Biodiesel Fact Sheet

1. prepared by NEEIC http://www.neeic.org Biodiesel Fact Sheet Transesterification The most well-established technology for biodiesel production is transesterification. The process involves filtering the feedstock (vegetable oil or animal fats) to remove water and contaminants, and then mixing the feedstock with methanol and a catalyst. This process causes the oil molecules to break apart and reform into esters (biodiesel) and glycerol, which are then separated from each other and purified. A by-product of this process is glycerine, which is used in many types of cosmetics, medicines, and foods. Biodiesel made up 84% of the 3 Mtoe of all biofuels produced and consumed in the European Union in 2005. Germany accounted for 62% of EU biodiesel output, with the rest coming from France, Italy, and Spain. The United States produced 220 ktoe of biodiesel in 2005. Market Overview Gasification Biomass is converted into a gaseous mixture of hydrogen, carbon monoxide, & carbon dioxide by applying heat under pressure in the presence of steam and a controlled amount of oxygen. The biomass is chemically broken apart by heat, steam, and oxygen, setting into motion chemical reactions that produce a synthesis gas, “syngas,”- a mixture of hydrogen, carbon monoxide, and carbon dioxide. The Fischer-Tropsch process converts syngas into diesel fuel. Biodiesel Production Costs The cost of producing biodiesel depends on the type of feedstock and conversion technology. The current cost of biodiesel production is estimated to be $0.60/litre of diesel equivalent in Europe (based on rapeseed) and $0.50/litre in the United States (based on soybeans). Production costs are projected to fall to just of $0.30/litre in the U.S. and $0.40/litre in the E.U. • Key Drivers in the European Union • European biodiesel production tripled between 2000 and 2005 due to the adoption of strong national incentives in an attempt to meet E.U. targets. • Under the EU Common Agricultural Policy and a trade agreement with the U.S., set-aside land (land left fallow in return for subsidy payments) can be used to grow biofuels crops up to 1 million tons of soybean equivalent per year. • Member states are permitted to levy lower excise taxes on biofuels than on conventional fuels. • Several countries provide financial incentives for investment in biorefineries. • 2003 European directive requires all member states to set non-binding targets for a minimum share of biofuels in the road-transport fuels markets. • U.S. Biodiesel Production Capacity • Presently 148 companies have invested in the development of biodiesel manufacturing plants and are actively marketing biodiesel. • Annual production capacity from existing biodiesel plants is 1.39 billion gallons per year. • 96 companies have reported that their plants are under construction and will be completed within the next 18 months. • An additional 5 plants are expanding their existing operations. • New production capacity has the potential to add 1.89 billion gallons of biodiesel per year. • Biodiesel Emissions • According to the U.S. Department of Energy, biodiesel production and use, in comparison to petroleum diesel, produces 78.5% few carbon dioxide emissions. Biodiesel is also the only alternative fuel to submit a complete evaluation of emissions results and health effects to the U.S. EPA under the Clean Air Act Section 211(b): • The ozone forming potential of biodiesel hydrocarbons is less than petroleum diesel fuel. • Sulfur emissions are essentially eliminated. • Reductions in carbon monoxide, particulates, hydrocarbons, and nitrogen oxides. Biodiesel Production Plants under Construction as of June 2007 U.S. EPA: Biodiesel Impacts on Exhaust Emissions