Feasibility Study for the Production of Biodiesel

Abstract

The report proposes production plant of biodiesel in Michigan. The objective of this feasibility study is to recognize and discover the potential sources of raw materials for a biodiesel facility. It recommends feasible location for the plant, basic market and technical specifications for the fuel produced and the other potential by-products. Moreover, the study presents economic, operating and financial feasibility of the proposed project.

Table of Contents

Abstractii

Thesis Statement1

Introduction1

Economic Viability2

Market Feasibility3

Operating Viability4

Technical Feasibility5

Management Feasibility6

Financial Feasibility7

Conclusion8

Recommendations10

References12

Feasibility Study for the Production of Biodiesel

Thesis Statement

“Biodiesel has exploded into one of the most potential and profitable segments of the energy arenas”

The market for biodiesel has found to be a very profitable venture for potential investors. Numerous companies are in the development phase of the production facility of biodiesel. This product combines all the critical components, ranging from the national energy security objectives to environmental protection to a tool for economic development.

Introduction

Biodiesel is a product produced from animal fat or vegetable oil. It can serve as a replacement for diesel fuel in diesel powered vehicles. The production process is a chemical reaction involving alcohol, like methanol, and a catalyst such as potassium hydroxide or sodium hydroxide. This blend in combined with vegetable oil resulting in a chemical reaction, called transesterification. This method splits the vegetable oil into two by-products, Glycerin and biodiesel (Kleinschmidt, 2010).

The paper presents a feasibility report on the development of a soybean crushing and biodiesel production plant in, Gratiot County, Michigan. The purpose of the report is to explore the possibility of a private business venture producing a finished biodiesel product with a standard quality required under ASTM D-6751. It is estimated that this plant would run at an annual capacity of five million gallons. The ultimate goal of the entrepreneurial venture is to promote and sustain small rural farm business establishments for the purpose of examining the development opportunities of the new soybean biodiesel plant in Michigan. The company would need strong support from governmental agencies and financial institutions, which is further elaborated in the report.

Economic Viability

The U.S. government is showing interest in this regard and developing objectives for second generation fuels. This has led to a very quick realization and spread of the potential of biodiesel. In order to achieve the set targets, the government is taking initiatives to promote and invest in research and development of non-food feed stocks including yellow grease, jatropha, algae, castor, and renewable diesel (Schnepf, 2010). Biodiesel 2020 estimates that all of these elements and ingredients will be important to the ultimate success and achievement of these objectives. This research tracks the worldwide markets to determine the growth of biodiesel. It presents five year forecasts for the demand, consumption and production of biodiesel. The study report of biodiesel 2020 also provides an idea and outlook in different scenarios for the transition from first generation to second generation biodiesel projects, in emerging markets and developed countries.

Numerous factors exist which make the production of biodiesel acceptable and profitable in ...