Social benefit cost and life cycle cost analysis of sustainable biodiesel bus transport in India

ABSTRACT

This paper aims at analysing the utilisation of biodiesel for the case of bus rapid transit system (BRTS) in Ahmedabad, India, through the social benefit cost analysis (SBCA) and life cycle cost analysis (LCCA) tools. The SBCA and the LCCA have been performed for diesel and biodiesel blends B0, B5, B10, B15, B20, B30, B50 and B100. The study reveals that the overall social benefit cost ratio is close to 0.7 for diesel-based transit and can be marginally improved to 0.77 by adding biodiesel in various proportions. Given the easy transition of diesel-based transit to biodiesel-based transit coupled with improvement in benefit cost ratio, it is suggested to transition from diesel to biodiesel blended fuel. However, since the benefit cost ratio is less than 1.0, a need for alternative financial model development is identified. It is also deducted that the fuel conversion is one way to sustainable development, however, looking to the nature of social benefits; the step to development of BRTS instead of conventional bus transport can also aid sustainable development in a major way.

KEYWORDS:

• Biodiesel
• biofuel
• social benefit cost analysis
• life cycle cost analysis
• sustainable transport

Introduction

An alternative form of energy for the transport sector is biofuels, also referred as biodiesel which are derived from natural sources like crops which can be replenished more often than fossil fuel-based sources such as diesel and petrol. A variety of feedstock, for example, corn, wheat, sweet sorghum, cassava, sugarcane, soybean, rapeseed, Jatropha can be used individually or in a controlled form for the purpose of locomotion. The feedstock may be first generation (vegetable oils, corn, sunflower oil, etc.), second generation (agriculture and forest residues, grass, waste vegetables oil, Jatropha, etc.) or third generation (algal biomass) and depending on that their effects may vary. Being renewable and replenishable in nature, the biofuels appear lucrative from point of view of energy security and energy independence of the nation. With the advent of the National Policy on biofuels-2018, it is clear that the Government of India encourages biofuels as an alternative to crude oil. The highest consumption of imported and petro-based oil is found in the transportation sector and therefore an obvious indication is made to modify the current fossil fuel practices for transportation. A suggested 20% blending of biofuels is found in the policy but varies in practice at fuel stations in India. Enabling mechanisms to encourage biofuels such as minimum support price for biodiesel oil seeds, species identification, standards and certifications, surplus production to ensure availability and other financial, fiscal, and institutional frameworks in this direction were indicated in the policy document. The present paper aims at exploring the possibilities of using biodiesel in bus rapid transit system (BRTS), India, and to compute social benefit cost analysis (SBCA) and life cycle cost analysis (LCCA) of the same to find out the financial and technical feasibility of the project.

Literature review

Biodiesel as alternative fuel technology

The available literature on biofuels include technical, environmental and economic feasibility; energy and emission effects of biofuels; feedstock types, blends and fundamental performance effects; effect of nanoparticles and other additives on biofuels, and other sustainability effects. Gebremariam and Marchetti (2018) in their paper on economics of biodiesel production clearly reflect that biodiesel is not a complete substitute of diesel, mainly because of its higher cost of production. Equipment cost is a major component of capital investment cost of the biodiesel plant, and cost of feedstock is a major component of operational cost of the biodiesel plant.

Economic and environmental benefits have been recommended by researchers through technology improvement. For instance, Caliskan (2017) recommended the use of genetically modified biodiesel with an aim to have better enviro-economic gains. Technology improvement for India and other countries has also been suggested looking into other sustainability aspects. Dwivedi et al., (2011) recognised Pongamia as a potential feedstock for biodiesel production in India given its various practical advantages such as non-edibility, ability to grow in all types of soil, requirement of small input and management, good productive life, high percentage yield and so forth. In another instance, Sharma and Singh (2017) suggest microalgae as suitable feedstock for India to have less impact on the use of fertile land, competition with food crop, GHG emission reduction potential and international dependency. International practices of microalgae-based biodiesel productions have been reviewed by them and suitable technological evolvement identified.

An interesting temporal study by Naylor and Higgins (2017) presents the last decade trend of biodiesel and predict the risky scenario for the coming decade. They establish the relative growth of biodiesel production in the decade of 2005–2015, at a good 23% per annum. It is indicated that this could be a result of high crude oil prices (which have gone down since 2014). It is also indicated that this dramatic biodiesel production increase has occurred due to strong policy directives, subsidies, trade policies, agricultural interest protection, rural economic development, energy security and climate targets. The authors present several country-specific case studies and predict the 2020 onward scenario as risky and market-wise uncertain due to large social costs dominating over policies. This indicates all the more reason to explore the social benefits and costs as opposed to the 16% fuel subsidy offered by the Government of India on biodiesel.

For the same decade spanning 2005 to 2016, Moreno-Pérez et al., (2017) studied the business concentration of biodiesel industry in Brazil in particular and found that the period from 2005 to 2011 marked a deconcentration in Brazilian biodiesel industry whereas from 2011 to 2016 indicated stability. The research also illustrates that biodiesel is produced by fewer companies and plants with the passage of years and different business models exist among them. Similar potential and need for biodiesel has been identified for China but as reviewed by Xu et al., (2016), the demand is not being met and continuous capital is required for the cause. The same nature of recommendations, such as raw materials’ production capacity boosting, regional dependencies, standards, tax policies and enforced applications was suggested for China as well. Similar reviews have been illustrated by other researchers on the shortfall of incentives and price reductions to boost biodiesel usage. For instance, a review of biodiesel potential for Serbia by Đurišić-Mladenović et al. (2018) revealed there is sufficient production provision for oil seed biodiesel without hampering the food and fodder industry, alternatives for eliminating ‘food versus fuel’ debate were presented but moreover, it was identified that though potential exists, governmental incentives are not lucrative for biodiesel promotion in reality and therefore they need to be strengthened to fulfill the demand. Similarly, Drabik et al. (2014) evaluated the effect of three different biodiesel interventions which were a biodiesel mandate, a tax exemption and an exogenous diesel price on the world biodiesel process. The analysis indicated that the tax exemption is more influential than the mandate and the regulation of diesel prices.

