Elsevier

Bioresource Technology

Volume 90, Issue 3, December 2003, Pages 229-240
Bioresource Technology

Biodiesel production from waste cooking oil: 2. Economic assessment and sensitivity analysis

https://doi.org/10.1016/S0960-8524(03)00150-0Get rights and content

Abstract

The economic feasibilities of four continuous processes to produce biodiesel, including both alkali- and acid-catalyzed processes, using waste cooking oil and the ‘standard’ process using virgin vegetable oil as the raw material, were assessed. Although the alkali-catalyzed process using virgin vegetable oil had the lowest fixed capital cost, the acid-catalyzed process using waste cooking oil was more economically feasible overall, providing a lower total manufacturing cost, a more attractive after-tax rate of return and a lower biodiesel break-even price. On the basis of these economic calculations, sensitivity analyses for these processes were carried out. Plant capacity and prices of feedstock oils and biodiesel were found to be the most significant factors affecting the economic viability of biodiesel manufacture.

Introduction

Exploring new energy resources, such as biodiesel fuel, is of growing importance in recent years. Biodiesel, derived from vegetable oil or animal fats, is recommended for use as a substitute for petroleum-based diesel mainly because biodiesel is a renewable, domestic resource with an environmentally friendly emission profile and is readily biodegradable. The use of biodiesel as a fuel has been widely investigated. Its commercial use as a diesel substitute began in Europe in the late 1980s.

At present, the most common way to produce biodiesel is to transesterify triacylglycerols in vegetable oil or animal fats with an alcohol in the presence of an alkali or acid catalyst. Methanol is the commonly used alcohol in this process, due in part to its low cost. The products, fatty acid methyl esters (FAME), are called biodiesel and include glycerine as a by-product. Alkali-catalyzed transesterification has been most frequently used industrially, mainly due to its fast reaction rate. Sodium hydroxide or potassium hydroxide is the usual alkali catalyst. In contrast, acid-catalyzed transesterification has received less attention because it has a relatively slow reaction rate. Nevertheless, it is insensitive to free fatty acids in feedstock oil compared to the alkali-catalyzed system. The typical acid catalyst used in the reaction is sulfuric acid.

Compared to petroleum-based diesel, the high cost of biodiesel is a major barrier to its commercialization. It costs approximately one and a half times that of petroleum-based diesel depending on feedstock oils (Prokop, 2002; Lott, 2002). It is reported that approximately 70–95% of the total biodiesel production cost arises from the cost of raw material; that is, vegetable oil or animal fats (Krawczyk, 1996; Connemann and Fischer, 1998). Therefore, the use of waste cooking oil should greatly reduce the cost of biodiesel because waste oil is available at a relatively low price.

In a previous study, four different process flowsheets for producing biodiesel from virgin vegetable oil or waste cooking oil by alkali- or acid-catalyzed transesterification were developed (Zhang et al., 2003). A comparison of these processes was presented from the point of view of their process technology. The results showed that the acid-catalyzed process from waste cooking oil was potentially a competitive alternative to the commonly used alkali-catalyzed process. Besides the technological evaluation, economic feasibility is also of great importance in assessing process viability. Thus, the main objective of the present article is to assess these processes on an economic basis. In this way, a better evaluation of the biodiesel production process will be achieved from both the technological and economic points of view. In addition, a sensitivity analysis of each process is presented to identify the major factors affecting the economic viability of biodiesel production.

Throughout this article, monetary values are expressed in US dollars.

Section snippets

Economic studies

In previous economic studies of biodiesel production, the main economic criteria were capital cost, manufacturing cost and biodiesel break-even price. Results of three recent studies are given in Table 1. Nelson et al. (1994) evaluated the economic feasibility of a plant producing approximately 100,000 tonne/year of biodiesel. Beef tallow was transesterified with methanol in the presence of an alkali catalyst. Noordam and Withers (1996) carried out an economic study on a biodiesel plant with a

Process descriptions

Four different continuous processes to produce biodiesel from virgin oil or waste cooking oil were designed and simulated using HYSYSTM. Flowsheets and technological assessments of these processes were provided by Zhang et al. (2003). These processes were the focus of the economic evaluation in the present investigation. A brief description of each process follows.

Process I was an alkali-catalyzed process to produce biodiesel from virgin vegetable oil. Virgin oil and a mixture of methanol and

Basis and scope of calculations

Economic evaluations were based on the following assumptions: (1) Each process was based on a plant capacity of 8000 tonne/year biodiesel. This was the same size as an existing plant in Europe (Connemann and Fischer, 1998) and was consistent with plant sizes discussed previously (Zhang et al., 2003). In the following sensitivity analyses, two other levels of plant capacity, one at 4000 and the other at 12,000 tonne/year were considered. (2) Operating hours for the biodiesel plant were assumed

Sensitivity analysis

After completion of the economic assessment of the biodiesel production processes, sensitivity analyses for these processes were conducted to determine the sensitivity of the after-tax rate of return to changes in a variety of factors thought to plausibly significantly impact the process economics. As an example for discussion, process III, the acid-catalyzed process to produce biodiesel from waste cooking oil, was used. Detailed procedures have been presented elsewhere (Zhang, 2002).

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Conclusions

On the basis of the economic assessment of four continuous alkali- and acid-catalyzed processes using virgin oil or waste cooking oil as the raw material, the following conclusions were made. The alkali-catalyzed process using virgin oil (process I) had the lowest total capital investment because of the relatively small sizes and carbon steel construction of most of the process equipment. For a plant producing 8000 tonne/year biodiesel, the total capital investment in process I was

Acknowledgements

The Natural Sciences and Engineering Research Council of Canada supported this work. The authors acknowledge Dr. A.Y. Tremblay for his assistance with the HYSYSTM simulation and Dr. B.C.-Y. Lu for his assistance with the thermodynamic model.

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