One of the main stumbling blocks to making biofuels is the cost of the feedstock. And feedstock frequently involves farmers farming.
For example, it is said that making an industrial-scale biofuel operation work requires feedstock that costs between $45 and $60/ton. Since farmers were making $100/ton for making hay, a $45/ton subsidy was put into place. This makes growing feedstock for cellulosic biofuels competitive with making hay—on the mainland.
But here in Hawai‘i, making hay costs $300 per ton, instead of the $100 per ton on the mainland. Farmers won’t do it for $100 per ton.
Who will pay the difference? If the biofuel is being used to make electricity, it will obviously be the rate payer.
Will oil prices rise so high that eventually the biofuel will be cost competitive? Farming inputs and logistic costs are fossil fuel related and rise as oil prices rise. This effect is called “the receding horizon.”
But when waste products are used as the feedstock, the economics change. A good example is Pacific Biodiesel, which uses waste cooking oil. If they asked farmers to grow extra virgin olive oil to make biofuel, obviously it wouldn’t work.
There is a limit as to what can be produced. That limit is the amount of used oil available.
The same is true of the oils potentially developed from the USDA’s Zero Waste project. Its biofuel production is limited to the waste that can be converted to making oil.
The advantage of using the waste stream is that the cost of the feedstock is very low. And in the case of the Zero Waste project, it supports food security for Hawai‘i.