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Environmental Sciences » "Alternative Fuel", book edited by Maximino Manzanera, ISBN 978-953-307-372-9, Published: August 9, 2011 under CC BY-NC-SA 3.0 license. © The Author(s).

# Engine Test of Bio-Diesel Manufactured from Waste Cooking Oil and Reward Preferential Benefit Analyses for Its Promotion

By Jai-Houng Leu
DOI: 10.5772/21712

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## Overview

Figure 1. Uni-President soybean oil transerification reaction curve

Figure 2. Transerification reaction curve of waste cooking oil from Yang-Yang Oil Retrieval Company

Table 7. Emission Test under the State of Full Load (Note> The idle is at 630 rpm)

Figure 4. Pollution Degree Test under Full Load

Figure 5. Pollution Degree Test under Idle State

Figure 6. Pollution Degree Test under Free Acceleration

Case 1. The feedstock is waste eating oil, the purchase price per kilogram is NT$0. The interrelationship between subsidy ratio of biodiesel system equipment, retrieval time limit, internal reward rate and oil purchase proces. Case 2. The feedstock is waste eating oil, the purchase price per kilogram is NT$5. The interrelationship between subsidy ratio of biodiesel system equipment, retrieval time limit, internal reward rate and oil purchase proces.

(3) Discount Rate (necessary reward rate): 20%, pound: NT $dollars = 1:45 Furthermore, the subject of the research was small mould factory with output of 1,275 kiloliter one year. We also conducted evaluation of economic benefits of hardware equipment and price incentives according to the instalment cost of hardware equipment and operation cost provided by Pacific Biodiesel, Inc. The analyses were conducted with self-developed software [9]. ### 4.1. The Analyses of unit output cost of different feedstock This research took an Ireland’s biodiesel mould factory with output 3,000 tons/year as an example to compare unit output cost of three different feed stocks (tea oil-camellia, mixed, waste eating oil): From Table 8, we could learn that the feedstock was 60% to 70% of production cost. If we raise the additive ratios of the waste eating oil or all replace with waste eating oil, the unit cost could be reduced 12.5% to 17%. Therefore, the biodiesel with waste eating oil as feedstock could not only reduce production cost but also had benefit of environment protection, and would never be affected by the fluctuation of prices of agricultural products. Unit: NT dollars/litre  Category of FeedstockItems of Cost 100% Tea Oil Mixed (25% Tea Oil and 75% Waste Eating Oil) 100% Waste Eating Oil * Feedstock Cost 12.02 9.74 8.98 Operation Cost 3.29 3.29 3.29 Investment Cost** 2.31 2.31 2.31 Unit Cost ** 17.6 15.4 14.6 ### Table 8. Comparison and Analyses of Unit Cost of Different Feedstock (Note: *Feedstock Cost: Tea Oil includes agricultural products purchase cost and oil-squeezing cost; waste eating oil means charges fro cleaning, but not included purchase cost for waste eating oil. ** Investment cost: included only investment cost of biodiesel refinery. The investment cost of oil-squeezing factory had been included in feedstock cost. ***Annual production: 3000 tons（3000÷0.8827＝3,400 kilolitres）) ### 4.2. The analyses of benefits of incentives for biodiesel mould factory in Taiwan For the present development of biodiesel in Europe, the size of small mould factory is annual output of 5,500 to 13,500 kilolitres. This research will target at mould factories with annual output of 1,275. According to the instalment cost of hardware equipment and operation cost calculated by Pacific Biodiesel, Inc., we conducted the evaluation of economic benefits of the incentives for hardware equipment and price. This article will take the popularized gasoline and diesel prices as the benchmark for comparing with biodiesel (13.3 to 15.4 NT Dollars/litre of published tag prices, but here we used it as the lowest price to conduct analyses). After analyzing unit output cost of different of different feedstock in Table 1, we could learn that the feedstock cost was 60% to 70% of production cost. There was significant difference in the effects on the production cost between oil plants and waste eating oil as feedstock. Using waste eating oil as feedstock could reduce 17% of production cost. Therefore, for the planting conditions of land in Taiwan, it seems more feasible to use low-cost waste eating oil as feedstock. The research will take waste eating oil and the oil of cooking residue as subjects to conduct related analyses. CASE 1 to 3 are interrelationship between the retrieval time limit of equipment subsidy ratio, internal reward rates and oil purchase prices of biodiesel. Reorganizing the data of CASE 1 to 3, we could obtain results as Table 9 and 10. When the feedstock is waste eating oil (the purchase cost is zero) and oil of cooking residue, because of the reduction of feedstock and perhaps the income of disposal charges, the operators could have economic benefit without any subsidy. But, when the purchase cost of waste eating oil is NT$5/kg, the operator will suffer loss and could not be able to have economic benefit with ordinary diesel sales price 13.3/litre as oil price. From Table 10, we could learn that since waste eating oil (Case 1 – purchase cost was zero), and the oil of cooking residue (Case 3) could have economic benefit without any subsidy, Table 9 only explores the price and equipment subsidy under a situation in which the purchase cost > 0 (Case 2). With 12%, 15% and 20% as reasonable reward rates for the operation of investors. Use interpolation method to calculate demand of oil purchase price and retrieval time limit of the goal of each reward rate; if we adopts price subsidy policy, then the oil purchase prices demand should deduct the sales price NT$13.3/litre of the ordinary fossil diesel, the difference is the demand of price subsidy. From Table 9, we could learn that when the purchase cost of waste eating oil is NT8/kg (including purchase price NT$5/kg and cleansing and transportation charges NT$3/kg). the oil price of break-even point (IRR=12%) is NT$14.6/kg; Retrieval time limit is 21.8 years. If we take current ordinary fossil diesel price NT$13.3/litre as oil purchase price, then the subsidy demand of single price is NT$1.3/litre; if not consider price subsidy, then the equipment subsidy ratio will be as high as 90% to make up difference with ordinary fossil diesel sales price. However, if we consider equipment subsidy ratio in couple with price subsidy (mixed subsidy), then we could reduce demand of price subsidy and equipment subsidy ratio. For example, when IRR=12%, equipment subsidy 50%, demand of price subsidy is only NT$0.5/litre, retrieval time limit could be reduced to eight years. If we want to encourage intention of investment and raise inventory reward rate (IRR), for example 1520%, then the demand of relative non-subsidy oil price will also be raised to NT$16.9/kg, but the retrieval time limit will reduce to 6.4 years and the subsidy for the price difference will be increased to NT$3.6/litre. If we only use equipment subsidy, it is impossible to make up the difference even if we use 100% subsidy. So we should have price subsidy in the same time to reach the goal of raising investment reward rate. For example, when IRR=20%, equipment subsidy 50%, then the price subsidy may only need NT$2/litre and retrieval time limit could reduce to five years. Summarizing the results of analyses of Table 9 as follows:

1. If 12％～20％ are reasonable internal reward rate for operation, the oil purchase price should be between NT$14.6 to 16.9/litre. 2. If the tag price of ordinary fossil diesel is NT$13.3/liter, the difference of purchase price is NT$1.3 to 3.6 after deducting NT$13.3/litre, the average difference is NT$2.5/litre. 3. If we couple with using equipment subsidy ratio, for example, 59%, then the difference of oil purchase will be between NT$0.5/litre to NT$2.1/litre, the average is NT$1.3/litre, reducing about half, comparing to the difference by using single price subsidy.

Using Case 2 cost benefit evaluation of model factory of output 1.275 kilolitres to further analyze the effects of financial subsidies such as hardware and equipment subsidy and low-interest loan on unit production cost.

The feedstock is cooking residue, the purchase price per kilogram is NT$900. The interrelationship between subsidy ratio of biodiesel system equipment, retrieval time limit, internal reward rate and oil purchase proces. Table 10. The Evaluation of 1275 k litre /year Biodiesel Model Factory Subsidy Benefit ### Figure 7. Analyses of reward preferential benefit for biodiesel From Fig. 7, we could learn that the unit production cost of biodiesel in Case 2 (purchase cost >0) is NT$15.4/litre. Under no subsidy, equipment investment (expenditure) cost is NT%2.88/litre, operation cost is NT$12.52/litre; if we consider the equipment subsidy 30%, then equipment investment (expenditure) cost could reduce NT$0.86/litre; if we consider financial subsidies, such as investment tax credit (20%), low-interest loan (6%) and speed up discount (two years), then the total financial subsidy could help to reduce the unit production cost by NT$1.18/litre. Plus equipment subsidy, the total subsidies could reduce unit production cost by NT$2.04/litre.

