The idea of using vegetable oil for fuel has been around as long as the diesel engine. Rudolph Diesel, the inventor of the engine that bears his name, experimented with fuels ranging from powdered coal to peanut oil.
In the early 20th century, diesel engines were adapted to burn petroleum distillate, which was cheap and plentiful. Gradually, however, the cost of petroleum distillate rose, and by the end of the 1970s there was renewed interest in biodiesel.
Commercial production of biodiesel in the United States began in the 1990s. The National Biodiesel Board reported production of 500,000 gallons in 1999 and 6.7 million gallons in 2000.
The most common sources of oil for biodiesel production in the United States are soybean oil and yellow grease (mostly recycled cooking oil from restaurants).
A recently released report from the Energy Information Administration (EIA), “Biodiesel Performance, Costs, and Use” examines the present and future of biodiesel.
By several measures, blends of biodiesel and petroleum diesel perform better than petroleum diesel alone, but the relatively high production costs of biodiesel and the limited availability of some of the raw materials used in its production continue to limit its commercial application.
Biodiesel Production and Costs. The feedstock cost of the oil or grease is the largest component of biodiesel production costs. Yellow grease is much less expensive than soybean oil, but its supply is limited.
A comparison of total production costs of diesel fuel by type of feedstock is shown in the table below.
The figures include energy costs and operating costs in addition to the cost of the raw materials. The petroleum diesel prices also include the cost of capital, but are still much lower than the biodiesel prices, which do not.
For the past several years, the Department of Agriculture has offered grants for biodiesel production through the Commodity Credit Corporation. The transportation bill passed by the Senate in February includes excise tax credits for biodiesel blending.
Projected Production Costs for Diesel Fuel by Feedstock,
2004-2013 (2002 Dollars per Gallon)
Year
Soybean
OilYellow
GreasePetroleum
2004-05
2.54
1.41
0.67
2005-06
2.49
1.39
0.78
2006-07
2.47
1.38
0.77
2007-08
2.44
1.37
0.78
2008-09
2.52
1.40
0.78
2009-10
2.57
1.42
0.75
2010-11
2.67
1.47
0.76
2011-12
2.73
1.51
0.76
2012-13
2.80
1.55
0.75
Source: Energy Information Administration.
Performance and Emissions
An important characteristic of diesel fuel is its ability to ignite on its own, as it must in a diesel engine. This ability is quantified by the fuel’s cetane number, where a higher cetane number means that the fuel ignites more quickly.
The cetane number for biodiesel ranges from about 46 to 57. In comparison, the cetane index for petroleum diesel ranges from 40 to 52. Thus biodiesel tends to ignite more easily.
Another important characteristic is lubricity. Fuel injectors and some types of fuel pumps rely on fuel for lubrication. Biodiesel has better lubricity than low-sulfur petroleum diesel or the ultra-low-sulfur petroleum diesel to be introduced in 2006.
However, the performance of biodiesel in cold conditions is markedly worse than petroleum diesel.
As well, the energy content per gallon of biodiesel is approximately 11 percent lower than petroleum diesel, and vehicles running on a biodiesel blend will achieve fewer miles per gallon of fuel.
The presence of oxygen in biodiesel improves combustion and reduces hydrocarbon, carbon monoxide, and particulate emissions, but it also increases nitrogen oxide emissions.
Biodiesel from virgin vegetable oil reduces carbon dioxide emissions and petroleum consumption when used in place of petroleum diesel, based on a life cycle analysis that accounts for resource consumption and emissions at all steps in the production and use of each fuel.
Demand Projections
The EIA estimates that demand for biodiesel will be at least 6.5 million gallons in 2010 and 7.3 million gallons in 2020.
These estimates are based on potential fleet demand for biodiesel to comply with the Energy Policy Act of 1992.
Based on biodiesel's potential as a lubricity additive, demand could reach as much as 470 million gallons in 2010 and 630 million gallons in 2020.
Conclusion
Biodiesel from yellow grease is closer to being cost-competitive with petroleum diesel than biodiesel from soybean oil, but the available supply of yellow grease will probably limit its use for biodiesel production.
Unless soybean oil prices decline dramatically, biodiesel will not be produced at a cost that is competitive with petroleum diesel.
The largest market for biodiesel probably will be as a fuel additive.
Markets may also develop in applications where reducing emissions of particulates and unburned hydrocarbons is paramount, such as school and transit buses.
For general information about energy, contact the
National Energy Information Center at 202-586-8800 or infoctr@eia.doe.govIf you are having technical problems with this website, contact the
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Questions about the report's content should be directed to:
- Anthony Radich, Office of Integrated Analysis and Forecasting
anthony.radich@eia.doe.gov
Phone: (202) 586-0504
URL: http://www.eia.doe.gov/emeu/plugs/plbiodsl.html
File last modified: August 26, 2004