Viability of Biodiesel Production
Attributes
Medium: Animals, Plants and/or Others
Country: Thailand
Analytical Framework(s): Economic Analysis
Study Date: 2008
Publication Date: 2009
Major Result(s)
Functional Transfer: ENPV = Σ((PnQn + ΣΣqinmpim + VE - ΣCin - CE)/(1 + r)n),
where ENPV is the economic net present value of biodiesel production; VE is the total environmental benefit; CE is the total environmental cost.
Study Note: To promote the development of the JCL diesel industry, incentive policies are vital. When JCL seed and oil is produced by different producers the required annual subsidies are about 881.66 yuan per hectare for seed producers and 2.68 yuan per l for oil producers when the seed yield is 1,485 kg per tonne and the present diesel price is 5.22 yuan per l, assuming a margin of 10% for producers. When JME is the end product and producers purchase JCL seeds to produce JME, a subsidy rate of 4.01 yuan per l should be made to producers so as to promote the production of JCL JME. If the seed yield is higher than 1,485 kg per ton, the subsidy rate for producers at different stages of the production chain tends to decrease. In particular, no subsidy is required if the seed yield is higher than 3,267 kg per tonne and the present seed price (2 yuan per kg) prevails. If the production chain is run by a single producer, subsidy rates for the end products of JCL and JME are 3.97 yuan per l and 4.01yuan per l, respectively when the seed yield is 1,485 kg per tonne.
Study Details
Summary: The seeds of Jatropha curcas L. (JCL) can be used to extract oil for direct blending with fossil diesel, or be further processed into JCL methyl ester (JME) through transesterification reaction. This study assessed the economic, environmental and energy performance of the production of the two end products using a lifecycle analysis method. It was assumed that: (1) the time horizon for the project is 30 years (the life expectancy of Jatropha is 30-50 years), the working days are 330 days per year, and the discount rate is 8%; (2) the spacing of JCL plantation is 2m x 3m, or the tree density is 1,650 per hectare; (3) the seed yield is 1,485 kg per hectare (500 fruits per tree); (4) The distance between the JCL plantation and oil refinery or fertilizer plants is 50 km, while the distance between the oil refinery and oil distribution station is 10 km; the carrying capacity of the trucks is 3 t and that of the oil tankers is 5 t. The primary seed production data was collected from Honghe and Chuxiong Prefectures, Yunnan Province, China, where Jatropha plantations have been developed on a massive scale. The technical oil extraction data was collected for Erkang Science and Technology Co. Ltd, a vegetable oil producer. The results show that, at the current level of technology and management, the production of JCL biodiesel is financially and economically unfeasible, but that JCL biodiesel has excellent environmental and energy performance. However, if the seed yield can be improved to above 2.46 tonnes per hectare, it would be economically feasible to produce any of the two end products and the value of carbon emission reduction and the fruit husks can provide a justification for providing producers with a subsidy.
Site Characteristics: In Yunnan Province, the types of land suitable for planting JCL have been identified as waste land and hills, "four sides" (the sides of homesteads, villages, roads and ditches) and scattered plots (unused small patches of land, sporadically distributed), and shrub land and open forests. Since waste land and hills are mainly barren, their opportunity costs are negligible. On four sides and scattered plots, JCLs are usually planted for specific purposes, such as fencing and erosion control. The benefit of such kinds of land use can be considered higher than the opportunity cost. When JCLs are planted on shrub land and open forests, the impact on land use depends on how the JCL plantation is established. If shrub land and open forests are cleared to plant JCLs, costs may be high because of a loss of biodiversity, carbon emissions and other ecological damage. However, if JCLs are planted by intercropping, the impact on land use is negligible.
Comments: The production and use of JCL biodiesel makes a significant contribution to the reduction of carbon emissions with a rate of 7.34 kg CO2e per l for JCL oil and 8.04 kg per l for JME respectively. With an increase in seed yield, the carbon balances of the two end products increase. The main factors affecting carbon balance are seed yields and coproducts. The value of carbon emission reduction and co-products may provide a justification for the subsidization of JCL biodiesel production if a seed yield higher than 2.46 tonnes per hectare can be obtained. For both end products energy efficiency in terms of E1, E2 and E3 are all greater than one. That is, the production of both JCL oil and JME are energy-efficient. Without the process of transesterification, the production of JCL oil is more energy-efficient. The energy efficiency becomes higher as the seed yield increases. Other factors affecting energy efficiency include seed yield, co-product output and farm energy inputs.