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Biodiesel Dennis SchroederlConventional biofuels derived essentially from food-based feedstocks (e.g. oil seed crops) have seen their production costs increase in recent years due to high food prices. Advanced biodiesels from lignocellulosic feedstocks are just beginning to be produced at first-of-a-kind plants at commercial production scales. In 2012, 24 billion litres of biodiesel was produced globally virtually all of this from conventional processes.

Conventional biodiesel production costs are dominated by feedstock costs. Between 2005 and 2012 feedstock costs for biodiesel increased by 87% for soybean and 49% for rapeseed oil, with production costs averaging an estimated USD 1.3/litre of diesel equivalent in 2012. Biodiesel produced from palm oil in Malaysia and Indonesia was estimated to have lower production costs, around USD 1/litre.

Advanced biodiesel production methods are still at an early stage of commercialisation. However, with around 15 advanced biofuel plants planned to be online within the next few years, the emerging cost data suggest the outlook to 2020 is positive given the high cost reduction potential. IRENA analysis estimates that increased investment in R&D and additional experience in commercial-scale projects could reduce production costs from between USD 0.8 to USD 1.3/litre of diesel equivalent today to between USD 0.6 to USD 1.1/litre of diesel equivalent by 2020, making advanced biodiesel technologies competitive with fossil fuels.However, this will require some of the technology pathways being explored today to prove their reliablity at commercial scales.

Publication and Charts
  • Road Transport: The Cost of Renewable Solutions: Executive Summary | Full Report
  • Biodiesel charts
Advanced biofuels to be competitive with fossil fuels by 2020.       Solar PV module prices of around USD 0.75/Watt makes PV the economic solution for 1.3 billion people.       Electric vehicle battery packs to fall 40% to 55% by 2020 to cost USD 300-400/kWh in 2020.       Some of today's first-of-a-kind commercial plug-in hybrid and battery electric vehicles are economic today.       Road transport accounted for 76% of total transport demand in 2010.       Biodiesel consumption grew 42% per year between 2000-2010.       Feedstock costs account for 60-80% of total conventional ethanol production costs.       The levelised cost of electricity of wind, solar PV, CSP and biomass is declining.       Electricity from hydropower, geothermal and biomass where good resources remain are the cheapest way to generate electricity.       Renewables are increasingly the most economic solution for new grid connected capacity.       Wind turbine prices have been declining since 2009.       Renewables are becoming the economic choice for off-grid and mini-grids.       Wind turbine prices in China in 2012 were USD 620/kW.       The installed cost of wind is typically lower than coal-fired power plants in OECD countries.