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Biodiesel economics
The principal variable cost in biodiesel production is the value of the the oil feedstock. In economic models developed by northeast biofuels costings have been based on the following assumptions:
Raw material 100% Oilseed Rape
“Minimum till” farm cost basis
Biodiesel plant local to diesel blending
Solvent extraction (<1% residual oil)
Rape meal into both feed and fuel
Refined glycerine
Plant depreciation over 15 years
10% Return on capital employed
Using these assumptions the cost of biodiesel at the pump is built up as follows:
Based on an oilseed rape ex-farm value (4 year average) of £142/te
Cost of refined oil (after extraction) 29.5 pence/litre Cost of esterification 10.3 pence/litre Duty (after 20pence/litre reduction) 27.1 pence/litre Distribution costs 6.5 pence/litre VAT 12.8 pence/litre Total 86.2 pence/litre Fossil diesel price (UK avg. April 2004) 78.1 pence/litre Difference 8.1 pence/litre
Working together to establish renewable transport fuels in the Region
Northeast Biofuels is a division
of East Durham Biofuels Ltd Stable End
Hawthorn Village Seaham
Co Durham SR7 8SG
Copyright 2004
Registered Office: Camden House, Prince's Wharf, Teesdale, Stockton on Tees, TS17 6QY
Company Registered in England No: 5542440