Small-scale biodiesel production for on-farm energy security: a sustainable income diversification opportunity for oilseed producers

Abstract

This article reports the results of a comparative analysis of biodiesel production from two major summer oilseed crops, accounting the economic risk of production. The objective is to provide the necessary knowledge for the feasible adaptation of oilseed crops for on-farm production of biodiesel. Investment in small-scale biodiesel processing units for on-farm production was investigated at three different stages, namely the production of oilseed, processing of oil and processing of biodiesel. The annualized net revenue from the biodiesel production was calculated considering a 15-year time period. The results show the potential for a positive return from biodiesel production; however, there is a potential for negative return under low-yield scenarios. According to Monte Carlo simulation, the profit range generated across random samples for biodiesel production from both oilseed crops yields a positive net return. The probability of a negative return on biodiesel production from sunflower was lower than that from soybean.

Keywords:

• Biodiesel
• oilseed crops
• Monte Carlo simulation
• probability distribution
• sensitivity analysis
• soybean
• sunflower

Disclosure statement

No potential conflict of interest was reported by the authors.

Acknowledgements

Authors thank anonymous reviewers for their comments in improving the original version of the manuscript.