Biodiesel is an alternative fuel to mineral diesel, and can be manufactured from various feedstocks, including:
- vegetable oils such as jatropha, palm, rapeseed, soy, linseed and coconut oil;
- animal fats (including tallow); or
Biodiesel has similar chemical properties (viscosity, boiling point, density and heating value) to mineral diesel, which allows it to be blended with mineral diesel in any proportion and to be used in standard diesel engines with minor or no modification. The main benefits of biodiesel are:
- the reduction of emissions of harmful greenhouse gases, when compared to unblended mineral diesel including; carbon dioxide (an 80 per cent. reduction) and sulphur dioxide (an almost 100 per cent. reduction);
- the presence of oxygen ensures better combustion, reducing black smoke, unburnt hydrocarbons and carbon monoxide emissions;
- it is non-toxic with higher flashpoint temperatures and biodegradability than mineral diesel, making it safer than mineral diesel to store, handle, transport and use;
- it improves the lubricity of mineral diesel fuel, reducing the need for higher sulphur levels, enabling compliance with current legislation; and
- it has a higher cetane number. Biodiesel has a faster ignition than mineral diesel and has 90 per cent. of the energy.
The biodiesel market has been developing rapidly and is expected to see significant growth for at least the next three years.
- Between 1991 and 2005 production in the global biodiesel market has seen growth in excess of 45 per cent. per annum.
- Continued growth is expected to be driven by the political imperative to reduce carbon emission through, amongst other policies, the substitution of fossil fuels with sustainable green alternatives and a desire to reduce reliance on fossil fuels sourced from volatile parts of the globe.
- In the EU alone, these political drivers are expected to cause demand to grow from about 3 million t.p.a. (approximately 3.3 billion litres) in 2005 to about 10 million t.p.a. (approximately 11 billion litres) in 2010 (a growth rate of 32 per cent. per annum).
Feedstock typically accounts for approximately 80 per cent. of biodiesel production costs and the biodiesel feedstock market is expected to remain fragmented with rapeseed based biodiesel being dominant in Europe and palm oil based biodiesel in Asia. However, if the EU is to meet its 2010 biofuel targets, domestically grown crops will be insufficient to support the required biodiesel production. Given this geographical demand-supply imbalance, the international trade of biofuel feedstocks is likely to increase as Europe will need to import feedstock.
The graph below shows the increase in price over the past six years of soyabean oil, sunflower oil, rapeseed oil and crude palm oil.
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