Further, Gracia et al., (2018) identify attitude factors such as use, knowledge and self-identity for market acceptance and establish the role of convenience (like to fuel station availability) and price for enhancing biodiesel use. Although the attitude factors may be more sensitive to private vehicle users, the convenience and price variables influence ground-level decisions for BRTS as well. All these factors seem to have been integrated in the model by Hombach et al., (2018) where the importance of combining political regulations with sustainability objectives has been recognised and for doing so a robust and sustainable biofuel supply chain model has been formed and applied to German biodiesel market. As part of this application, the decision-maker’s risk attitude is shown to play an important role.

Life cycle cost assessment for alternative fuel technologies

LCCA is a decision-making tool which can be effectively used to establish the economic feasibility of a project. Berawi et al. (2016) employed it for the energy infrastructure of Indonesia on a timescale indicating a positive move towards transportation sector sustainable development. Much research and testing are being conducted worldwide exploring the alternative mechanisms for vehicle transportation. Many debates have been held, and views expressed on the topic of mobility will lead to lower local emissions, and is accepted as an environmentally friendly practice compared to diesel-based mobility, there have been concerns over energy security, as well as the environmental pollution caused by the fossil fuels used for transportation. Energy security can be enhanced by promoting more usage of renewable energy. One of the significant causes of the slow pace of the adoption is the economics involved. The sustainable development of infrastructure projects such as mass rapid transit systems (MRTS) is a challenge if the mode of the operation is renewable energy based, such as electric or biodiesel vehicles. Demands for such projects need to be studied and forecast. Husin et al. (2015) also applied a system dynamic approach to forecast the demand on mega infrastructure projects.

Adheesh et al. (2016) studied the feasibility of electric buses compared to conventional diesel buses in Bangalore, India. The initial investments in electric buses were found as much higher than for conventional diesel buses. The operation and maintenance costs of electric buses were also found as very high. A study on the total cost of ownership and externalities for conventional, hybrid, and electric vehicles by Mitropoulos et al., (2017) suggests a LCCA method, which includes the external costs of emissions with more detail on the comparison with light-duty vehicles. As an outcome of the study, the researchers have a strong view on the dynamism of transport policies with respect to regional data. According to Helmers et al., (2017), most of the attempts at LCA by past researchers have been on generic vehicles. Their work aimed at developing and quantifying LCA through the real-time data of vehicles in use globally, with data pertaining to energy consumption before and after the conversion of vehicles.

Nordelöf et al. (2014) conducted a detailed literature review of the usefulness of the different methods that can be used for the life cycle assessment of the different electric vehicles. In addition, Steubing et al. (2016) developed a modular LCA approach to optimise the vital parameters involved in and associated with the value chain in the sustainable transportation sector. Bauer et al. (2015) made an assessment of the environmental performance of vehicles used at present, which was intended as used in future by computing the life cycle cost of all the available modes using a novel scenario analysis framework. Heidrich et al. (2017) studied the effectiveness of the policies and mitigation strategies pertaining to climate change which might support the uptake and use of electric vehicles. Bubeck et al. (2016) made an attempt to compute the TCO of electric vehicles in Germany. Their study highlighted that electric vehicles can be a feasible and attractive option for achieving the climate change mitigation targets of the EU and the German government. Furthermore, Jochem et al. (2016) computed the external cost components that affect electric vehicles. These costs include those of accidents, congestion, environmental pollution, climate change and noise. They observed that in most cases these costs are lower than those incurred by internal combustion engine vehicles.

LCCA research work on diesel and electric public transport buses in the United States by Cooney et al. (2013) made strong suggestions to focus on the electricity mix in the grid, while recommending the use of electric buses.

One of the challenges faced in the study is arriving at the monetisation of costs of air pollution, both for the use of diesel and for electricity generation. The external costs of emissions have been adopted from the research of Matthews et al., (2001), who estimated the unit of social damage due to air pollution from the transportation sector. Karaaslan et al., (2018) developed a hybrid input-output LCCA method to estimate the impacts on the environment, primarily greenhouse gas emissions, water consumption, and the energy consumption of sports utility vehicles. The hybrid LCCA model was supplemented by sensitivity analysis using Monte Carlo simulation. Moro and Helmers (2017) developed a new hybrid method for reducing the gap between the well-to-wheel (WTW) method and LCCA to assess the greenhouse gas (GHG) emissions from vehicles on the road.

Benefit cost assessment techniques for alternative fuel technologies

Benefit cost analysis has historically been applied to evaluate alternative transport projects and aided in decision-making and policy formulations with considerations of equity, use of discounted cash flow techniques and sensitivity analysis for cost benefit study of the future (Barrell and Hills, 1972). Although more recently, the concept of total cost analysis over traditional cost benefit analysis for comparing transport projects has also been recommended (DeCorla-Souza et al., 1997) where all the monetizable cost components including ‘cost savings’ are aggregated (these were referred to as ‘benefits’ in traditional analysis techniques).

Many researchers have brought into discussion the challenges associated with cost benefit analysis as a technique and the capacity of CBA frameworks in decision-making. Shortfalls such as incomplete analysis, uncertainty and difficulties of effect estimations (Mouter et al., 2015), the sensitive question of uncertainties in the cost benefit assessments and their influence on public infrastructure investment decisions (Asplund and Eliasson 2016), the methodological issues and corresponding models for ex-ante project assessment of cost-benefit analysis for capital intensive infrastructures (Florio and Sirtori 2016), critical questions on the importance of qualitative impacts including social, human life, natural and built environment over quantitative assessment (Hickman and Dean 2017) and on the equity perspectives (Martens and Floridea 2017) have been addressed in the context of cost-benefit method for project appraisal.

