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Biodiesel is defined as the mono-alkyl esters of fatty acids derived from vegetable oils or animal fats. We'll talk more about what that means later. In simple terms, biodiesel is the product you get when a vegetable oil or animal fat is chemically reacted with an alcohol to produce a new compound that is known as a fatty acid alkyl ester. A catalyst such as sodium or potassium hydroxide is required. Glycerol is produced as a byproduct. The approximate proportions of the reaction are: 100 lbs of oil + 10 lbs of methanol  100 lbs of biodiesel + 10 lbs of glycerol Soybean oil and methanol are the most popular feedstocks in the United States. Soybeans are a major U.S. crop and government subsidies are available to make the fuel economically attractive to consumers who need or want to use a nonpetroleum-based fuel. Biodiesel from soybeans is sometimes called soydiesel, methyl soyate, or soy methyl esters (SME). In Europe, most biodiesel is made from rapeseed oil and methanol and it is known as rapeseed methyl esters (RME). The University of Idaho has done considerable work with rapeseed esters using ethanol, which produces rapeseed ethyl esters (REE).
Table 1. Total Annual Production of US Fats and Oils. [from Pearl, G.G., "Animal Fat Potential for Bioenergy Use," Bioenergy 2002, The Tenth Biennial Bioenergy Conference, Boise, ID, Sept. 22-26, 2002.]
Table 2. Sales of On-highway diesel fuel
It is obvious that biodiesel is not going to completely replace petroleum-based diesel fuel in the near future. If all of the vegetable oil and animal fat were used to produce biodiesel, we could only replace about 15% of the current demand for on-highway diesel fuel. So, why bother with biodiesel? There are five primary reasons for encouraging the development of biodiesel in the United States. 1. It provides a market for excess production of vegetable oils and animal fats. There is increasing demand around the world for soybean meal to provide the protein for human and animal consumption. If new markets are not found for the soybean oil, then the price will be low and farmers will have even more difficulty producing a profit. The animal by-products industry also has a problem with more supply than the current market can absorb. This is compounded by the potential for even greater restrictions on the use of animal fats in animal feeds because of concerns about the spread of BSE (Bovine Spongiform Encephalopathy - Mad Cow Disease). 2. It decreases the country's dependence on imported petroleum. Obviously, this reason should not be overemphasized since the percentage of the country's fuel supply that can be replaced with biodiesel will be small. However, petroleum markets tend to be sensitive to small fluctuations in supply so an additional source of fuel can have a surprising impact on keeping fuel prices stable. 3. Biodiesel is renewable and contributes less to global warming than fossil fuels due to its closed carbon cycle. Because the primary feedstock for biodiesel is a biologically-based oil or fat, which can be grown season after season, biodiesel is renewable. And, since most of the carbon in the fuel was originally removed from the air by plants, there is very little net increase in carbon dioxide levels. However, some fossil carbon is contained in the methanol used to make methyl esters, and some fossil fuel is used during the production process. A life cycle study on biodiesl use in an urban bus conducted by the National Renewable Energy Laboratory [1] found that CO2 emissions were reduced by 79% for pure biodiesel compared with petroleum diesel fuel. Again, this reason should not be overemphasized because biodiesel does not have the potential to make a major impact on the total carbon dioxide production. 4. The exhaust emissions from biodiesel are lower than with regular diesel fuel. Biodiesel provides substantial reductions in carbon monoxide, unburned hydrocarbons, and particulate emissions from diesel engines. While the carbon monoxide and unburned hydrocarbons from diesels are already very low compared with gasoline engines, biodiesel reduces them further. Particulate emissions, especially the black soot portion, are greatly reduced with biodiesel. Unfortunately, most emissions tests have shown a slight increase in oxides of nitrogen (NOx) emissions with biodiesel. This increase in NOx can be eliminated with a small adjustment to the engine's injection timing while still retaining a particulate decrease. 5. Biodiesel has excellent lubricating properties. Even when added to regular diesel fuel in an amount equal to 1-2%, it can convert fuel with poor lubricating properties, such as modern ultra-low-sulfur diesel fuel, into an acceptable fuel. Reference: Sheehan, J., V. Camobreco, J. Duffield, M. Graboski, and H. Shapouri, Life Cycle Inventory of Biodiesel and Petroleum Diesel for Use in an Urban Bus," Report from the National Renewable Energy Laboratory for the U.S. Department of Energy's Office of Fuels Development and for the U.S. Department of Agriculture's Office of Energy, NREL/SR-580-24089, May 1998. These five reasons are the primary reasons for the growth in interest in biodiesel.
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