Biodiesel

AAA

DEFINITION of 'Biodiesel'

A fuel derived from organic oils, such as vegetable oil, rather than petroleum. Biodiesel's use and production are increasing. It's typically used for aircraft, vehicles and as heating oil. Biodiesel filling stations are common throughout Europe and as of 2008 they are becoming more common in North America.

The price gap between traditional diesel and biodiesel is expected to narrow, as petroleum based products become scarcer. Agricultural and environmental subsidies will also help with this.

INVESTOPEDIA EXPLAINS'Biodiesel'

Not to be confused with waste vegetable oils (WVO), that are often used in converted diesel engines, biodiesel can be used in diesel engines that are un-modified. Bio-diesel can be used alone, or mixed with conventional hydrocarbon based diesel.

It is important to note, that although biodiesel can be used in almost all modern diesel engines, it will degrade rubber components in older vehicles a lot faster than with traditional diesel. Older vehicles are recommended to upgrade their rubber parts with a non-reactive product known as FKM, if they are planning on using biodiesel in their vehicle.

RELATED TERMS
  1. Organization Of Petroleum Exporting ...

    An organization consisting of the world's major oil-exporting ...
  2. Oil Sands

    Sand and rock material which contains crude bitumen (a heavy, ...
  3. Peak Oil

    A hypothetical date referring to the world's peak crude oil production, ...
  4. Petrodollars

    The money earned from the sale of oil. The term "petrodollars" ...
  5. Green Fund

    A mutual fund or other investment vehicle that will only invest ...
  6. Barrels Per Day - B/D

    A measure of oil output, represented by the number of barrels ...
Related Articles
  1. Fundamental Analysis

    The Green Marketing Machine

    Don't let corporations greenwash their dirty laundry. Learn how to spot a phony.
  2. Insurance

    Green Investors Get Heard

    Find out how to make your portfolio and the companies in it greener.
  3. Bonds & Fixed Income

    Green Bonds: Fixed Returns To Fix The Planet

    Fixed-income investors are no longer left out of the green investing revolution.
  4. Investing

    Clean Or Green Technology Investing

    Innovations in energy and consumption grow as companies adopt them to reduce costs.
  5. Mutual Funds & ETFs

    Evaluating Green Equity Investments

    Learn how to find stocks that are both eco-friendly and profitable.
  6. Economics

    What Does It Mean To Be Green?

    Green investing is the new buzz word for companies and investors. Find out what it means.
  7. Entrepreneurship

    Can Business Evolve In A Green World?

    Learn how global warming is starting to heat up America's corporate climate.
  8. Personal Finance

    Five Companies Leading The Green Charge

    Corporations that reduce their environmental footprint anticipate large long-term gains.
  9. Fundamental Analysis

    For Companies, Green Is The New Black

    Sustainability and reducing environmental impact are hot corporate objectives. Find out why.
  10. Personal Finance

    Building Green For Your House And Wallet

    The earth-smart money is on these environmentally friendly housing projects.
RELATED FAQS
  1. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  2. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  3. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
  4. How much oil must be produced to maintain inventory levels in the United States?

    Domestic energy investors should track the reserve inventory of crude oil for the United States, which is released in a weekly ... Read Full Answer >>
  5. To what extent is the oil and gas sector dominated by a few major companies?

    Oil and gas are two expansive and highly diverse product lines, with active competition domestically and internationally. ... Read Full Answer >>
  6. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  2. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  3. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  4. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  5. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  6. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!