Other researchers have commented on the CBA technique as applied to assess the economies on large scale and organisational changes in infrastructure projects such as public urban transit (Viton, 1993) and the microeconomic and macroeconomic analyses tools for transportation sector as an attempt for broader (regional) economic benefits of new transportation investment (Anas et al., 2016). A broader approach for the evaluation of economic benefits of urban infrastructure with an integrated four-pronged approach accounting for the effects of consumption investment, government purchase effect and external demand (Sun and Cui, 2018a) reflected the potential of coordinated development and the same was illustrated (Sun and Cui, 2018b) regarding economic, social and environmental benefits.

In the particular context of MRTS, it has been illustrated that the indirect social effect such as ridership can work towards better benefits (White et al., 1992) and, on the other hand, subsidies and public ownership models for mass transit (Pucher and Markstedt, 1983) can also lead to wasteful cost escalation. And it has also been recommended that cost-benefit analysis should be used for regional public transport planning in healthy economies as well (Johansson et al., 2017). The social, economic and environmental impacts of public transportation have also been reviewed for meeting sustainability goals of cities and regions, and recommendations on sustainable performance of public transit have been also made (Miller et al. 2016).

Reviewing the available literature, it has been observed that the research and pilot projects available in literature indicate either small-scale specific experimental technicalities like combustion performance of a biodiesel feedstock or large-scale economic evaluation at the scale of the nation’s demand supply potential. If the technology was to be applied, it would be required to have a sense of feasibility at project scale and evaluate the impact of technology on the proposed sustainable project. To address this gap, this paper analyses and presents a systematic case evaluation considering the life cycle socio-economic-environmental aspects of biodiesel project appraisal. The project being considered in this paper is the BRTS in Ahmedabad, India. Two methods of analyses, namely, social benefit cost assessment (SBCA) and life cycle cost assessment (LCCA) have been used to deduct the potential for switching over to biodiesel as a fuel for urban mass transit.

Problem statement

The objective of this research paper is to explore the feasibility of use of green fuel like biodiesel for public mode of transportation. Detailed analyses have been carried out by the application of two decision-making tools like SBCA and LCCA to find out the economic feasibility of switching over from convention mode (use of diesel) to green mode (use of biodiesel). The biodiesel feedstock represented herein is palm stearin, a first-generation biodiesel. The comparisons made in this study are for the present scenario of diesel fuel only and for various percentages of diesel substituted by biodiesel.

Methodology

The methodology adopted for this research work is primary data research where the primary data are collected from BRTS, Ahmedabad. This primary data pertaining to total daily vehicle kilometres for Ahmedabad BRTS; total number of buses; daily ridership; average ridership fare; advertisement tariff; mode split percentage of two-wheelers and four-wheelers; vehicle operation cost of diesel buses; average trip length in Ahmedabad; average speed of bus in mixed traffic; average speed of BRTS bus; average number of LCCA for BRTS operated with bio-diesel. The detailed methodology is highlighted through trips per day; fuel consumption or mileage of the BRTS bus. This data is used for computation of SBCA and the flowchart is presented in Figures 1 and Figure 2. Sources of data include Ahmedabad Janmarg Limited (2016, 2018), Delhi Metro Rail Corporation Ltd (2014), the Automative Research Association of India (2008), the Ministry of Road transport and Highways in India (2015) and Ministry of Urban Development in India (2016). Secondary data pertaining to monetisation and valuation of environmental and social benefits and biodiesel plant details have also been used. Research done by Lele (2019), Mahadevia (2013) and Murty et al. (2006) have also been used as secondary data sources.

Figure 1. CBCA computation methodology

Figure 2. Components of life cycle cost computation

Case study and analysis

The case of Biodiesel- BRTS-Ahmedabad is evaluated for the purpose of looking at various quantifiable aspects of sustainability, and this is represented by SBCA. For this purpose, data pertaining to BRTS-Ahmedabad system and data pertaining to biodiesel fuel requirements (such as plant cost, operation cost, fuel cost, etc.) have been collected and presented in the next section. The present worth analysis in form of life cycle cost is also performed for the diesel and biodiesel situation to evaluate the impact. Many intangible parameters that remain silent in quantitative studies are beyond the scope of this paper but have been identified in the form of 20 indicators. The basic data for the Ahmedabad BRTS have been collected from various sources as listed at the end of the article. Further, transit calculations have been performed, and the following data used for SBCA and LCCA are presented in Table 1.

Table 1. Data used for LCCA and SBCA computations

S No.	Data/Parameter Description	Number/Unit
1	Total daily vehicle kms of the Ahmedabad transit system	86640
2	Total no. of buses	353
3	Daily ridership	140,000 passengers
4	Average ridership fare	INR 10/passenger
5	Advertisement tariff	INR 87,000 per bus per year
6	Diverted traffic assumed	50–50% mode split between 2 wheelers and 4 wheelers (cars)
7	Vehicle operation cost of diesel buses	INR 27/km
8	Annualised cost of conversion of technology per vehicle	INR 4622 per 2 wheeler, INR 5312 per 4 wheeler/car, INR 17212 per bus
9	Annualised incremental production cost of fuel per vehicle	INR 816 per 2 wheeler, INR 1876 per 4 wheeler/car, INR 14790 per bus
10	Value of time associated with work trips	INR 140 per hour
11	Value of time associated with non-work trips	INR 42 per hour
12	Average trip length in Ahmedabad	6.2 km
13	Average speed of bus in mixed traffic	20.65 km/h
14	Average speed of BRTS	22.5 km/h
15	Average no. of trips per day	2.59
16	Fuel consumption or mileage in km/litre	4 wheeler: 18.2 km/litre, 2 wheeler: 50 km/litre, Bus 3 km/litre

The basic data collected and assumed for biodiesel implementation is presented in Table 2.

