Investopedia / Ryan Oakley

What Is Biodiesel?

Biodiesel is a type of combustible fuel made from organic oils, such as vegetable oil. It is viewed by many as a more environmentally-friendly alternative to petroleum.

Since the passage of the Energy Policy Act in 2005, the use and production of biofuels has been increasing in the United States. Common applications include its use as a vehicle fuel, aircraft fuel, and heating oil.

Key Takeaways

  • Biodiesel is a type of alternative fuel made by combining alcohol with vegetable oil.
  • It can be used as an energy source for vehicles and industrial applications, both alongside or as a replacement for traditional petroleum products.
  • Biodiesel is less likely to catch fire than diesel.
  • Advocates of biodiesel cite its contributions to environmental sustainability.
  • Its critics point to its potentially disruptive effect on global food production.

Understanding Biodiesel

Biofuel is produced by combining a type of alcohol—such as methanol—with a type of vegetable oil, such as those found in soybeans or palm oil. Other substances, such as animal fats or recycled cooking grease, can also be used. Once the resulting biomass is converted into liquid fuel, it can be used to supply a variety of energy needs, competing with traditional energy sources such as gasoline and crude oil.

Hybrid Fuels

Although biodiesel can be seen as an alternative to traditional fuels such as gasoline and diesel, it can also be blended with traditional hydrocarbon-based fuels in order to reduce vehicle emissions.

According to the U.S. Department of Energy, biodiesel is a relatively efficient source of energy, with soybean biodiesel producing approximately 4.56 units for every one unit of fossil fuel energy consumed throughout its life cycle.

Although biodiesel today is still far less widely used than conventional fuels, the price gap between traditional diesel and biodiesel is expected to narrow in the coming decades due to the increased scarcity and regulations affecting petroleum-based products. Additional factors, such as the presence of agricultural and environmental subsidies, may also help increase the competitiveness of biodiesel and other alternative fuel sources.

Example of Biodiesel

Today, biodiesel is used throughout the world as an alternative fuel source for automobiles and other vehicles. Its supporters cite its positive impact on air quality as compared to traditional fossil fuels. Some also view biodiesel as a safer form of fuel due to the fact that it is less combustible than petroleum diesel.

On the other hand, critics of biodiesel argue that the adoption of alternative fuels based on agricultural products could contribute to food shortages by encouraging farmers to switch from more nutritional crops to those intended to be used only as a source of fuel.

The local problems created by such changes may be most acutely felt in developing economies where local food consumers may not have the purchasing power or national infrastructure to import alternative sources of food at a large scale.

Article Sources
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  1. U.S. Department of Energy. "Biodiesel Benefits and Considerations."

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