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Biodiesel Expansion

With the massive increases in petroleum prices during 2007 and 2008, there was a corresponding huge biodiesel expansion. Even before 2007, especially in Europe , there was a rapid increase in biodiesel manufacturing facilities due to central government encouragement.

Throughout the world this increase in biodiesel facilities was fueled by these high petroleum prices. With the world recession beginning in 2008, world petroleum prices dropped steeply. This has had a knock on effect on the biodiesel price and also the viability of the biodiesel industry.

In Australia and South Africa and I am sure in the rest the world, there are a number of commercial biodiesel facilities that have closed down due to lack of profitability.

For the home producer, a lot of the cost advantage of producing your own biodiesel has been eroded away. While it is still economically viable for the small scale producer of biodiesel to produce his own fuel, the days of huge benefits are gone. It is still possible to save over 50% of your fuel bill but the value in dollar terms has decreased. For the producer who manufactures biodiesel for environmental reasons the incentive is still there.

Many manufacturers of small scale biodiesel plants have noted that sales have dropped. While high end commercial plants that cost millions of dollars are still being planned and installed, all sectors of the biodiesel industry have experienced a drop in sales.

It is fair to say that the rapid rapid biofuels expansion of the past few years has come to an end and as off 2009 a period of consolidation is occurring.



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