Table 2. Data for biodiesel implementation

Sr No.	Parameter description	Cost/unit
1	Total daily consumption of fuel (diesel/biodiesel)	28,880 litres
2	Cost of diesel	INR 72.27 per litre (as on 22 September 2018)
3	Cost of biodiesel	INR 67.8 per litre (as on 22 September 2018)
4	Cost of biodiesel at 16% subsidy as per policy	INR 56.95 per litre
5	Cost of biodiesel bus	INR 7,00000
6	Cost of biofuel plant	INR 1.9 million (estimated for 30,000 litres daily capacity plant)
7	Operating cost of biofuel plant	INR 56.55 per litre

The blends of diesel and biodiesel used in the analysis are stated in Table 3.

Table 3. Blends of diesel and biodiesel considered

Sr No.	Biodiesel type	Percentage of blend
1	B100	100% Biodiesel
2	B50	50% Biodiesel + 50% Diesel
3	B30	30% Biodiesel + 70% Diesel
4	B20	20% Biodiesel + 80% Diesel
5	B15	15% Biodiesel + 85% Diesel
6	B10	10% Biodiesel + 90% Diesel
7	B5	5% Biodiesel + 95% Diesel
8	B0	0% Biodiesel + 100% Diesel

Table 4 illustrates the reduction in pollution and external costs associated with it in million INR for diesel bus and biodiesel bus functioning.

Table 4. Amount of pollution reduction and external costs of pollution

Type of pollutant	Local emissions from diesel bus ( (g/km)	Total emissions of diesel bus (tons daily)	Total emissions of biodiesel bus (tons daily)	External cost of pollutant in INR per ton (Matthews, Hendrickson, and Horvath 2001)	Total daily cost of pollution due to diesel buses (INR)	Total annual cost of pollution due to diesel buses (Million INR)	Total daily cost of pollution due to biodiesel buses(INR)	Total annual cost of pollution due to biodiesel buses (Million INR)
CO	3.92	0.34	0.09	33800	11479.45	4.19	2984.66	1.09
HC	0.16	0.01	0	104000	1441.69	0.53	374.84	0.14
NOX	6.53	0.57	0.15	182000	102968.17	37.58	26771.73	9.77
CO2	602.01	52.16	13.56	845	44073.63	16.09	11459.14	4.18
PM	0.3	0.03	0.01	279500	7264.76	2.65	1888.84	0.69
						61.04		15.87

The number of vehicle km – 86640

The total cost of pollution for various blends of diesel and biodiesel used for operation of the buses is illustrated in Table 5.

Table 5. External costs of pollution for various blends

	B100	B50	B30	B20	B15	B10	B5	B0
Diesel vehicle km (number of diesel buses * distance in km travelled by each bus per annum)	0	43320	60648	69312	73644	77976	82308	86640
Biodiesel vehicle km(number of biodiesel buses * distance in km travelled by each bus per annum)	86640	43320	25992	17328	12996	8664	4332	0
Environmental air pollution reduction cost due to bus fuel conversion from diesel to biodiesel (Million INR)	45.17	22.585	13.551	9.034	6.775	4.517	2.258	0

Biodiesel plant cost

Biodiesel plant cost (Table 6) indicates the Biodiesel plant operation cost which will depend on the amount of biodiesel and per litre operation cost listed in the data section earlier.

Table 6. Biodiesel plant operation cost

	B100	B50	B30	B20	B15	B10	B5	B0
Litres of biodiesel required for public bus system operation per annum	28880	14440	8664	5776	4332	2888	1444	0
Annual biodiesel plant operating cost (Million INR)	596	298	179	119	89	60	30	0

Fuel benefits and costs

Tables 7 and 8, respectively, indicate the amount of annual benefits and annual costs in a million INR accrued due to usage of biodiesel as fuel wholly or partially for BRTS operation.

Table 7. Benefits accrued due to biodiesel blending

Description of benefits	B100	B50	B30	B20	B15	B10	B5	B0
Total fuel consumed in litres daily	28880
Diesel fuel saved in litres daily	28880	14440	8664	5776	4332	2888	1444	0
Fuel price of diesel (INR) per litre	72.27
Annual saving in fossil fuel consumption (ceasing of diesel usage for bus operation) INR Million	762	381	229	152	114	76	38	0

Table 8. Costs due to biodiesel blending

Description of costs	B100	B50	B30	B20	B15	B10	B5	B0
Litres of biodiesel used for system operation	28880	14440	8664	5776	4332	2888	1444	0
Litres of diesel used for system operation	0	14440	20216	23104	24548	25992	27436	28880
Cost of system operation at biodiesel cost at 16 % subsidy of current cost of 67.8 which is 56.95 INR per litre	1644716	822358	493414.8	328943.2	246707.4	164471.6	82235.8	0
Cost of system operation at diesel cost at current cost of 72.27 INR per litre	0	1043579	1461010	1669726	1774084	1878442	1982800	2087158
Total cost of system operation (Million INR) annual	600.3	681.1	713.4	729.5	737.6	745.7	753.7	761.8

Cost of diesel per litre (INR) – 72.27; Cost of biodiesel per litre (INR) – 56.95.

Social benefit cost analysis (SBCA)

Benefits or costs accrued in the overall biodiesel BRTS Ahmedabad project may or may not be caused due to fuel conversion. For instance, reduction in the cost of accidents may be attributed to the construction of a corridor, and reduction in vehicle operation cost may be attributed to the inception of the BRT itself as opposed to environmental benefits attributed to fuel switchover from diesel to biodiesel. The present worth of benefits and costs is then computed using the relationships:

(1) $PWRB=\left(RR+AR\right)\left[\frac{{\left(1+i\right)}^n-1}{i{\left(1+i\right)}^n}\right]$(1)

(2) $\begin{array}{rl}& PWC=[CDC+CBP+CBPI]\\ & +[(CIM+CSO+CSM\\ & +CBPOM)((1+i{)}^n-1)/(i(1+i{)}^n)]\\ & +\left[CITMS\left\{\frac{i{\left(1+i\right)}^{Litms}}{{\left(1+i\right)}^{Litms}-1}\right\}\right.\\ & \left.+\frac{i{\left(1+i\right)}^{2\ast Litms}}{{\left(1+i\right)}^{2\ast Litms}-1}+\frac{i{\left(1+i\right)}^{3\ast Litms}}{{\left(1+i\right)}^{3\ast Litms}-1}\right]\\ & +[CBR(i(1+i{)}^{L}b)/((1+i{)}^{L}b-1)\\ & +(i(1+i{)}^{(2\ast Lb)})/((1+i{)}^{(2\ast Lb)}-1)\\ & +(i(1+i{)}^{(3\ast Lb)})/((1+i{)}^{(3\ast Lb)}-1)]\end{array}$(2)

