ark s. NeWa. Octob ff 2-t?. 799 4. POTENTML FEEDSTOCK SUPP LY and COSTS for BIODD2SZL PRODUCTION Richard G. Nelson Steve A. Howell Kansas State University &iARc-IV Manhattan. KS Eucym, KS J. Alan Weber University of Missouri Columbiq M O AESTRACT Without considering technology constrain ts, tallows and waste greases ha ve defini te po;entiaI as feedstocks for the productio n ofbiodiesel in the United States. These materials are less expensive than most oils pro duced from oilseed crops such as soybeans, sunflowers , canoIa and rapeseed. At current crude petroleum prices, biodiesel deriv ed from any of these mater ials will be more expensive than diesel de rive d from petroleum, Iiowever, when compared to other clean burning alternate fue ls, recent data sugg ests biodiese l blends produced from any of thes e feedstocks may be the lowest total cost alternative fire1 in certain areas of the United Star es. Eccnomic feasibility analyses were perfo,,l. ed to investigate the co st of producing bicdiesel (S/gallon) subject to variances r, fcedstock cost, by-product credit (glycerol and meal) and capital costs. Cost of production ;ier gallon of esterified biodiese1 from soybe an, sunflower, tallow and yellow grease ranged f rom $0.96 to 33.39 subject to feedstock and chemicaI cos ts, by-product credit and syste m capital cost . 1. INTRODUCTION America n consum ers purchased ove r 47 b I !l’on gallons of distillate tief in 1992 of which on-highway diesel fue! use accoupte d for o ver 45% of all sales (ETA, 1993). Diesel tie1 cu,Tently accounts for nearly 20% of this 1 ation’s transportation energy, (Davis and Strang, 1993). Table 1 presen ts a breakdown of the tota l number of gallons consumed as a function of end-use (EIPL, 1993). Wz, as a nation, impon nearly 50% of ou r petrole um which results in a negative trade b&nce of approximately $50 billion per year. In addition there has been growing cocctm over the econom ic, cncrgctic and environmental aspects related to the use of f0;;il fuels a s a fue! source in combustion engines. 59
Without considering technology constraints, tallows and waste greases have definitepo;entiaI as feedstocks for the production ofbiodiesel in the United States. These
materials are less expensive than most oils produced from oilseed crops such as soybeans,sunflowers, canoIa and rapeseed. At current crude petroleum prices, biodiesel derived
from any of these materials will be more expensive than diesel derived from petroleum,
Iiowever, when compared to other clean burning alternate fuels, recent data suggests
biodiesel blends produced from any of these feedstocks may be the lowest total cost
alternative fire1 in certain areas of the United Stares.
Eccnomic feasibility analyses were perfo,,l.ed to investigate the cost of producing
bicdiesel (S/gallon) subject to variances r, fcedstock cost, by-product credit (glycerol and
meal) and capital costs. Cost of production ;ier gallon of esterified biodiese1 fromsoybean, sunflower, tallow and yellow grease ranged from $0.96 to 33.39 subject tofeedstock and chemicaI costs, by-product credit and system capital cost.
1. INTRODUCTION
American consumers purchased over 47 b I!l’on gallons of distillate tief in 1992 of which
on-highway diesel fue! use accoupted for over 45% of all sales (ETA, 1993). Diesel tie1cu,Tently accounts for nearly 20% of this 1ation’s transportation energy, (Davis and Strang,
1993). Table 1 presents a breakdown of the total number of gallons consumed as a
function of end-use (EIPL, 1993).
Wz, as a nation, impon nearly 50% of our petroleum which results in a negative trade
b&nce of approximately $50 billion per year. In addition there has been growingcocctm over the economic, cncrgctic and environmental aspects related to the use of
f0;;il fuels as a fue! source in combustion engines.
EnC-Use Category Fuel Conxunption( million @Ions )
% of Total
On-HighW2yResidendalCoizmerciaJFa.lX
RaiiroadIntiStrial
Vesel BunkeringOfXighwayM.C~
Oii Company
E!exic Utiliry
Ax other
21,375 45.23%
7,291 15.43%
3.771 7.98%
3,500 7.41%
3,173 6.71%
2,312 4.59%
2,219 4.70%
1,758 3.72%
653 1.38%
664 1.40%
541 1.14%
6 0.01%
T’GTAL 47,263 100.00%
Biodiesel, a diesel fuel substitute that can be produced from vegetable oils, fars and waste
cooking oils, has been demonstrated in unmodified diesel engines and has shown a
rezuction in the exhaust emissions of hydrocarbons, particulate matter, smoke, carbonmonoxide and sulfk. Use of agricultur~ly derived fuels and/or use of waste by-products
ficm the food industry has potential to ease our dependence upon imponed petroleum andat the same time provide a means of alleviating some of the economic and environmentalcsixens we face.
