Energy Sources, Part B: Economics, Planning, and Policy
ISSN: 1556-7249 (Print) 1556-7257 (Online) Journal homepage: http://www.tandfonline.com/loi/uesb20
Economic analysis of biodiesel production from
waste cooking oil
A. Avinash & A. Murugesan
To cite this article: A. Avinash & A. Murugesan (2017): Economic analysis of biodiesel
production from waste cooking oil, Energy Sources, Part B: Economics, Planning, and Policy, DOI:
10.1080/15567249.2017.1319438
To link to this article: http://dx.doi.org/10.1080/15567249.2017.1319438
Published online: 16 May 2017.
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ENERGY SOURCES, PART B: ECONOMICS, PLANNING, AND POLICY
https://doi.org/10.1080/15567249.2017.1319438
Economic analysis of biodiesel production from waste cooking oil
A. Avinasha and A. Murugesanb
a
Department of Mechanical Engineering, KPR Institute of Engineering and Technology, Arasur, Coimbatore, Tamil Nadu,
India; bDepartment of Mechanical Engineering, K.S. Rangasamy College of Technology, Tiruchengode, Tamil Nadu, India
ABSTRACT KEYWORDS
Renewable diesel fuel or biodiesel is one of the prospective growth inducers that Biodiesel; cost estimate;
could help to resolve a country’s economic problem and will decrease the economic analysis; glycerol;
nation’s dependence on foreign energy imports. In this context, an economic waste cooking oil
evaluation of biodiesel production from waste cooking oil is reported in this
study. The biodiesel was produced from waste cooking oil by transesterification
process. The by-product glycerol produced during transesterification is purified
and recovered for its commercial value. Also, unreacted methanol after transes-
terification is recovered by distillation and recycled for reuse. The biodiesel
production facility developed in this study is dedicated to the production of
39,208 metric tons of biodiesel per year. The total capital investment charged to
this project is estimated to be Rs. 1,615,133,000. At a value of Rs. 15/kg for
feedstock waste cooking oil, a biodiesel cost of Rs. 55/kg was estimated. Along
with main revenue from biodiesel, additional revenue of around Rs. 22/kg can be
generated from the sale of glycerol. On the whole, the profitability analysis of the
study discloses that the modeled biodiesel production plant has the ability to
produce biodiesel with unit production cost of Rs. 51/kg and unit production
revenue of Rs. 58/kg.
1. Introduction
In a developing country like India the import of fuels to meet the current energy demand triggers the
need for biofuels to influence the indigenous sources of inputs, potentially increasing profits and
opportunities in rural sectors (Talebian-Kiakalaieh et al., 2013). Based on these considerations,
biodiesel is a suitable surrogate to diesel fuel. There are more than 350 oil bearing crops identified
as potential alternative sources for biodiesel production (Balat, 2008). However, there are major
obstacles in large-scale production of biodiesel including price competitiveness and production
limitations. In addition, current production technologies force biodiesel prices to go higher than
those of diesel fuel. As a means to lower prices, it is suggested to use waste cooking oil as a cost-effective
source to produce biodiesel (Talebian-Kiakalaieh et al., 2013).
The availability of waste cooking oil is from restaurants/hotels. Most of the waste cooking oils are
collected from fried food which can produce as much as 15 L of waste cooking oil per day as reported
by Abdullah et al. (2013). The high potential waste cooking oils can be collected from the hostel mess as
reported by Burnwal et al. (2014).
Biodiesel can be produced through different kinds of methods such as preheating, blending,
micro-emulsification, pyrolysis, and transesterification (Hazar and Aydin, 2010.; Nainwal et al., 2015;
Bora et al., 2016; Ito et al., 2012, and Bilgin et al., 2015). Among these methods, transesterification
process was noted as the most suitable and simple method to overcome problems due to direct use of
oil in diesel engines (Long and Fang, 2012). Transesterification is the process of displacement of
CONTACT A. Avinash [email protected] Department of Mechanical Engineering, KPR Institute of
Engineering and Technology, Arasur, Coimbatore 641 407, Tamil Nadu, India.
© 2017 Taylor & Francis Group, LLC
2 A. AVINASH AND A. MURUGESAN
glycerol with simpler alcohol (methanol/ethanol) in the presence of a catalyst to chemically break the
molecule of the fat/oil into esters with glycerol as a by-product (Chavan et al., 2013).
Based on the above considerations, the main objective of this study is to perform an economic
analysis of biodiesel from waste cooking oil by transesterification process with base catalyst (NaOH)
and methanol. The economic analysis was done in this work with the SuperPro designer (Intelligen
Inc., Scotch Plains, NJ, USA) The included SuperPro model is a slightly modified version of a
process model developed by Haas et al. (2006). The optimum parameters (Molar ratio-9:1 and
catalyst concentration 0.75 wt/wt of NaOH) for waste cooking oil biodiesel production were chosen
based on the work carried out by Carlos et al. (2011).
