Economic Analysis of Biodiesel Production from Waste Vegetable Oil in Mexicali, Baja California

Abstract

Mexicali, capital of Baja California, Mexico, has a motor vehicle fleet of diesel estimated at 14,000 units and cargo transport. The transport cargo sector with 11,861 units, consumes about 169 million liters of diesel. The diesel used in Baja California comes from southern Mexico and is one of the causes of CO2 emissions that affect air quality in Mexicali, it is therefore important to explore options for replacing it with biodiesel, which produces less CO2 and can be obtained from waste material. Thus, in the analysis, was considered the use of waste vegetable oil from the Mexicali restaurant industry as a raw material for the production of 4.78 million liters of biodiesel energy equivalent to 4.45 million liters of diesel. The environmental benefit involving the replacement of such a volume of diesel with biodiesel is to reduce emissions by about 9,700 tons of CO2, 22 tons of SOx and 11 tons of PM10. To determine the economic feasibility of producing biodiesel, were applied the methodologies of net present value and internal rate of return. The results indicate that the production of biodiesel is profitable. However, the recovery time of investment, coupled with the uncertainty presented by the biofuels market, make necessary a policy that implements local tax resources to support the promotion, production and use of biodiesel for the transport sector. Therefore, under the circumstances considered in this analysis, the production of biodiesel is feasible if it is developed a synergy among the productive sectors, education and government. Key words: Biodiesel; Economic analysis; Waste vegetable oil; Transport cargo sector