It was only a few years ago when a large surplus of quality biodiesel feedstock was available, the political support of biodiesel was unwavering, and demand was at an all time high to find something cheaper than petroleum diesel. Times have certainly changed.
Over the past several years the prices of all crude and refined fats have continued to rise, causing the cost of making biodiesel to skyrocket. The old rule of thumb was to assume that a biodiesel (transesterification) plant’s feedstock cost alone was around 75-80% of the total variable cost of production. All else being equal, this percentage has increased and made it more important than ever to come up with a way to reduce production costs.
Although there are ways to make the transesterification process more efficient or cost less to operate, a properly designed process should have already taken this into account to make a very cost-effective processing plant. And without a doubt, this would be the first place to look for potential savings. Therefore, if there was a way to reduce the cost of that expensive feedstock, even though it might cost a little bit of money to obtain the same quality of the feedstock that is eventually fed to the existing transesterification process, a saving could be realised. In other words, it may make sense to spend a little bit of money in order to save a lot.