assumed nil) 0.0 0.0
Local Taxes (Nil) 0.0 0.0Insurance (0.5 % on DPC/ annum) 176594.6 53.5Interest on Capital (70% fixed capital loaned)
^@7.5% per annum 2921663.8 885.4Total AIME 3098258.4 938.9
Total Manufacturing expenses, AME 70359419.5 21321.0Depreciation (10% of DPC), ABD 3531891.9 1070.3
General ExpensesAdministrative costs (15% sum of optg lab, 239935.1 72.7
supervision & maint)Total Expenses, AGE 74131246.6 22464.0
Manufacturing cost @Rs/kg 22.5Revenue from sales as @ Rs./kg 28.08 92664058.2 28080.0Net Annual Profit, ANP 18532811.6Income Tax (Assumed zero)Net profit after tax, ANNP 18532811.6After tax rate of return,
i=((ANNP+ABD)/CTC)*100 39.65Payout period, years 2.52
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Effect of Capacity on Economics
IIP Process - I
ItemCapacity, TPD
2.0 5.0 10.0
Capital Investment (Rs. Crore)
- Plant & Machinery (Rs. Crore)
- Working Capital (Rs. Crore)
2.49
2.00
0.49
4.32
3.47
0.85
6.55
5.26
1.29
Processing cost (Rs./kg biodiesel) 6.61 4.2 3.0
Payout Period (years) at 25% Profit 4.17 3.4 2.83
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TABLE 3B :
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Effect of Capacity on Economics
IIP Process - II
ItemCapacity of Plant, TPD
2.0 5.0 10.0
Capital Investment (Rs. Crore)
- Plant & Machinery (Rs. Crore)
- Working Capital (Rs. Crore)
2.15
1.73
0.42
3.72
3.00
0.72
5.56
4.47
1.09Processing cost (Rs./kg biodiesel) 5.47 3.20 2.50Payout Period (years) at 25% Profit 3.85 3.11 2.52
TABLE 3C :
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Effect of Capacity on Economics
IIP Process - III
Item
Capacity of Plant, TPD
2.0 5.0 10.0
Capital Investment (Rs. Crore)
- Plant & Machinery (Rs. Crore)
- Working Capital (Rs. Crore)
1.86
1.50
0.36
3.22
2.61
0.61
4.89
3.95
0.94Processing cost (Rs./kg biodiesel) 4.76 2.70 1.80Payout Period (years) at 25% Profit 3.53 2.82 2.32
Economics
Based on IIP processes, for a 2 TPD biodiesel plant the capital investment andproduction cost were estimated and summarized in Table-2. The cost analysis
indicates that cost of oil is major component (about 75-90%) of total cost of biodiesel.
Use of lower cost feedstocks would have tremendous impact on the biodiesel
economics. Another approach which leads to reduction in operating cost is
improvement in technology; this is clearly indicated for the improved IIPs Processes
II and III.
The capacity of production affected the processing cost (Table 3a, 3b, 3c). At 10
TPD capacity for process II and III the processing cost reduce to Rs. 2.50 and Rs.
1.80 per kg biodiesel respectively.
14