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Proposed establishment of a Bio-Diesel Production facility (Feasibility)

Garner, Gary O., Hollingsworth, Peter, & Stone, Peter (2002) Proposed establishment of a Bio-Diesel Production facility (Feasibility).

Abstract

The outcome of this Report suggests there is strong viability for the establishment of a 60,000 tonne p.a. (raw material input) biodiesel plant.A plant of this size would provide an annual output (at full production levels) of 59.7m litres of biodiesel, 6.12m kilograms of crude glycerine, and 1,320 tonnes of fertiliser (potassium sulphate). This would result in a gross annual sales turnover of $47.443m, with the majority of this income derived from biodiesel fuel ($43.027m), and to a lesser extent, glycerine ($4.284m). The total capital requirement for the plant is $21.307m, of which $20.0m is the estimated cost of the building, plant, machinery and equipment and associated ancillaries. The land is assumed to be available to the Project at zero cost. The balance of $1.307m is required for working capital.

The above capital requirement would be offset by a Federal Government Subsidy of $9.552m which is based on a grant of $0.16 per litre biodiesel output. This is in line with a recent announcement by the Federal Government . Whilst this subsidy is not "make-or-brea" for the Project, it does nevertheless considerably mitigate financial risk and improves overall return ensuring the Project is very likely to succeed. However, with a rebate production quantity limitation applicable to the subsidy, it will be the initial renewable fuel producers whom are able to quickly establish themselves that will be able to take full advantage of this offer.

The net amount of capital to be sourced by the Project’s proponents is therefore $11.755m. Without the government subsidy, the IRR reduces to 37.66%, however long term annual trading profitability is unaffected since the additional interest component is paid off in the early years of the Project.

Primary inputs (feedstock) for this project are 51,000 tonnes p.a. of tallow, 9,000 tonnes p.a. of Waste Cooking Oil, 6.48m kg p.a. of methanol ($4.374m), 0.9m kg p.a. pf KOH (potassium hydroxide) @ $1.08m annually, and 780,000 kg p.a. of sulphuric acid @ $0.195m annually. The process also requires 1.44m litres of water, however output includes 2.5m of "waste" water.

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ID Code: 7229
Item Type: Other
Keywords: Biodiesel, glycerine, potassium sulphate, Federal Government, renewable fuel, tallow, rendering, WCO, methanol, potassium hydroxide, sulphuric acid, petrodiesel
Subjects: Australian and New Zealand Standard Research Classification > ENGINEERING (090000) > CHEMICAL ENGINEERING (090400) > Chemical Engineering not elsewhere classified (090499)
Divisions: Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Copyright Owner: Copyright 2002 Gary O. Garner
Deposited On: 27 Apr 2007
Last Modified: 09 Jun 2010 22:39

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