Abstract
Biofuels have become more attractive recently because of its environmental benefits. Biofuels production costs can vary widely by feedstock, conversion process, scale of production and region. On an energy basis, ethanol is currently more expensive to produce than gasoline in all regions considered. Only ethanol produced in Brazil comes close to competing with gasoline. Ethanol produced from corn in the US is considerably more expensive than from sugar cane in Brazil, and ethanol from grain and sugar beet in Europe is even more expensive. For biofuels, the cost of feedstock is a major component of overall costs. Production costs for ethanol are much lower in countries with a warm climate, with Brazil probably the lowest-cost producer in the world. Production costs in Brazil, using sugar cane as the feedstock, have recently been recorded at less than half the costs in Europe. The generally larger US conversion plants produce biofuels, particularly ethanol, at lower cost than plants in Europe. In particular, the cost of producing oil-seed-derived biodiesel is dominated by the cost of the oil and by competition from high-value uses like cooking. The biggest difference between biofuels and petroleum feedstocks is oxygen content. Biofuels have oxygen levels from 10-45% while petroleum has essentially none making the chemical properties of biofuels very different from petroleum. Oxygenates are just pre used hydrocarbons having structure that provides a reasonable antiknock value.