In my previous posting, I showed a mathematical equation to estimate how many gallons of biodiesel are needed to recoup the initial investment cost of the biodiesel kit:
[$400+($3.46+$0.50)*x]/x = $2.847
What I forgot to mention is the vegetable oil cost ($3.46/gallon) should be a variable, y. This is because if the ingredients’ cost ($3.46/gallon for vegetable oil, plus $0.50/gallon for lye and methanol) is already close to $4 per gallon, there is no way the average biodiesel price would be below petrodiesel’s price ($2.847/gallon).
I have since then modified the equation to:
[$400+(y+$0.50)*x]/x = $2.847
What it means is that depends on the vegetable oil’s cost, number of gallons of biodiesel needed would vary in order to be economically competitive with petrodiesel’s price.
Since the equation has two variables in it, the best way to determine the result is to set the vegetable oil’s price at a fixed value and then slowly increase it:
In the plot above, the horizontal black line is the current petrodiesel price of $2.847/gallon. If the vegetable oil cost is at $0.00/gallon, then it would take about 170 gallons to recoup the initial investment cost. The numbers of gallons increase along with the vegetable oil’s cost.
When the vegetable oil’s cost is above $1.50/gallon, it would take more than 500 gallons. For an average driver with a vehicle that gets mileage of 20 mpg, 500 gallons of fuel would last 10 months.
Jason Younker of ie85.com emailed me a photo of current B20 grade (mixture of 20% biodiesel with 80% petrodiesel) biodiesel price in