2. OBJI3XTWZS
The major objective of this study was to evaluate the feasibility of producing biodiesel
from soybeans, sunflowers, edible and inedible tallow and yellow grease. Specificobjectives were to:
I. Assess the resource available for each biodiesel feedstock in terms of productionand consumption as well as location of generation to determine potential biodiesel
production from each feedstock.
2. Evaluate the economic feasibility of producing biodiesel subject to cost sensitivitiesof feedstock and chemical price, by-product credit and capital cams.
3. R.ESOURCE ASSESS3IENT and PO’iINTlAL BIODIXSEL PRODUCTION
T:;e firs.1 objective of this study was to assess he production, consumption and location of
generation of selected biodiesel feedstocks. Potential biodiesel quantities from production
are detailed be!ow for each biodiesei feedsTock.
A. Edible. Inedible Tallow and Yellow Crease
Edible tallow s:atistics are taken from the United States Department of Agriculture -Economic Research Service (USDA-ERS) Oil Crops, Siruation and Odook Report
(1994) and data concerning inedible tallow was obtained from United States Departmentoi Commerce, Bureau of the Census M20K Reports (USDOC. 1992). Table 2 presentsdata concerning edible and inedible tallow, and waste grease.
b*:ost edible tailow is used as baking and frying fats, margarine and other edible products
and inedible tallow is mainly used as an arkA feed supplemenr(62.4%) with minor usesas fatty acid feedstock (22.4%). soaps and Iubricants. Yellow grease is defined as a
mixture of the waste oils and fats processed from waste grease discarded by Food servicecperations and a majority of yeilow grease is currently used as an added fat source for
animal feeds (64%), as a feedstock for industrial fatty acids (4%) or as ‘a dilutent for
higher grade inedible products (7%) with the remainder being exposed.
The majority of the nation’s tallow is generated in Nebraska, Kansas, Texas, Colorado,
Iowa, Wisconsin, Illinois, Wisconsin and Minnesota. While biodiesel derived from edibletallow production could prove significant in certain areas, its higher value as a foodsqplement would probably preclude its use. Biodiesel derived from inedible tallow and
greases has the si@Zicant potential in cercaio locations such as large cities (yellow grease)and possibly rural locations which are in c!ose proximity to large cattle slaughtering
ticiliries (inedible tallow).
E. Sovbean Oil
Sovbean oil statistics are derived from the USDA-ERS Oii Crops, Situation and OutlookRzporr (1994) and are also given in Table 2. Soybeans represent the most abundant and
agonomically adapted oilseed in the U.S. Soybeans are usually processed into twoproducts; oil and meal and, on average, a bushel wiil yield 11.8 and 47.5 pounds of oil and
meal, respectively. Soybean meal has become the standard of livestock protein markersz;.d the oil is used in many edible food products such as cooking oil, as well as for a
vtiety of industrial uses such as biodiesel.
Location of soybean supply can be analyzed from the standpoint of origination ofproduction or from location of soybean oil processing. Soybeans are processed mainly inihe regions where Ihey arc produced to minimize COSIS associated with transport and
t;lerefore, soybean crush location is highly correlated with the top soybem producingstates. In 1993, Illinois, Iowa, Indiana, Ohio, Minnesota and Mksouri represented states
with over 100 million bushe!s of production. Locating biodiesel production facilities inthese processing areas may offer sighiScai;i economic advantages.
From the above table, ifthe nearly 20 m&on acres of ARP and O-92 were to be used for
soybean production with an average yield of 35 bushels per acre, over 1.1 billion gallons
of biodiesel could be produced. However, it must be noted that the 16.3 million tons ofsoybean meal produced could represent a surplus in the protein marker and would directly
irqsct whether the biodiesel produced would be economically feasible.
4. ECONOMIC FEASIBLID' of BIODZESEL PRODUCTION
Wle use of biodiesel may provide signifiat environmental advantages (pollutant
emissions) when compared to the combusrion of conventional fossil f%els, the use of
biodiesel will primarily be driven by its economic feasibility versus other conventional and
aiternative rransponation fuels. The total economic analysis picture concerning biodieseI
proAction from fats, oils and greases includes production, processing (extrusion orrendering) and transenerification, Production and processing costs are usually included in
the feedstock cost as input to the transesteriZcation co3 analysis and are not presented as
a se?a.rare entity.
Trcnsesterification economics used in this study are based on the ANL Biomass Cost
Estimation Guide (Jaycor, 1987) which is presented in Table 4 for methyl talloware
production and contains both fixed and operating cost inputs. The transesterification unit
used in this analysis is based on technology advanced by DeSmet Corporation with capitalcosts of SO.403 per gallon for a 30 million gallon per year unit and an estimated caplralcost of $1 .OO per gallon for a 3 milhon gallon per year unit. This model predicts break-
even piice only, and does not inciude profit, taxes or transportation costs.
Cost sensitivity analyses were performed concerning the effect of feedstock and chemicalcost, by-product credit and unit size (gallons per year) on the production cost per gallon.