(3) $FBCR=\frac{PWRB}{PWC}$(3)

(4) $FG=PWC-PWRB$(4)

(5) $PWVSB=\left(VOSd+FSd\right)\left\{\frac{{\left(1+i\right)}^n-1}{i{\left(1+i\right)}^n}\right\}$(5)

(6) $PWEB=\left(EBd+EBb\right)\left\{\frac{{\left(1+i\right)}^n-1}{i{\left(1+i\right)}^n}\right\}$(6)

(7) $PWSB=\left(SBtt+SBa\right)\left\{\frac{{\left(1+i\right)}^n-1}{i{\left(1+i\right)}^n}\right\}$(7)

(8) $SBCR=\frac{\left(PWRB+PWVSB+PWEB+PWSB\right)}{\left(PWC\right)}$(8)

where

PWRB: Present worth of revenue benefits (million INR);

RR: Ridership revenue (million INR);

AR: Advertisement revenue (million INR);

i: Discount rate (%);

n: Life cycle (years);

PWC: Present worth of costs (million INR);

CDC: Corridor development cost (million INR);

CBP: Cost of bus procurement (million INR);

CBPI: Cost of biodiesel plant installation (million INR);

CIM: Cost of infrastructure maintenance (million INR);

CSO: Cost of transit system operation (million INR);

CSM: Cost of transit system maintenance (million INR);

CBPOM: Cost of biodiesel plant operation and maintenance (million INR);

CITMS: Cost of intelligent transport management system (million INR);

Litms: Life of ITMS replacement (years);

CBR: Cost of bus replacement (million INR);

Lb: Life of bus replacement (years);

FBCR: Financial benefit cost ratio;

FG: Financial gap (million INR);

PWVSB: Present worth of vehicle operation and fuel cost saving benefits (million INR);

VOSd: Vehicle operation cost savings of diverted vehicles (million INR);

FSd: Fuel consumption saving of diverted vehicles (million INR);

PWEB: Present worth of environmental benefits (million INR);

EBd: Environmental benefits due to diverted vehicles (million INR);

EBb: Environmental benefits due to buses (million INR);

PWSB: Present worth of social benefits (million INR);

SBtt: Social benefits due to travel time reduction (million INR);

SBa: Social benefits due to accident reduction (million INR);

SBCR: Social benefit cost ratio.

Identification of benefits with and without fuel switchover

Therefore, the benefits have been classified into two categories, (a) Incoming funds that are benefits not caused due to fuel conversion and (b) benefits caused due to fuel conversion. A sample calculation for B20 blend has been illustrated in Table 9.

Table 9. Sample calculation for b20 blend (benefits)

Benefit head	Incoming funds (Million INR)	Benefits due to fuel conversion (Million INR)	Type	PW of incoming funds (Million INR)	PW of fuel conversion benefits (Million INR)
Ridership Revenue (RR)	511	0	Annual	4007.82	0
Advertisement Revenue (AR)	30.7	0	Annual	240.78	0
VOC Saving due to diverted traffic (VOSd)	766	0	Annual	6007.81	0
Env air pollution reduction due to 2 wheelers & cars (diverted traffic) (EBd)	144.35	0	Annual	1132.15	0
Env air pollution reduction due to bus fuel conversion from diesel to biodiesel (EBb)	0	9.03	Annual	0	70.82
Saving in travel time (SBtt)	288	0	Annual	2258.81	0
Reduction in accidents (SBa)	600.22	0	Annual	4707.59	0
Saving in fossil fuel consumption (diverted traffic) (FSd)	2298	0	Annual	18023.44	0
Saving in fossil fuel consumption (ceasing of diesel usage for bus operation) (FSb)	0	152	Annual	0	1192.15
	4638	161	Annual	36378	1262

Identification of costs with and without fuel switchover

The costs have been classified into two categories: (a) Outgoing funds that are costs not caused due to fuel conversion and (b) costs caused due to fuel conversion. A sample calculation for B20 blend has been illustrated in Table 10.

Table 10. Sample calculation for b20 blend (costs)

Cost head	Outgoing funds (Million INR)	Cost incurred due to fuel conversion (Million INR)	Type	PW of outgoing funds (Million INR)	PW of cost incurred due to fuel consumption (Million INR)
Cost of biodiesel plant installation(CBPI)	-	1.9	Capital	0	1.9
Cost of biodiesel plant operation and maintenance (CBPOM)	-	119	Annual	0	933.33
Cost of corridor development (CDC)	31042.55	-	Capital	31042.55	0
Cost of bus procurement (CBP)	2471	-	Capital	2471	0
Infrastructure maintenance cost (CIM)	384	-	Annual	3011.75	0
Cost of replacement of ITMS infrastructure (CITMS)	1707	-	Every 7 years	1279.4	0
Cost of replacement of buses (CBR)	2471	-	Every 7 years	1852.01	0
Cost of system maintenance (CSM)	790.6	-	Annual	6200.75	0
Total cost of system operation (diesel + biodiesel) (CSO)	-	729.5	Annual	0	5721.54
	38866.15	850.4	-	45857.47	6656.77

Computation of overall SBCR and SBCR due to fuel switchover

Table 11 indicates summary of present worth of all benefits and costs accrued with and without fuel switchover for all blends. Table 12 indicates the SBCR of the overall project considering all benefits and costs for all blends, whereas Table 13 indicates the SBCR of the project because of fuel conversion considering these particular benefits and costs for all blends.

