Start a Biodiesel Company

Summary: Finding safer alternatives to conventional fuel is a topic that has captured wide interests from government and concerned groups, both international and local. One alternative to petroleum fuel is biodiesel. If you want to join the cause of resorting to renewable fuel, biodiesel production is one venture you can start.

With the current drive towards being eco-friendly increasing, a biodiesel business couldn't be more relevant. Biodiesel is used as substitute for diesel whether in pure or in combination with diesel.

Biodiesel are derived from vegetable oils or animal fats, not from petroleum like diesel fuel. It is renewable and produces less exhaust pollutants compared to pure diesel fuel. Biodiesel blends are usually created at the terminal where bulk fuel product from liquid fuel refineries is distributed.

Biodiesel Business Funding

Production of biodiesel is less capital intensive compared with conventional fuel production, but still, a large capital is needed. Funding from federal and state government and venture capitalists is usually necessary, unless a prospective biodiesel company owner has all the resources to start one. Check with government offices for available grants in starting production of renewable fuels. Among the sources for information on funding are the U.S. Department of Agriculture and the U.S. Small Business Administration. A necessary tool to sell the idea of the project is a business plan that will contain all the necessary details of the project as well as projections on how the business will be some years hence.

Biodiesel Fuel Production

The raw material for making biodiesel is usually soybean, although alternatively, it could be other vegetable oils, such as corn oil, palm oil. Feedstock is processed in biodiesel plants, which use equipment such as centrifugal separators and heaters. Such plants are equipped with large tanks with accessory equipment like piping, pumps and valves. Transportation like tank trucks is a necessity to distribute the product. Biodiesel can be marketed the way conventional petroleum is for use in transportation, heating, and power generation.

Biodiesel Plant Taxes and Permits

Basic to any business is the payment of taxes. The federal tax obligations of a business will depend much on the structure that it has chosen to adopt. Aside from federal taxes, there are also state taxes to deal with. As a fuel producing facility, a biodiesel plant must also pay federal excise tax. Certain businesses require special license or permit to operate. A biodiesel plant operation in a certain area may be required to secure certain licenses in addition to the general business permit. When designing storage for example, the zoning and fire regulations of the city must be considered. Being a manufacturing plant, a biodiesel facility must environmental standards regarding use of toxic materials, emission, and disposal of pollutants. These standards could be required in the federal, state and local level.