Really, How Much Does Biodiesel Cost?

This article, examines the actual financial biodiesel cost – both biodiesel prices for those who choose to buy theirs from biodiesel production companies and for making biodiesel oneself.

How do biodiesel prices compare with other fuel costs, mile for mile?

• B100 or 100% biodiesel cost an average of 8.2 cents per mile, and gets:o 37 miles per gallon in the city; o 45 miles per gallon on the highway;

• Unleaded gasoline cost an average of 6.9 cents per mile, and gets: o 25 miles per gallon in the city; o 31 miles per gallon on the highway;

• B20 or a mixture of 80% petroleum-based diesel and 20% biodiesel cost 6.0 cents per mile, and gets: o 37 miles per gallon in the city; o 45 miles per gallon on the highway;

• Conventional, petroleum-based diesel cost an average of 5.2 cents per mile, and gets: o 38 miles per gallon in the city; o 46 miles per gallon on the highway.

The mileage one gets from using biodiesel as compared with regular, unleaded gasoline more than makes up for the slightly higher biodiesel cost, especially when you consider that biodiesel prices should only go down over time, whereas the cost of crude oil, and therefore the price of gas at the pump, is only expected to rise or, at best, settle off somewhere around current prices.

By the same token, the fact that conventional diesel fuel is the cheapest of all of them and gets the best mileage in no way discounts the cost-effectiveness of using biodiesel. Again, while gas and diesel prices are rising, biodiesel cost is expected to soften. A gallon of biodiesel cost $ 5 just 5 years ago. At the time of this writing biodiesel cost $ 3.30-$ 3.50 and is getting lower all the time. (You can find out the currently biodiesel cost as well as the prices for all fuels both alternative and conventional, in a regular newsletter published on the following U.S. DOE web page maintained by the Clean Cities Alternative: [])

Not only that, but biodiesel also runs cleaner than its contemporaries, and cleans and lubricates engines. All of these factors contribute to prolonging engine life and reducing vehicle maintenance costs.

Biodiesel is also good for the U.S. economy. A surge in biodiesel demand, like the one we’re currently experiencing and which is only expected to continue to swell, is expected within the next 10 years to create up to 50,000 new jobs for Americans.

Over the next 5 years, U.S. farmers could see their bottom line increase by as much as $ 1 billion thanks to biodiesel. How, you ask? In at least two ways. First, if biodiesel takes off (so to speak), feedstock prices for vegetable oils will steadily increase. The price of a bushel of soybeans, for one, is projected to rise by $ 0.10 per year if biodiesel overtook diesel and gasoline as our fuel of choice. Secondly, the government is currently (and for a limited time only) offering incentives in the form of tax credits on the cost of biodiesel production (see our companion piece, “Government Incentives and Tax Credits for Biodiesel Production & Sale []”). All this makes one thing abundantly clear – as biodiesel becomes more widely used, it will only become more and more profitable, while at the same time leading to a welcome decline in biodiesel prices as well as the biodiesel cost of production.

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