Table 11. Summary of present worth of benefits and costs with and without fuel switchover

	PW of outgoing funds (Million INR)	PW of cost due to fuel conversion (Million INR)	PW of total costs (Million INR)	PW of incoming funds (Million INR)	PW of Benefit due to fuel conversion (Million INR)	PW of total benefits (Million INR)
B100	45857	9386	55244	36,78	6331	42709
B50	45857	7681	53539	36378	3165	39544
B30	45857	7001	52859	36378	1902	38281
B20	45857	6657	52514	36378	1263	37641
B15	45857	6485	52342	36378	947	37326
B10	45857	6321	52179	36378	632	37010
B5	45857	6149	52006	36378	316	36694
B0	45857	5977	51834	36378	0	36378

Table 12. SBCR of overall project for various blends

Biodiesel blends	B100	B50	B30	B20	B15	B10	B5	B0
Social benefit cost ratio (SBCR)	0.77	0.74	0.72	0.72	0.71	0.71	0.71	0.70

Table 13. SBCR considering the benefits and costs due to fuel conversion only

Biodiesel blends	B100	B50	B30	B20	B15	B10	B5	B0
SBCR due to fuel conversion	0.67	0.41	0.27	0.19	0.15	0.10	0.05	0.00

Life cycle cost analysis (LCCA)

Life cycle cost assessment (LCCA) of biodiesel BRTS Ahmedabad project has also been carried out using present worth analysis. It is quite likely that the bus operations and the plant operations may be governed by different regulating bodies, and therefore, the LCCA for both has been presented separately. The combined effect has been evaluated in the results and discussion section later. The cash flow diagrams pertaining to the overall biodiesel scenario, biodiesel bus operation and biodiesel plant operation scenario are indicated in Figures 3–5.

Figure 3. Cash flow diagram of overall biodiesel scenario

Figure 4. Cash flow diagram of biodiesel bus operation

Figure 5. Cash flow diagram of biodiesel plant operation

Ca₁ :Annual cost comprising diesel-biodiesel fuel blend, operation and maintenance, environmental and financing costs.

Ca₂ :Annual cost of biodiesel plant operation and maintenance.

Ci :Initial cost of bus procurement and biodiesel plant set up.

Crbus :Cost of bus replacement

Ca :Annual cost comprising biodiesel fuel, operation and maintenance, environmental and financing costs.

Ci :Initial cost of bus procurement.

Crbus :Cost of bus replacement.

Ca :Annual cost comprising biodiesel plant operation and maintenance and financing costs.

Ci :Initial cost of biodiesel plant set up.

The life cycle cost is computed as per following relationship,

(9) $\mathrm{L}\mathrm{C}\mathrm{C}=\mathrm{P}\mathrm{W}\mathrm{c}\mathrm{a}\mathrm{p}+\mathrm{P}\mathrm{W}\mathrm{a}\mathrm{n}\mathrm{n}+\mathrm{P}\mathrm{W}\mathrm{o}\mathrm{t}+\mathrm{P}\mathrm{W}\mathrm{f}\mathrm{i}\mathrm{n}$(9)

where

LCC: Life cycle cost (million INR);

PW_cap: Present worth of capital costs (million INR);

PW_ann: Present worth of annual costs (million INR);

PW_ot: Present worth of one time costs (million INR);

PW_fin: Present worth of financial costs (million INR).

Sample calculation for computation of SBCR and LCC is presented in Appendix 1.

Result and discussion

The life cycle cost of the process of using diesel fuel technology or biodiesel or biodiesel–diesel blends is about equal and to the order of 26,000 million INR for 25 years life at 12% discount rate. This represents about 101 million INR per kilometre of corridor for diesel transit to about 126 million INR per kilometre of corridor with biodiesel blending. The blending of biodiesel with diesel can significantly save the life cycle environmental cost which may amount to 2 to 12 million INR per kilometre depending on the percentage of diesel that is being replaced with biodiesel. The major life cycle cost component identified for both types of fuel technology is the financing cost of the transit system which amounts to about 40% to 45% of the total life cycle cost. The next major component of the life cycle cost is attributed to the cost of transit system operation and maintenance, amounting to about 28% to 42% of the total life cycle cost. The environmental cost savings accrued due to biodiesel fuel technology can amount from 2% to 10% of the life cycle cost depending upon the percentage of diesel being replaced by biodiesel.

Figure 6 illustrates the distribution of life cycle benefits of B20 blend biodiesel-based transit system over 25 years. As can be identified, various social benefits which are otherwise neglected constitute a major percentage in influencing the appraisal of the biodiesel system. Environmental benefits though expected contribute in an insignificant way in changing the benefit situation of the biodiesel transit.

Figure 6. Distribution of life cycle benefits for b20 blend biodiesel transit system

Figure 7 illustrates the distribution of life cycle costs of diesel-based transit system. The life cycle cost components of a diesel BRTS consist of (a) capital cost of bus procurement at the starting of the project, (b) one-time costs of bus replacement at every 8 years, (c) annual costs of bus transit system operation and maintenance and (d) financing charges of the capital and annual costs. The major observation that can be made through the life cycle cost assessment of diesel BRTS is that although all costs are comparatively significant, the financial charges or costs are as high as the operation and maintenance (O&M) costs. Although the cost of diesel has been considered as same over the 25 years life cycle, present trends indicate that they are expected to rise in the near future.

Figure 7. Distribution of life cycle costs for diesel transit system

Figure 8 illustrates the distribution of life cycle costs of B20 blend biodiesel-based bus transit system over 25 years. The life cycle cost components of a biodiesel-blended BRTS consist of (a) capital cost of bus procurement at the beginning, (b) one-time costs of bus replacement at every 8 years, (c) annual costs of bus transit system operation and maintenance, (d) capital cost of biodiesel plant, (e) annual cost of biodiesel plant operation and maintenance and (f) financing charges of the capital and annual costs. Similar observation can be made through the life cycle cost assessment of biodiesel BRTS on the high amount of the financial charges or costs accrued by both the biodiesel plant and the biodiesel transit system. However, as opposed to diesel, biodiesel fuel prices have been subsidised by the Government of India and are not expected to escalate in the near future. It may also be noticed that the subsidy on fuel is not sufficient to reduce the life cycle costing and more incentives especially for abating financial charges are required.