Comparing the model factory of output 1.275 kilolitres (Case 2) with the above-mentioned Irish model factory (uses 100% waste eating oil as feedstock) of output 3,000 tons (about 3,400 kilolitres), we obtain the unit production cost of biodiesel under current production conditions in Taiwan: NT$15.4/litre, higher than the unit production cost of the factory in Ireland NT$14.6/litre. The primary difference comes from the fact that in Taiwan, in addition to the cleansing and transportation cost, the cost of using waste eating oil has to include purchase price cost whereas in Ireland, they only include cleansing and transportation cost. The other reason is unit equipment investment cost: NT$2.88/litre in Taiwan is higher than the Irish NT$2.31/litre. Through comparing unit production cost of model factories in two countries, we may estimate the unit production cost of biodiesel is between NT$14-16/litre while unit equipment investment cost is between NT$2.3-2.9/litre [10].

From promotion point of view, if the goal market is focused on the transportation utilization of the whole urban regions and public transport roads in Taiwan, the annual consumption quantity is 330 thousand KLOE of B20 bio-diesel; the annual market benefit is 4.3 billion NT dollars for the manufacture of bio-diesel, in addition, the annual CO2 reduction quantity is about 880 thousand ton in Taiwan. Furthermore, the competition abilities were analyzed; the strategy trends were proposed, and, the policy issues were suggested from feedstock supply, manufacture & marketing sales point of views for the future bio-diesel application in Taiwan.

## 3. Conclusion

The production of the methyl linoleate was more over the one of the methyl pamitate during the processes for the manufacture of biodiesel from the waste cooking oil. The reaction balance can be achieved after 15 minute same as the feedstock soybean oil. The crude methyl ester volume was 528 ml, and the crude methyl ester yield was up to 97.77%. After distillation, the methyl ester volume was 512ml, and methyl ester volume yield was 94.81%. The loss caused by water washing reduced more, and low methyl ester volume was obtained.

The process of manufacturing biodiesel by waste cooking oil needs pre-processing to adjust. In the transerification of fat, we have to strictly control the impurities, water and acid value in oil. The acid value of waste cooking oil must be modulated down to 0.26928(mg KOH/g) for the self-manufacture of the biodiesel to keep the normal processes of the transerification reaction with alkali. And, the properties of the manufactured biodiesel meet the standard of the biodiesel almost.

Using bio-diesel to conduct engine test, the results showed that under the test of idle, when used petrochemical diesel, B20 and B100, the concentrations of carbon monoxide emitted by engine were almost the same. Under the test of full load, there was significant effect of reduction of pollution, particularly when use B100 to replace petrochemical diesel. But the reduction of brake horsepower of engines and the increase of oil-consumption signified that the effects are limited to the improvement of environment. Comparing petrochemical diesel, under the test of full load, when used B20 and B100, the concentration of carbon monoxide emitted by engine reduced 14% and 51% respectively and the concentration of sulphur dioxide reduced 68% and 73% respectively, the concentration of nitrogen oxide compound increased 1% and 13% respectively, the smoke reduced 8% and 69% respectively; brake horsepower reduced 8% and 10% respectively; oil-consumption increased 9.4%and 11.3% respectively.

If we take current ordinary fossil diesel price NT$13.3/litre as oil purchase price, then the subsidy demand of single price is NT$1.3/litre; if not consider price subsidy, then the equipment subsidy ratio will be as high as 90%to make up difference with ordinary fossil diesel sales price. However, if we consider equipment subsidy ratio in couple with price subsidy (mixed subsidy), then we could reduce demand of price subsidy and equipment subsidy ratio. For example, when IRR=12%, equipment subsidy 50%, demand of price subsidy is only NT$0.5/litre, retrieval time limit could be reduced to around eight years. If we want to encourage intention of investment and raise investment reward rate (IRR), for example 1520%, then the demand of relative non-subsidy oil price will also be raised to NT$16.9/kg, but the retrieval time limit will reduce to 6.4 years and the subsidy for the price difference will be increased to NT$3.6/litre. If we only use equipment subsidy, it is impossible to make up the difference even if we use 100% subsidy. So we should have price subsidy in the same time to reach the goal of raising investment reward rate. For example, when IRR=20%, equipment subsidy 50%, then the price subsidy may only need NT$2/litre and retrieval time limit could reduce to five years.

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