ECONOMIC ANALYSIS OF INCORPORATING BIO-DIESEL PRODUCTION TO AN EXISTING OIL MILL

摘要

This paper investigates the potential use of cottonseed oil as a base feedstock for bio-diesel production from a cost perspective. Reviewing current literature, cost is presently the main concern that deters cottonseed-based bio-diesel production. The investigation will include a cost model and economic analysis of incorporating a bio-diesel facility into an existing cottonseed oil mill. The cost model and economic analysis will determine if cottonseed oil is feasible as a bio-diesel feedstock. The model will contain detail costs of equipment, labor, material, startup, and transportation. The economic analysis will determine the investment cost and payback period, at various interest rates, of a bio-diesel facility. A sensitivity analysis will determine which parameter(s) or cost centers) is critical to the bio-diesel production system. The cost model will be applicable to any general oil milling process producer who is considering bio-diesel production.