The Economics of Biofuels - Does biodiesel make cents?
Summary
This white paper explores the economics of biodiesel production, comparing its profitability to traditional diesel production. The authors present a comprehensive overview of the biodiesel market, including feedstocks, production processes, and government policies influencing its development. They analyze the impact of the Renewable Fuel Standard (RFS) program on the refining industry, particularly the role of Renewable Identification Numbers (RINs) and their impact on compliance costs. The paper also examines the California Low Carbon Fuel Standard (LCFS) and its influence on biofuel production in the state. Through financial modeling, the authors assess the net present value of biodiesel plants and oil refineries, highlighting the significance of government incentives in driving biodiesel production and its potential for growth in the coming years.
