Hi All
I thought the last thread was getting along very well, however it got to long, the input was good however newcomers to the thread did not look at earlier post's
Even though a number of us have approached the subject in other post's it may be worthwhile to revisit the issue here as at least it will be in one thread
See if I can pick the thread up into the economics of Canola for producing oil to turn into biodiesel
Here we go:
Firstly the production of Soy beans on a global basis is over 430 Million tonne
The production of Canola seed is about 43 Million tonne
Straight away one can see why biodiesel in the USA is favouring the use of soy oil as well as Rapeseed oil as it is known there
Australia been what it is a dry continent has an average canola seed production of 2.2 Million tonne averaged over good and not so good years
So let's do a bit of an analysis
We use for our food as well as other purposes, prior to biodiesel becoming what it is today about .5 a Million Tonne
The balance is exported either with yearly contracts or on the spot market
So at best we can have about 1.5 Million tonne available here for biodiesel production if we keep the lot
Assuming that it is extracted with the solvent process we will have about 697 K tonne of oil available to produce about the same amount of biodiesel or about 700 Million litres
Let's have a look at another scenario:
I have said in a prior post, the future for biodiesel use as well as it's best start for the long term is For farmers that can grow about 120 Ha of Canola on their land
This how I see it happening
Cost of land preparation planting harvesting etc is about $370 per Ha
Yield of Canola seed average eastern states is 1.8 Tonne per Ha
Assuming a price of $400 per tonne the farmer gets about $360 nett after storage and handling charges yielding about $648 per ha
Less the $360 cost that leaves a gross income of $278 per ha
If he processes the seed on the farm to get the oil out of it, an achievable extraction of 35% of oil is assured with reasonable equipment
This then yields 630 KG of oil that can with good conversion into biodiesel will give him about 550 litres of fuel
The equation then becomes quite simple, 550 Litres of fuel is worth about $835 to the farmer today as against $ 278 gross by selling the seed
He is also left with about 1150 KG of canola meal that he can sell if he has no stock on his farm
Regardless of various post's previously on prices for canola meal, the going rate is an average between 23 to 29 cents a Kg,
So if we are to average out at say 26 cents per KG He has a further $300 for the meal
He will certainly get a better return by feeding it out to his stock
People that buy canola meal to feed animals do turn a profit
One can play around with numbers till the cows come home, the fact remains;
The farmer needs fuel to run his operation
He has to buy at $1.52 per litre (Yesterday at Mildura) delivered
A simple calculation cannot fail to point out the simple fact that Dino diesel has to be about $.55 for the above scenario to become inoperative
something that I do not see happening
This will have to be a very good return per Ha, on a dollar for dollar basis
He can become independent of fuel purchases if his land is capable of giving him a crop of canola
His cost's are further lowered, he does not have to borrow the money to pay for the fuel, which is cut off if it goes past 14 Days from delivery
Further he will lower his cost of production as he is getting fuel at a lower cost than using dino fuel
If he keeps the meal to feed animals with, he will then improve his land by using the manure on it which gives him a lower cost of fertiliser input
He will be running a closed farming system, nothing leaves the farm
If he recovers his Methanol as he should, his cost of catalyst will be minimal getting the lowest cost for the production of biodiesel on his farm
The glycerin can be added back to the meal and fed to ruminants as it is very good feed for them
Yes I know I have not taken into account Capital cost's, Depreciation, Manufacturing costs, his time as well as the land, cost of chemical etc
I am more than happy to do a full business case on the above
He becomes independent of dino fuel as well as the clutches of fuel distributors, gets the best value out of his land, while preserving hard earned cash
The point surely must be obvious:
Cheers
Chris

Sounds good, and that's the way it should be.

Then the Government steps in and stuffs it up.

The Farmer can claim a rebate on the the 38c excise paid on the dinodiesel, but unless he pays to have his Biodiesel batches tested to enable him to claim the manufacturers grant,he will have to PAY the 38c excise to the Gov't, and the excise on BD cannot be claimed as a rebate for agricultural use! The Farmer is over 76cpl worse off if he goes to the trouble of making his own fuel!

