Is this an accurate snapshot of the problems facing the biodiesel industry in North America?

Interesting post on Xeconomy blog looking at the situation at Imperium Renewables. While I’m not able to comment on the comapny’s situation, some of the issues facing the business of biodiesel in the US look pretty stark in the article. The most worrying is the quote from Michael Butler, chairman of Seattle-based Cascadia Capital and a leading cleantech supporter,he places the blame for Imperium’s woes squarely on the biodiesel market.

 ”The cost of input–primarily soy and corn–costs too much given theprice they get for their biodiesel,” says Butler.

If that’s your problem, then you need to cut costs in your process as much as possible, or if you’ve got the financial muscle, integrate downstream into raw material production and upstream into distribution. It can be very uncomfortable sitting in the middle.

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2 Responses to Is this an accurate snapshot of the problems facing the biodiesel industry in North America?

  1. larry hagedon 19 August, 2008 at 7:35 pm #

    Any company using bio-fuel production technology, turning commodities like corn or beans into fuel as a feedstock should understand by now that you make your profits on the co-products, not on the ethanol or bio-diesel. They should understand that to be competitive, you use multiple technologies to make marketable fuel and co-products out of everything.

    Just as pork packing plants have to market everything but the squeal to profit, so do corn and soybeans processors.

    The price to beat today with bio-fuels in order to compete is under a dollar a gallon.

    The modern processors are using multiple technologies including green algae, yeast fermentation, bacterial and pyrolitic reduction, all in various combinations to wring every dime out of their grain feedstocks.

    First is to take the oil out and process it into cooking oil or diesel fuel. If they are smart they, or a company subdivision, will make cooking oil and lease it to the restaurants and food processors. When it is dirty they will reclaim it, replacing it with more leased cooking oil and then re-process the used oil into diesel fuel.

    To be competitive, they will also process out any of hundreds of marketable pharmaceuticals, industrial chemicals, plastics, and human and animal feeds.

    To be competitive, they will use green algae to treat their waste water, sewage, garbage, and plant emissions and then use any of the bio-fuel processes to make the algae into fuel.

    larry hagedon

  2. Simon Robinson 20 August, 2008 at 9:42 am #

    You are on the right lines. You have to be able to extract the value anywhere from the seed to the pump/end user.

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