Vegetable Oil Economy - Market, Cost, Price, and Taxes

Market, Cost, Price, and Taxes

In Europe, straight vegetable oil (SVO) costs 54 pence/liter at most supermarkets and 42 pence/liter when bought in bulk direct from the manufacturers whereas diesel costs at least 99 pence per liter (in the UK) to well over that (depends on the year, 1.4 euro is the current market price in central Europe). In the USA, diesel costs about 0,6 $ per liter and the cheapest SVO costs about the same, with more expensive oils costing more than that (upto 7$ per gallon).

The availability of biodiesel around the World is increasing. It is estimated that by 2010 the market for biodiesel will be 7.5 billion litres (2 billion USgallons) in the U.S and 9.5 billion litres (2.5 billion USgallons) in Europe. Biodiesel currently has 3% of the diesel market in Germany and is the number 1 alternative fuel. The German government has a Biofuels Roadmap in which they expect to reach 10% biofuels by 2010 with the diesel 10% coming from fuel made from vegetable oil.

From 2005 to 2007 a number of types of vegetable oil have doubled in price. The rise in vegetable oil prices is largely attributed to biofuel demand.

Much of the fuel price at the pump is due to fuel tax. If you buy vegetable oil at the grocery store it does not have such high taxes. So at times people have bought vegetable oil at the store for their cars because it was cheaper. They did this in spite of the fact that packaging by the gallon adds to the cost and it was illegal to use in a car since no fuel tax had been paid on it.

Since vegetable oil (even as biodiesel) does not contribute to greenhouse gas, governments may tax it much less than gasoline as they have done with ethanol. This would help them reach Kyoto protocol targets.