2. Features of biodiesel production plant
The model of the biodiesel plant is shown in Figure 1. Initially, waste cooking oil stored in tank is fed
into transesterification reactor 1. Before entering the reactor, the oil is preheated to 60°C to facilitate
the reaction. The alcohol (methanol) and catalyst (NaOH mixed with methanol) stored in separate
tanks are mixed in the mixer and enter the two-way flow splitter. The splitter splits 90% of mixture and
is fed into transesterification reactor 1 and rest 10% is fed into transesterification reactor 2.
In this plant, transesterification is carried out in two stages to increase the biodiesel conversion efficiency
(~97%). In first stage, waste cooking oil is transesterified using 90% mixture of catalyst and alcohol. In the
second stage, transesterified biodiesel with unreacted components from the first stage is again transester-
ified with 10% of catalyst–alcohol mixture. After transesterification process, the by-product glycerol and
unreacted methanol are separated and recovered by distillation process. The recovered methanol is recycled
back to the mixing vessel. Crude biodiesel is acid-washed (HCl) and purified by vacuum dryer system.
3. Bulk raw material required for entire process
The annual operating days per year of the modeled plant = 330 and thus the annual operating time =
7,920 h. This plant has the capacity to produce approximately 39,208 metric tons of biodiesel per
year and 3,128 metric tons of glycerol per year. The quantities of each raw material required to
produce 39,208 metric tons of biodiesel per year are listed in Table 1, which shows the material
requirements in both kg/year and kg/h.
4. Economic analysis of biodiesel production
The economic evaluation report of the biodiesel production plant dedicated to production of 39,208
metric tons of biodiesel per year is shown in Table 2. Capital investment charged for such a plant is
around Rs. 1,615,133,000. One-third (Rs. 538,378,000) of this capital cost was for actual equipment
purchase, and two-thirds (Rs. 1,076,755,000) were based on the assumption of a construction/installation
cost roughly double the equipment costs.
The projected annual operating cost of modeled biodiesel production facility is shown in Table 3 and
the percentage breakdown of the annual operating cost is depicted in Figure 2. From Table 3 it is seen
that annual operating cost of the biodiesel plant is Rs. 2,075,333,000 and this figure translates to a unit
biodiesel production cost of around Rs. 51/kg. From Figure 2 it is seen that raw materials costs (80%)
constitute the greatest component of overall production costs followed by facility-dependent (11%),
utilities (7%), and at last labor cost (2%).
This analysis assumes that a new facility will be built for this process, and the project lifetime is 15
years. The main revenue is based on the selling price of biodiesel at Rs. 55.8/kg (Rs. 2,261,222,601/year).
Additional revenue of Rs. 22.5/kg (Rs.104, 373,027/year) is generated from the sale of glycerol. Thus, the
total revenue of this plant is Rs. 2,365,586,252/year. Overall, the gross profit from the facility is Rs.
290,253,000 /year.
ENERGY SOURCES, PART B: ECONOMICS, PLANNING, AND POLICY 3
Figure 1. Model of biodiesel production plant.
4 A. AVINASH AND A. MURUGESAN
Table 1. Bulk materials (entire process).
Material kg/year kg/h
HCl 83,762 10,576
Methanol 10,952,330 1,382,870
Sodium hydroxide 266,508 33,650
Waste cooking oil 33,634,775 4,246,815
Water 1,471,253 185,764
Table 2. Executive summary.
Total capital investment Rs. 1,615,133,000
Capital investment charged to this project Rs. 1,615,133,000
Operating cost Rs. 2,075,333,000/year
Main revenue Rs. 2,261,222,000/year
Other revenues Rs. 104,373,027/year
Total revenues Rs. 2,365,586,000/year
Cost basis annual rate 40,499,171 kg MP/year
Unit production cost Rs. 51.24/kg MP
Net unit production cost Rs. 51.24/kg MP
Unit production revenue Rs. 58.41/kg MP
MP: main product – biodiesel.
Table 3. Annual operating cost.
Cost item Rs.
Raw materials 1,665,650,000
Labor-dependent 33,405,000
Facility-dependent 219,820,000
Utilities 153,054,000
Miscellaneous 3,404,000
TOTAL 2,075,333,000
Figure 2. Percentage breakdown of annual operating cost.
5. Conclusion
The main objective of this study is to model a biodiesel plant to produce methyl esters from waste
cooking oil and to recover the co-products (glycerol and unreacted methanol). The economic
analysis disclosed that it is possible to produce biodiesel from the modeled plant more profitably
with unit production cost of Rs. 51/kg and unit production revenue of Rs. 58/kg. Based on this study,
the following recommendations are drawn.
ENERGY SOURCES, PART B: ECONOMICS, PLANNING, AND POLICY 5
The installation of large-scale biodiesel production facility could have positive impacts and will
generate new jobs for the poorest communities. Although biodiesel may be a good energy alternative
opportunity in the future, there are lots of barriers that keep the biodiesel industry from taking off
the ground in the present. The first and foremost of all is the level of subsidies provided by the
government. Finally, the country’s national policy should call for the creation of a biodiesel naviga-
tion committee, which will lead this project with significant political clout to bring energy indepen-
dence to the nation.
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