Biofuel production can be expensive, especially when compared to fossil fuels.
In Europe, biofuels have consistently been more expensive than fossil fuels in recent years.
The price difference between biofuels and fossil fuels is increasing due to the current price hikes in feedstocks used for biofuel production, such as vegetable oils, cereals, used cooking oil, and animal fats.
The cost of biofuel production depends on various factors, including feedstock costs, plant scale, and technology used.
Studies have shown that pyrolysis oils, a type of biofuel, can be produced for between 75 and 300 EUR per ton oil (4 to 18 EUR/GJ), assuming feedstock costs between 0 and 100 euros/t (0 to 1.9 EUR/GJ).
Economic analysis of biofuel production includes capital cost and cash flow analysis.
The cost can be calculated based on capacity factored and equipment-based assessment and quotation from vendors.
Sensitivity and uncertainty analysis depends on the fluctuations of different parameters' price rates, such as feedstock, labor, electricity, taxes, and total plant running time.
Additionally, production costs can be compared with fuel produced from other sources and methods.
To break even, the revenue and total costs of a biofuel production plant must be equal.
The lowest break-even selling point can be achieved by using the most inexpensive biomass available.
This means that the cost of biofuel production can be reduced by using cheaper feedstocks.
The cost of bio-oil produced from the fast pyrolysis of biomass varies depending on the type of biomass used.
For example, Patel et al. reported a cost of 1.09 $/L for bio-oil produced from the fast pyrolysis of woodchips.
Xin et al. estimated a price of $2.23/gallon bio-oil.
Li et al. conducted a cost analysis of biomass in in-situ and ex-situ catalytic pyrolysis and found that the least fuel-selling price of bio-oil was $1.11 per liter for the in-situ process and $1.13 per liter for the ex-situ process.
The overall cost of bio-oil production can be reduced by implementing heat integration in the pyrolysis process, which allows for energy recovery and reduces utilities cost.
Additionally, using blended feedstock and less expensive catalysts can decrease the operating cost.
It is also worth noting that larger pyrolysis plants have the potential to produce less expensive bio-oil compared to smaller plants.
Bio-oil, which is derived from biomass, is an emulsion of water and organic compounds.
These organic compounds can be further processed into substitutes for fossil fuels.
The cost of converting corn stover to bio-oil via fast pyrolysis and then upgrading it to gasoline and diesel fuel at a large-capacity refinery is estimated to be between $3 and $4 per gallon.
Bio-oil has a clear advantage in ease of handling and reduced storage costs compared to industrial wood chips.
It is also competitively priced with fuel oil in many markets.
For example, in 2014, the price of Canadian pyrolysis oil delivered to Rotterdam was around $13 per GJ, which was comparable to the price of heating oil in most markets (~$2 per gallon) without any environmental credits.
However, for pyrolysis oil to have a price advantage over fuel oil, current oil prices would need to rise above $55 per barrel.
Overall, while biofuel production can be expensive, there are various factors that can affect the cost, such as feedstock prices, plant scale, technology used, and process optimization.
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