Quote: "Alternative fuels, including biodiesel, will not be eligible for a fuel tax credit until 1 July 2011.
However, alternative fuels including biodiesel will continue to be eligible for a fuel grant under EGCS for fuel purchased before 1 July 2010, providing EGCS eligibility criteria are met.
Eligibility for Energy Grants Credit
the activity must be road transport (that is, vehicles must be registered for use on a public road)
There is no entitlement for a fuel grant for unblended biodiesel used off road"

If the farmer is making bio from canola oil can he just do one proper test on his fuel rather than on every batch, as the oil is identical all the time and the reaction will be exactly the same.

The farmer doesn't even have to test his BD if he doesn't want to.

If he wants to get involved with Gov and the Excise rebate then every batch will need to be tested to prove that it is up to standard.

Really uncool, all they have done is push the homebrewer underground. I would not be supprised that there may be many brewers that lurk around here finding out info but don't post for the fear that they may get found out and a visit from the ATO

__________________
Dave

Hi All
Regarding farmers excise and all that
How about this,
1.Farmer registers himself as a biodiesel producer, Le'ts call it BioPro A,
2.He registers his Farming enterprise as well, Let's call it Agri buis B,
3.He Buys the canola form B and produces Biodiesel He sells to A,
4.He pays the excise But he nominates company B to receive the rebate
Neutral, apart from Gst which has to be paid as normal

Another point,
How is it that excise has to be paid for anything that it is not defined at law
What if it does not meet the required standard?
I would have thought that the law cannot apply
If this was the case Steam as well as SVO would fall under the net
From My reading, the excise on transport fuels, applies to fuels after they meet certain criteria, than they are to be excised
So, How about that from now on We do not make Biodiesel, instead we make FAME or we Transesterify Triglycerides
Let's call us, T of T makers, other name suggestions are welcome
What a bloody joke, these Canberra clowns ought to be ...........
All the Same keep in mind that;
"For every action there is an equal and opposite Government Program"
Cheers
Chris

Chris, I believe that biodiesel has been defined as "where the oil has undercone a process of transesterification", for payment of excise, but for recieiving the grant, it requireds that the biodiesel meets the A.S.


I believe that both oil an biodiesel have an SG of around 0.9 Thus 630kg of oil would be 630/0.9=700 litres of oil (not 550). With a yield of around 0.9, (and the yield should be closer to 1.0) this would provide 630 litres of biodiesel fuel.

This helps your argument and I am in support of your argument that farmers should do this to gain control of their fuel supplies. One thing to note however is that the price of methanol will rise due to the demand and possible profiteering.

Hi Tony
Thanks for the correction on SG I missed it It makes it even better than
Point
The transesterification process that defines biodiesel must by default define soap manufacture as well then!
May be we all became liquid soap manufacturers Would that work?
I am being flippant
Cheers
Chris

Tony
Would you agree with this, on the assumption, given a reasonable Methanol recovery system, the use of Methanol should not be any more than 2% of the qty used per batch?
In a 200 litre batch with 40 L of methanol the loss should be less then .5 of a Litre
Purity of methanol after recovery does not suffer, it can be used in the next batch
This is common practice in commercial production of biodiesel
My information tells me this loss is mostly caused from evaporated fuel as well as leaked Methanol rather then remaining in the biodiesel
So in essence the cost of methanol would at best be a very small cost component of the whole excersise
Cheers
Chris

Chris,
On average, the correct amount of methanol by volume is around 11%, so using 22% would allow you to recover a maximum of 11 litres, from biodiesel and byproduct, per 100 litre batch of oil.

This will minimise wastage of methanol, but any price rise will still impact on the fuel cost. But, who says that you need to run the machinery on biodiesel? Most diesels are very happy on straight vegetable oil.

A fairly dangerous statement to make?