The Economics of an Alternative Bio-energy Feedstock – The Case of Jatropha Curcas
Meng-Yee Tee, Gilroy, Cal., defended his thesis, “The Economics of an Alternative Bio-energy Feedstock – The Case of Jatropha Curcas”, Wednesday, December 9, 2009. Tee is General Manager of California Florida Plant Company, LP in Salinas, Cal. He graduated from Kansas State University in December with a Master’s in Agribusiness (MAB).
As the food versus fuel debate continues, new non-food alternatives for biofuel sources are being sought. One possibility with great potential is Jatropha curcas. It is a crop that grows well on poor arable land making it easy to grow in the tropic and sub-tropic regions and is high in oils that are easily processed into biodiesel.
“Previous Jatropha curcas projects have been started without fully understanding the necessary growing environment, seed quality, or careful assessment of the risks and costs involved,” Tee said. “As a new feedstock, it lacks adequate information to make an informed decision on investing in Jatropha curcas.”
Tee conducted an economic analysis to determine the feasibility of establishing a vertically integrated company that grows and harvests Jatropha curcas feedstock, crushes the seeds to obtain the crude oil, and processes it to obtain biodiesel and glycerin. He compared Jatropha curcas with oil palm and soybean oil, which are the two main sources of alternative feedstock biodiesel.
Vincent Amanor-Boadu, Professor of Agricultural Economics and Tee’s thesis advisor, said, “Searching for new feedstock for the emerging bioenergy economy is critical and Tee’s analysis helps us gain insights into some alternatives. The integrated system he built to conduct the analysis offers opportunities for potential investors in the emerging bioenergy market to evaluate the segment or number of segments in the biofuel supply chain they may participate in to maximize their return on investment.”
Tee’s economic analysis results for Jatropha curcas as a biofuel were favorable. He found the price per kilogram of Jatropha curcas seed is the biggest determining factor in the success of this bio-fuel feed stock. As genetic selection increases the yields, the feedstock’s potential profitability increases as a bio-fuel alternative to oil palm and soybean oil. In addition to being processed for biodiesel, the seed cake can be used to obtain fertilizer, bio-gas, and animal feedstock providing further opportunities for revenue.
“If a Jatropha curcas project is successfully managed, it has the potential to be more profitable than soy and oil palm as a feedstock alternative. Fertilizer and bio-gas products developed as by-products provide avenues for additional revenue,” Tee said.
The full thesis publication can be found online on K-State’s Research Exchange at http://hdl.handle.net/2097/2334.