Biodiesel is a biofuel which is obtained from different renewable sources of energy such as animal fats and vegetable oils etc. It is obtained through a chemical process from different naturally occurring (biological) components. Due to the shortage of conventional sources of energy like petroleum, natural gas and so on, and because of the harmful impact of these sources of energy on the environment of our planet, there has been an increase in the usage of biodiesel and the growth of biodiesel stations in the last few years. Biodiesel is a clean source of energy which is renewable and is easily obtainable compared to the conventional fuels like petroleum and diesel.
Studying Biodiesel Prices
Biodiesel can be used to run vehicles, produce heat and electricity, and in meeting the household energy needs of people. However, there has been a concern about the biodiesel prices as it is a popular belief that biodiesel is more expensive than the conventional fuels.
This is not entirely true! Even though biodiesel can be more expensive than petrol or diesel, when be purchase it from the manufacturers of bio fuels, it can be easily made at home for a much lower price. People can use different methods and technologies available which will allow them to manufacture this biofuel at home, with the help of used vegetable oils and other bi-products of cooking. Hence, biodiesel prices can be cheaper than other fuels that we use in our daily lives.
Factors Determining Biodiesel Prices
In most cases, the factors that determine the biodiesel fuel prices manufactured by different ‘clean energy’ companies are the cost of transportation and the cost of purchasing raw materials. In some places, the raw materials will be easily available while in other cases they may not be easily available.
Hence, people will need to transport the raw materials from other locations which will end up increasing the final cost. On the other hand, the companies which have easy to access to the raw materials and do not have to spend a lot of money in their transportation will be able to reduce their manufacturing cost. In turn, they will be able to reduce the final prices of the biodiesel they manufacture.
Taxes and Subsidies
In most of the states in the US, the biofuel manufacturers get a lot of subsidies from the federal government. Besides, they also get rebate on different taxes that other companies are needed to pay. For example, these companies get tax rebate on the federal excise tax. These subsidies and discounts in taxes help the companies in offering the bio fuel at a lower price.
One the other hand, people who use biodiesel to power their vehicles or meeting the energy requirements of their homes or offices also get tax discounts and subsidies from the government. Thus, it becomes easier for them to invest on biodiesel rather than investing on any conventional fuels.
Biodiesel prices are not too high most of the times and even if they are, people will be able to save a lot of money in the long run, by using biodiesel.