Biodiesel technology is a mature technology. Biodiesel is produced from vegetable oil (soybean oil, rapeseed oil and palm oil), waste animal and vegetable oil and ditch oil by pre-esterification, transesterification and distillation. Because of the high price of edible oils such as soybean oil and rapeseed oil in China, biodiesel plants mainly produce biodiesel from waste animal and vegetable oil and ditch oil. About 1.2 tons of waste oil can produce 1 ton of biodiesel. The annual construction investment of biodiesel plant for treating 10,000 tons of waste oil is about 10 million yuan, and the annual profit can reach 69.57 million yuan. The project has good economic benefits.

The benefits of biodiesel projects will be affected by many factors, such as raw material prices, diesel prices, marketing channels and national industrial policies.

Raw material price is the key to benefit

The factors affecting the economic benefits of biodiesel projects include project construction costs, raw material prices, operating costs and product prices. The annual equipment depreciation fee and operation cost account for a relatively low proportion of the total cost, while the raw material cost, especially the waste oil raw material, accounts for 65%-75% of the total cost, which shows that obtaining cheap and stable raw oil plays a vital role in the efficiency of biodiesel companies.

The United States mainly uses high-yielding genetically modified soybeans; European countries, especially Germany, use rapeseed oil to produce biodiesel; and Southeast Asia is suitable for planting oil palm trees. These countries use soybean oil, rapeseed oil and palm oil as raw materials to produce biodiesel at higher prices than ordinary diesel, and biodiesel plants benefit from government subsidies and tax relief.

In China, soybean oil and rapeseed oil are used as raw materials for edible oil. On the one hand, they are expensive. On the other hand, if they are used to produce biodiesel on a large scale, the normal supply of edible oil will be disrupted. Waste oil and leprosy fruit are suitable for biodiesel in China.

At present, about 2.3 million tons of waste oils and fats are recovered annually in China, some of which are used to produce biodiesel. In addition, there are a small number of oil plants such as Jatropha curcas and Coptis chinensis. In recent years, many biodiesel plants with annual output of more than 10,000 tons have been built in China, and the prices of abandoned animal and vegetable oils and gutter oils have been rising all the way. In 2008, the average cost of ditch oil is about 3200 yuan/ton, and the total cost after transportation and refining is about 4800 yuan/ton. The selling price of biodiesel is close to that of ordinary diesel, and the profit margin of biodiesel is about 700 yuan/ton.

The influence of diesel price on the trend of biodiesel

Oil price fluctuation will affect the price trend of diesel oil, thus affecting the price trend of biodiesel. At present, the pricing of biodiesel is based on the retail price of ordinary diesel, such as Sichuan Gushan Group, which sells biodiesel at a discount of 30 to 100 yuan per ton. Because biodiesel is superior to ordinary diesel in performance and environmental protection and supported by the national renewable energy policy, it has a certain competitive advantage to produce biodiesel from waste oil and leprosy nut oil.

Sales channels and national policies are the main factors affecting development

China’s biodiesel is also facing problems such as lack of marketing channels and lack of support policies. Although the Renewable Energy Act determines the legal status of biodiesel, biodiesel still has not entered the main channel of state-owned gas stations. China has not formulated relevant policies to promote the production, sale and use of biodiesel, nor has there been a formal distribution channel for biodiesel.

Policy problems are mainly manifested in the absence of support policies for biodiesel production enterprises under the premise of price control of refined oil. The European Union and the United States have implemented tax relief, blending and financial subsidies for biodiesel. The lack of tax incentives, investment subsidies and compulsory blending policies to promote the development of biodiesel industry in China has seriously restricted the development of this industry.