Figure 8. Distribution of life cycle costs for b20 blend biodiesel transit system

Whereas the high costs of transit system operation and maintenance may be difficult to avoid, the cost of financing the biodiesel transit system based on sustainability parameters is needed to be explored to bring a significant difference in life cycle costing of diesel and biodiesel blended fuel technologies. While shifting to the B15 blend to B85 blend, it can also be observed there is a significant rise in the cost of biodiesel plant operation and maintenance. This is attributed to the high cost of feedstock that forms the major sub-component of the biodiesel plant O&M cost. Therefore, there is a need to incentivise this part of the technology through the national biofuel policy.

The benefits for a diesel BRTS can be considered in two major categories: (a) economic and (b) social. The economic benefits are ridership and advertisement benefits, and vehicle operation cost-saving benefits. The vehicle operation cost-saving benefits are accrued because of ceasing of diesel buses and some percentage of diverted traffic reduced because of BRTS. The social benefits include accident reduction and travel time reduction. As opposed to that, the costs include (a) capital cost of corridor development and bus procurement, (b) annual cost of infrastructure maintenance, (c) one-time costs of bus replacement every 8 years and intelligent transport management system (ITMS) replacement every 7 years and (d) annual cost of system operation and maintenance.

Figure 9 illustrates the cash flow of all benefits and costs of the B20 blend of biodiesel BRTS over 25 years. The benefits for a biodiesel BRTS include environmental benefits of air pollution reduction in addition to economic and social benefits. The components of social benefits are the same as diesel BRTS. The economic cost component of biodiesel-based BRTS additionally includes the capital cost of biodiesel plant, biodiesel plant operation and maintenance cost and biodiesel transit system operation and maintenance cost. In addition, the biodiesel BRTS also offers some environmental benefits due to reduction of pollutant emissions. Figure 10

Figure 9. Cash flow diagram for life cycle benefits and costs of b20 blend biodiesel transit

Figure 10. Cash flow diagram for life cycle costs of b0, b20 and b100 blend biodiesel transit

The revenue model which is based on social marginal pricing of the infrastructure contributes to about 35% to 42% of the total benefits. A major share of benefits is accrued due to the advantages offered by BRTS alone, which amount to about 50% to 60% of the total benefits. The environmental benefits due to biodiesel blending amount to less than 4% and may be considered negligible. Similarly, whereas the costs associated with the implementation of the BRTS in general, such as corridor development, infrastructure maintenance cost, intelligent transport management system (ITMS) equipment replacement costs and system operation, and maintenance costs are significant and unavoidable, some additional costs of biodiesel plant may be expected. For the conversion of existing BRTS to biodiesel BRTS, since the costs of corridor and related infrastructure are already incurred, the investment regarding addition of biodiesel plant should be seen as a value addition to achieve environmental friendliness and energy security. However, for the new or proposed BRTS, the corridor cost incurred itself is more than 50% of the total costs.

The social benefit cost ratios of diesel-based transit are close to 0.7 and can go up to 0.77 with increasing blends of biodiesel. Although feasibility becomes a concern for less than 1.0 BCR, the existing situation of diesel will be improved by the use of biodiesel. By addressing the revenue model or alternative financial model, this figure can be improved. It can also be observed that the fuel conversion can contribute to the improvement of at least 20% of the BCR for B20 blend and increase to as much as 70% of the BCR with B100. Major contributions of benefits due to the existence of BRTS corridor itself have been observed owing to accident reduction and travel time savings.

Conclusion

The analysis carried out in this paper reflects upon the usage of biodiesel in different proportions for the scale of bus rapid transit in a metropolitan city in India. This paper mainly looks at the feasibility perspective on project scale through the instrument of social benefit cost ratio and life cycle cost assessment.

The national biofuel policy suggests the B20 blend as an indicative target. It may be noted that the state of Gujarat (as applicable to the case study), in particular, has registered very less number of biodiesel plants as well as biodiesel fuel stations.

The SBCR indicates an overall value of 0.72 for the presently recommended biodiesel blend (B20). This recommendation of B20 blend is based on the practical considerations of biodiesel availability and ease of technology transition. Use of B20 blend can be improved marginally by increasing proportion of biodiesel in the blended fuel. Since the SBCR falls short of unity, it is recommended that the biodiesel-based transit should be supported by more effective policies and incentives to promote the sustainability effect. The conversion of diesel to biodiesel B20 blend may be considered as an easy transition and should definitely be considered for the near future option for the existing BRTS. However, higher blends of biodiesel need to be evaluated prudently for the continuous availability on the scale of mass transit system before mandating. For a new or extended BRTS project, it is found that the major benefits of the system are due to the feature of the dedicated BRTS corridor and so, for the new projects and for farther future, other technologies such as electric BRTS may also be compared for viability before developing new infrastructure.

The life cycle cost assessment reveals that the only cost savings concerning external cost of environmental pollution are insufficient to compensate for the much larger costs of conversion. The most interesting revelation by the LCCA technique is the high amount of contribution that can be attributed to financing costs. Both in case of biodiesel bus operation and in case of biodiesel plant operation, it has been identified that other supporting financing mechanisms such as soft loans will be required if at all this technology transfer is to be implemented in the city. Further, it is envisaged that the regulatory authorities of biodiesel plant and bus operations will be different in which case a long time public–private partnership model may be imperative for sustained operations.

Scope for future research

It is a well-known fact that most of the biodiesel projects have not been approved by IPCC’s clean development mechanism (CDM). However, it is recommended that some qualitative value associated with this project be measured and a new method for evaluating such projects on factors in addition to emissions being developed and proposed for CDM consideration. It is also suggested that the evaluation be done at various scales of application to find an optimum trade-off for technology transfer.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Anal Sheth

Dr. Anal Sheth is former PhD student of Department of Civil Engineering, School of Technology, Pandit Deendayal Petroleum University, Gandhinagar, India. She is also working as Adjunt Professor, Faculty of Technology, CEPT University, Ahmedabad, India. Her research interests include sustainable transportation, sustainable development and transportation engineering.

