A PROCESS MODEL TO ESTIMATE BIODIESEL PRODUCTION COSTS

Authors: Haas, Michael; McAloon, Andrew; Yee, Winnie; Foglia, Thomas

Submitted to: Bioresource Technology
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 3/17/2005
Publication Date: 1/1/2006
Citation: Haas, M.J., Mcaloon, A.J., Yee, W.C., Foglia, T.A. 2006. A process model to estimate biodiesel production costs. Bioresource Technology. 97:671-678.

Interpretive Summary: 'Biodiesel' is the name given to a renewable diesel fuel that can be produced from vegetable oils, animal fats and waste greases. Decades of research have shown that biodiesel can substitute for diesel fuel produced from fossil fuels without compromising engine performance or durability. Biodiesel does, however, cause significant reductions in the emission of the recognized and Federally regulated pollutants hydrocarbons, particulates and carbon monoxide. Thus there is a great deal of interest in the widespread adoption of biodiesel as an engine fuel. Also, since it is produced from agricultural fats and oils, which are produced in this country, biodiesel offers an opportunity to enhance rural economies and farm income. Biodiesel production is rapidly increasing to meet the growing demand. Old production plants are being expanded, and new ones are being constructed. To decide on the wisdom of such an endeavor, managers must make decisions regarding the types of feedstock, chemical processes and equipment to install. To assist in these evaluations we have developed a computer model that contains all elements of a contemporary plant for the production of biodiesel from soybean oil, the predominant feedstock for US biodiesel production. This model allows one to predict the cost of constructing a production plant and the per gallon cost of its product. It also allows prediction of the effects on the biodiesel production cost of changes in the cost of the feedstock and in the market value of glycerol, a coproduct of biodiesel synthesis. By employing this model, the costs of construction and production, as well as the impacts of changes in feedstock price and chemical process can be assessed, thus providing useful information to a fledgling industry.

Technical Abstract: 'Biodiesel' is the name given to a renewable diesel fuel that is produced from fats and oils. It consists of the simple alkyl esters of fatty acids, most typically the methyl esters. Biodiesel is presently undergoing a shift to commercial reality, with large annual increases in production being realized. Growth is predicted to continue. To further the development of biodiesel, we have developed a computer model to estimate the capital and operating costs of a moderately-sized industrial biodiesel production facility. The major process operations in the plant were continuous-process vegetable oil transesterification, and ester and glycerol recovery. The model was designed using contemporary process simulation software, and current reagent, equipment and supply costs, following current production practices. Crude, degummed soybean oil was specified as the feedstock. Annual production capacity of the plant was set at 37,854,118 liters (10 X 10 exp 6 gal). Facility construction costs were calculated to be US$11.5 million. The largest contributors to the equipment cost, accounting for nearly one third of expenditures, were storage tanks to contain a 25 day capacity of feedstock and product. At a value of US$0.52/kg ($0.236/lb) for feedstock soybean oil, a biodiesel production cost of US$0.53/l ($1.99/gal) was predicted. The single greatest contributor to this value was the cost of the oil feedstock, which accounted for 88% of total estimated production costs. An analysis of the dependence of production costs on the cost of the feedstock indicated a direct linear relationship between the two, with a change of US$0.020/l ($0.075/gal) per US$0.022/kg ($0.01/lb) change in oil cost. Process economics included the recovery of coproduct glycerol generated during biodiesel production, and its sale into the commercial glycerol market as an 80% w/w aqueous solution, which reduced production costs by approximately 6%. The production cost of biodiesel was found to vary inversely and linearly with variations in the market value of glycerol, increasing by US$0.0022/l ($0.0085/gal) for every US$0.022 /kg ($0.01/lb) reduction in glycerol value. The model is flexible in that it can be modified to calculate the effects on capital and production costs of changes in feedstock cost, changes in the type of feedstock employed, changes in the value of the glycerol coproduct, and changes in process chemistry and technology.