Biodiesel Production in the USA

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Biodiesel production in the USA can be divided into three (3) different layers. Each layer has its own characteristics, problems and opportunities.

Commercial producers

These large scale producers have annual capacities of more than 2 million liters biodiesel per year (2000 MT/year).

Cooperative and community producers

These smaller scale producers have annual capacities from 40,000 liters to 2 million liters of biodiesel per year (40 MT-2000 MT per year).

Microscale producers

So-called “home brewers” who produce less than 40 million liters per year (less than 40 MT per year).

The history of biodiesel production in the USA has been one where small scale, backyard brewers have given way to more and more large scale commercial producers. As a rule, as the scale of the production increases, there is a change from using the batch process to the continuous process, which allows round the clock operations. The US produces about 105,000 MT of biodiesel annually.

Commercial Producers

Many commercial producers of biodiesel use soybean as the feedstock. This is because the United States is the largest producer, consumer, and exporter of soybeans in the world, and the soybean farmers are one of the strongest and longest supoorters of biodiesel in the country.

Commercial producers usually have a strong relationship to the National Biodiesel Board (NBB), which is the national trade association representing the bisodiesel industry and coordinates biodiesel research and development in the country.

The average commercial biodiesel facility in the USA has an annual capacity of 8 million liters (8000 MT).

Construction costs for new commercial plants is approximately US $0.25/liter of annual production capacity. So, a plant producing 8 million liters (8000 MT) of biodiesel would cost approximately US $2 million.

After construction, production costs of the plant range from US $0.40 per liter to US $0.63 per liter, with the cost of feedstock making up approximately 70% of the total operating costs.

The USA currently has about 25 large producers of biodiesel, with California and Texas leading the way. However, the number of commercial biodiesel plants is increasing quickly in response to external factors such as the price of petrodiesel and political and economic conditions around the world.

Cooperatives and other small producers

These producers occupy a niche between the large-scale commercial producers and the home-brew, micro-scale producers. There are two basic types of cooperative for biodiesel production.

 Bulk Buyer Cooperative

This type of cooperative offers less-expensive fuel to “subscribers”. The producer usually has a large central storage tank and processing facility where members bring their supplies (feedstock), and where subscribers come to pick up the biodiesel. Sometimes, the producers has smaller, distributed storage tanks.

Volunteer Producer Cooperative

In this type of cooperative members may have their own production facilities, and each contributes to the group production. This is a fairly difficult organization to maintain, as a high-level of training is necessary to create consistently high-quality fuel.

Micro-Scale “Homebrew” Production

These producers are typically composed of dedicated and enthusiastic supporters of biodiesel who produce biodiesel from used cooking oil using home-made, low-tech processors.

The desired feedstock is typically used oil from individual fast food and other restaurants. These suppliers typically are not suitable for large scale industrial production because they are widely-scattered and produce limited volumes of feedstock.

The consumers for these producers are typically the producers themselves, and perhaps a small group of close friends. However, it is possible for these producers to land small contracts to supply smaller amounts of biodiesel for local bus fleets and other local users.

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