Debasis Sarkar

Dr. Debasis Sarkar has been working as Associate Professor and former HOD of Department of Civil Engineering, School of Technology, Pandit Deendayal Petroleum University, Gandhinagar, India. His research interests are sustainable development, sustainable transportation, built enviornment, Building Information Modelling (BIM), project management, project risk management and green building materials and technology.

Indrajit Mukhopadhyay

Prof. Dr. Indrajit Mukhopadhyay has been working as Professor in Department of Solar Energy, Pandit Deendayal Petroleum University, Gandhinagar, India. His area of interests are high energy density Li ion battery, solar hydrogen generation and thin film solar cells in the Solar Research and Development Center, PDPU.

Appendix 1.

Sample Calculations for Social benefit cost ratio (SBCR) and Life cycle costs (LCC)

Sample calculations for SBCR

(1) $PWRB=\left(RR+AR\right)\frac{{\left(1+i\right)}^n-1}{i{\left(1+i\right)}^n}$(1)

Ridership revenue (RR) + Advertisement revenue (AR) = 511 million INR;

Discount rate, i = 12%;

Life cycle, n = 25 years;

Therefore, present worth of revenue benefits, PWRB = 4007.82 million INR.

(2) $\begin{array}{rl}& PWC=\left[CDC+CBP\right]+\left[\left(CIM+CSOM+CBPOM\right)\left\{\frac{{\left(1+i\right)}^n-1}{i{\left(1+i\right)}^n}\right\}\right]\\ & +\left[CITMS\left\{\frac{i{\left(1+i\right)}^{Litms}}{{\left(1+i\right)}^{Litms}-1}+\frac{i{\left(1+i\right)}^{2\ast Litms}}{{\left(1+i\right)}^{2\ast Litms}-1}+\frac{i{\left(1+i\right)}^{3\ast Litms}}{{\left(1+i\right)}^{3\ast Litms}-1}\right\}\right]\\ & +\left[CBR\left\{\frac{i{\left(1+i\right)}^{Lb}}{{\left(1+i\right)}^{Lb}-1}+\frac{i{\left(1+i\right)}^{2\ast Lb}}{{\left(1+i\right)}^{2\ast Lb}-1}+\frac{i{\left(1+i\right)}^{3\ast Lb}}{{\left(1+i\right)}^{3\ast Lb}-1}\right\}\right]\end{array}$(2)

Cost of corridor development, CDC = 31,042.55 million INR;

Cost of biodiesel plant, CBP = 1.9 million INR;

Cost of infrastructure maintenance, CIM = 384 million INR;

Cost of system operation and maintenance, CSOM = 729.5 + 790.6 = 1520 million INR;

Cost of biodiesel plant operation and maintenance, CBPOM = 119 million INR;

Cost of ITMS infrastructure replacement, CITMS = 1707 million INR;

Recurring period of replacement of ITMS infrastructure, Litms = 7 years;

Cost of replacement of buses, CBR = 2471 million INR;

Recurring period of replacement of buses, Lb = 7 years;

Therefore, present worth of costs, PWC = 50,043.23 million INR.

(3) $FBCR=\frac{PWRB}{PWC}$(3)

Therefore, financial benefit to cost ratio, FBCR = 0.08.

(4) $FG=PWC-PWRB$(4)

Therefore, financial gap, FG = 50,043.23 – 4007.82 = 46,035.41 million INR.

(5) $PWVSB=\left(VOS+FS\right)\left\{\frac{{\left(1+i\right)}^n-1}{i{\left(1+i\right)}^n}\right\}$(5)

Vehicle operation cost saving, VOS = 766 million INR;

Fuel savings, FS = 2298 + 152 = 2450 million INR;

Therefore, present worth of vehicle operation and fuel savings benefit,

PWVSB = 19,215.6 million INR;

(6) $PWEB=\left(EB\right)\left\{\frac{{\left(1+i\right)}^n-1}{i{\left(1+i\right)}^n}\right\}$(6)

Environmental benefits, EB = 153.38 million INR;

Therefore, present worth of environmental benefits, PWEB = 1202.97 million INR;

(7) $PWSB=\left(SB\right)\left\{\frac{{\left(1+i\right)}^n-1}{i{\left(1+i\right)}^n}\right\}$(7)

Social benefits (accident reduction and travel time saving) = 600.22 + 288 = 888.22 million INR.

Therefore, present worth of social benefits = 6966.4 million INR.

(8) $SBCR=\frac{\left(PWRB+PWVSB+PWEB+PWSB\right)}{\left(PWC\right)}$(8)

Therefore, social benefit cost ratio, SBCR = 0.63.

Sample calculations for LCC

The life cycle cost is computed as per following relationship,

(9) $\mathrm{L}\mathrm{C}\mathrm{C}=\mathrm{P}\mathrm{W}\mathrm{c}\mathrm{a}\mathrm{p}+\mathrm{P}\mathrm{W}\mathrm{a}\mathrm{n}\mathrm{n}+\mathrm{P}\mathrm{W}\mathrm{o}\mathrm{t}+\mathrm{P}\mathrm{W}\mathrm{f}\mathrm{i}\mathrm{n}$(9)

Present worth of capital costs (include cost of biodiesel plant installation and cost of bus procurement) = 2473 million INR.

Present worth of annual costs (include cost of biodiesel plant operation and maintenance, cost of infrastructure maintenance, cost of transit system maintenance and cost of transit system operation)= 15,867 million INR.

Present worth of one-time costs (include cost of replacement of ITMS infrastructure and cost of replacement of buses) = 3131 million INR.

Present worth of financial costs (include cost of interest on capital and annual financial charges) = 4745 million INR.

Life cycle cost = 2473 + 15,867 +3131 + 4745 = 26,217 million INR