Costs per gallon ranged from a low of $0.96 per gallon at feedstock and chemical costs ofSO.13 pound and $0.40 per gallon respectively, a by-product credit of $0.50 per pound
and a capital cost of $0.403 per ester-iced gallon. Cost of production was a high of S3.39per gallon when feedstock and chemical co sts were SO.35 per pound and $1.20 per gallon,the by-product credit was $0.20 per pound and the capital cost was Sl.00 per esrerified
gallon. Feedstocks evaluated were soybean, sunflower, tallow and yellow grease.
Gven the current costs of petroleum and the oils and fats evaluated, it,does not appear
that biodizse1 wit1 be competitive with petroleum based diesel fuel on a price basis.Rawever, a recent study conducted by Booz, Allen and Han&on (1994) shows that whenccmpared to other altemacive fuels, biodiesel biends studied may be the lower cost
akemative fuel. This is due primarily to the ability of biodiesel to be used in anur,slodiried diesel engine and to be transponed and disrributed using existing
Table 4. ,QJL Eiomass Cost Estimation Guide timple for Methyi Tallavla~e (30 million gallon/y~)
A. Total Capital Cost
B. 2eaI Annual Capid Cast
c. operating c0sl.sraw mztterial fe&Xac!xmethanoluh.lysr
laboroverhad and fringe
clecuicity
5wm
ccmling waterpro-as water
tie1 for oil heat
mainfemnccinsurance
D. Sales and .4dministntion
E. Working Capital
F. Annualized Con of Working Capilal
By-Rcduct Credit
TOTAL COST per GALLON. break even
0.2 17 fixed charge
SO.13 per poundSO.55 per gallon
~2.00 per pound
50% of labor
23.5 kW-h/l. 1 tons
1155 pounds/l.1 tons
SO.30 per 1000 gallons
so.50 per 1000 gallons
SO.70 per gallon
2% of capital cost
1% of Upitai c0St
10 %ofB+C
l/l:! of B+C+D
12.5% ofE
s12,1oo,oOa
SZ.625,700
S33,988,8SO529.172.000
S2.123,30-0
S660,ooo
S240,OOO
5120,000
S176,250
s907.500
S19,600
51,700
s205,500
s2:2.000
s121.000
53,651.455
53347.167
SAl8.396
S6.344.800
534,239,600
Sl.14
i CONCLUSIONS
Soybean oil is by far the most abundant feedstock for biodiesel in the United States with
abnost 14 biCon pounds produced each year which representsa potential of over 1.8tillion gallons of biodiesel. At present, nearly al1 of the biodiesel produced in the United
States is made from soybean oi1. The use of beef tallows and waste frying oils have the
?xential of producing almost 900 miliio c gallons. These fats and greases are less
expensive than soybean oil, and could re?rssent an effective option to reduce the cost of
biodiesel as well as enending rhe supply &biodieseI.
SiodieseI break-men price, which does IX~. include profit, income or road taxes, or
;:ansport costs, ranged from SO.96 pe ~~:lon under the best conditions to 53 -39 under rhe
worst. By far, the mosr important factor was fee&to& cod, Plant size and glycerin by
;roduct value were of secondary concerr, but are still significmf factors. Alcohol
~~ aount of petroleum based diesel fixl consumed in the United Stares is much greater
aan the potential afbiodiesel from existing vegetable oiis, tdlOWS and waste greases.
&bough the to.st ofbiodiesel is more expensive when compared to petroleum diesel, thetotal costs ofbiodiesd blends may be the !owesr of,dI the akrnative fuels even under thewar;; cae biodie& price. These factors, combined with the cIeaner burning
cfiaraaefinics ofbiodjesel blends, suggest that biodiesel may best fit within defined areaswhere the use of&aner burning alternate Fuels are required, or where the other benefitsofbiodiese! are important.
6. Z-LD’ERENCES
Bocz, Al1e1-1nd Hamilton. 1994. Technical and Economic Assessmenl of Biodiesei forYehicular use. Presented to the National SoyDiesel Development Board, Jefferson City,MC.
Davis, Stacy C. and Sonja G. Strang. 1993. Transportation Energy Data Book: Edition13. Oak Ridge National Laboratory, Oak Ridge, ‘M.
Energy Information Administration. 1993 _ Fue I Oii and Kerosene Sales. U.S.De?artrnent of Energy, Washington, D.C.
Jaycor. 1987. Review of Cost Estimates for Two Transesterificarion Processes.
M&an, VA.
Xxional Sunflower Association. 1993, KS. Sunflower Crop QzraIiry Report. Bismarck
h3.
kited States Department of Agriculture. i994. Economic Research Service Oil Crops,Sli;lation and Outlook Report. OCS-40. Washington, D,C.
United States Depanment of Commerce, 1992. Bureau of the Census, M20K Reporrs.Washington, D.C.
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