The Case for Soy

With the recent crazy pricing for Waste Vegetable Oil (WVO), we have begun to analyze looking at alternative feedstocks (remember when WVO was an alternative feedstock?). I developed a spreadsheet where I could plug in the price per lb of the feedstock and the conversion efficiency of that feedstock based upon FFA, moisture, and glycerin value. What I quickly discovered was that virgin soy currently has a higher value than WVO as a biodiesel feedstock! Don’t believe me? Follow the math.

Crude Degummed Soybean Oil – < 1% FFA, < 1% MIU
WVO Yellow Grease – 7% FFA, < 4% MIU

Cost FOB Per lb Per gal
Soy $       0.40 $       3.00
WVO $       0.28 $       2.10

Looking at the material costs only, not overhead (additives, labor, production costs),  the table below shows the cost of the feedstock, raw materials and the costs needed due to the conversion factor of the feedstock (due to the impurities in the WVO, and it takes more methanol and catalyst to process WVO).

Per Gal to process Soy
Feedstock $       3.00 $       2.42
Methanol $       0.23 $       0.40
Catalyst $       0.10 $       0.15
Wash $       0.02 $       0.04
Total COGS $       3.35 $       3.01

So far this makes sense, Soy costs more, so it costs more to make biodiesel.  Right?  But wait.  The value of B100 (as of today) made from soy is more than WVO, and the glycerin purity is higher and worth more.  Thus, per gallon, the total value per gallon of soy biodiesel is higher than WVO.

B100 Value $       3.52 $       2.94
Glycerin Value $       0.22 $       0.11
Recovered MeOH $       0.02 $       0.06
Total Value $       3.76 $       3.11
Profit $       0.41 $       0.10

So something is clearly wrong when the Jacobsen report is showing WVO at .28 per lb for WVO and Virgin Soy is at .40.  This, at a time when B99 biodiesel is selling cheaper than petroleum diesel fuel.   Something is very wrong in Kansas, and our congress just sit on their hands.  So, for now, we’re buying Soy.  If you’re selling WVO, get your pricing right, or don’t bother calling us.

Soybean Oil for Biodiesel Feedstock.