Feedstock dominates biodiesel costs - suppliers

28 June 2007 20:09  [Source: ICIS news]

HOUSTON (ICIS news)--Feedstock represent 70-80% of biodiesel production costs, several producers said on Thursday.

“Finding ways to use flexible feedstocks is important to monitoring costs,” a producer said at the Platt’s Biodiesel conference in Houston.

“Chicago Board of Trade (CBOT) soybean futures are running about 35 cents/lb [$772/tonne] right now for crude soybean oil,” another supplier said. “Add about 3.5 cents/lb onto that for refining and another 3 cents/lb for freights and you have an idea of what the feedstock cost effect can be,” the producer added.

Front-month July crude soybean oil futures on CBOT were trading at 35.51 cents/lb by noon on Thursday, up over 5 cents from the previous settlement. CBOT does not cover refined soybean oil futures.

Biodiesel producers also use palm oil, but this feedstock is imported from Asia. Other alternatives include animal fats and waste oils, which some producers say are gaining in use. However, other suppliers said the use of these feedstocks is minimal.

Major US biodiesel producers include World Energy Alternatives, Standard Renewable Energy, Peter Cremer North America and Dow Haltermann.

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Author: Judith Taylor
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