Discussion and comparison of profit margins for biodiesel and fatty acid methyl esters
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Given the current market conditions, there is little profit margin left for biodiesel. Since biodiesel can be produced through a two-step process (namely, producing chemical raw materials – fatty acid methyl esters), the latter offers significantly higher profits based on the price difference of the final products. However, there has been very little discussion about fatty acid methyl esters, let alone about their profit margins. Knowing that biodiesel has difficulty surviving, yet people keep talking about it anyway; why? The ideal raw materials for biodiesel – such as used cooking oil and other fats – are seeing rising prices, which has led biodiesel manufacturers to switch to producing fatty acid methyl esters. Does this mean that small factories that do not have the necessary approvals will no longer have a market for biodiesel? A few days ago, I got in touch with a biodiesel factory in Jiangsu. It used to produce biodiesel, but now it has stopped that production and is instead processing acidified oil; it has also acquired new patents and invested 2.8 million yuan in installing two distillation towers to pre-produce fatty acid methyl esters. The manufacturer states that the acid value of its product is between 0.4 and 1. With China’s current technology, can it meet this standard?
In fact, the position of fatty acid esters is also rather awkward: some require a high iodine value (for use in epoxy production), some require a low iodine value (to replace stearic acid in certain products), and some need short carbon chains (for uses such as coconut oil in surfactant manufacturing). These requirements are contradictory to each other, and a low acid value alone does not necessarily guarantee a good market for such esters.