News and information about Biodiesel & alternative fuels.

2008/07/30

Why is biodiesel so expensive in California?

Ben Jordan enlightens us at BeyondChron (it's almost $6/gallon), here's a snippet:
Biodiesel will become cheaper than petroleum diesel but it won't be because the price of biodiesel goes down. This change will occur because the price of petroleum will continue to rise. A good place to start to understand some of the factors that affect the price per gallon of biodiesel is to ask where does your fuel come from? Was it locally produced or did it travel across the country or around the world by train, truck, or ship? What is your fuel made from: virgin soy bean, corn, canola, tropical palm oil, rendered animal tallow or waste vegetable oil and inedible kitchen grease?

The base cost of each gallon of biodiesel is the sum of raw materials costs (vegetable or animal oil feedstock, methanol, catalyst, heat), market influences of supply and demand, and taxes. Additional items that affect the final cost are transportation, distribution, permits, state regulation, and consistent quality assurance of the fuel.
Thanks Ben!

16 comments:

  1. I have been really disappointed in California pricing lately. We deliver to various entertainment sources, and frankly, the price has been embarrassing. We are working with producers to increase supply. There needs to be more competition in the area.

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  2. The market for biofuels in Europe has been a legislation-driven market. However, it now looks as if it will be the sustainability criteria that will be most important for the biofuels industry. Only quality biofuels, ie those that do not damage the environment or cause social problems such as contributing to raising food prices will be able to sell at a premium price.

    Here's a free report, "The European Biofuels Challenge - Developments in European Union Policy and Industry Drivers" which is available at http://www.reportbuyer.com/go/RBY00011

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  3. We need legislation on the regulation of bio fuels !! if our taxes subsidized the bio diesel plants already in operation in California, Bakersfield and Southern California, the price would go down. If regulation would force the big rigs, diesel cars, and buses, etc to run on bio-diesel the production would have to increase and the cost go down and better air quality in California. Fight for this type of legistation !!!!

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  4. did i forget to add that many bio-deisel plants are committed to using only recycled waste vegetable oil

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  5. I live in the SouthEast US and used to buy biodiesel (B100) made from poultry fat from processing plants in North Georgia. It was consistently $.15/gallon cheaper than diesel. Unfortunately, companies from China now purchase every bit of rendered poultry fat and pay a processor in Rome, GA to make it into biodiesel and ship it by the container load to China. Now I have to pay a premium for biodiesel produced from virgin soy oil. This one disadvantage of letting the free market set the price and availability of fuel.
    - Veggie Ranger
    www.greasology.org

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  6. This has been a very big challenge for a lot of our customers. I have seen several small business and start ups fall short in California.
    There is only a handful of manufacturing facilities that we have been involved with that are still cash flow positive.

    http://storagetanks.wordpress.com/

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  7. Pricing is an issue of sensitivity for everyone. Consumers base much of their decisions, and purchase behavior, on pricing and perceived differences in the fuel. Distributors are faced with the task of ensuring appropriate and scaleable delivery infrastructure and supply, while maintaining margins that allow for sustainability.
    Finally, producers are faced with scarcity of preferred feedstocks, varied commodity pricing, and the challenges of commodity hedging to mitigate risk.

    I agree in part with Ben Jordan's comments that increases in the cost of petroleum-based diesel may assist the public in recognizing the comparative affordability of biodiesel over the long term.

    In the short term, devaluations in the dollar may make both products appear more expensive when compounded by the pressure many production companies are under to eek out profits in bad economic times.

    We shall see....

    Todd
    http://prometheanbiofuels.com
    http://prometheanbiofuels.com/blog/

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  8. I live in the LA area of CA, and I've noticed how expensive it has become too.

    Joshua - http://biodiesel-processors.com

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  9. I live in Oregon and have been getting biodiesel from a company that uses recycled veggie oil. The price has gone from $3.36 2 years ago to $5.39. One thing I heard was that Shari's and McDonald's, the sources of the veggie oil have started charging for it. I'm really annoyed!

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  10. A good place to start to understand some of the factors that affect the price per gallon of biodiesel .It was it locally produced or did it travel across the country or around the world by train, truck, and ship.

    ------------------

    jnny

    california drug rehab

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  11. Travel is a factor in the price. One must consider the cost reflects the shipping costs, payment for the transporter. Unfortunately few biodiesel processing plants operate, thus travel cost increase. Check this website out that i stumbled onto

    http://findfuturefuels.com/index.php

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  13. Greenway Biodiesel is looking to make biodiesel in Manitoba Canada and sell it in the US.

    Speedway international is the owner of Greenway.

    www.greenwaybiodiesel.com

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  14. Anyone know of smartphone apps that make it easy to find and locate biofuels in California? I know iMotorManager for iPhone does? Has anyone used any others?

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  15. Hi,

    Very interesting blog, Petrochem Diesel is very expensive in the UK now and will only get more expensive!

    I have made a short video about making bio diesel at home using WVO and Coke bottles anyone can do this.

    http://kentbiofuel.blogspot.com/2011/01/how-to-make-bio-fuel-out-from-waste.html

    I would really appreciate any comments on my process or feedback from anyone that has used this process to cut thier fuel bills!

    Saving money is as good as making money in these times!

    Warm Regards,

    Kent Biofuel
    http://kentbiofuel.blogspot.com

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