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Biodiesel Business

Selling Biodiesel...is it worth it? (By Graydon Blair)

I get asked all the time what it'd take to sell Biodiesel.

My canned answer is "It ain't worth it!".

But, some are persistent and continue to want to know why I feel the way I do.

Well, let's start from the top...

When I first got into this glorious fuel, I had big dreams of making and selling Biodiesel to people and getting stinking rich (me and every other person that gets into it probably thinks the same thing....)

Well, I spent literally MONTHS researching the possibility of selling bio and in my quest to do so figured I'd be much happier teaching people how to make it themselves and selling them the supplies to do it instead.

Here's why...
1) Competition.
Everyone AND THEIR DOG wants to sell Biodiesel. As soon as someone discovers they can make the stuff, out come the dollar signs in their eyes and they start wanting to sell the stuff.

For about every 100 people that think it, 1 of them does. And, the ones that do have to fork out a lot of time, money and investment.

Let's put it this way. The competition is stiff and getting stiffer each day

2) Going Legal is a nightmare!
If you're going to sell Biodiesel and do it legally (which is the ONLY way I propose you should do it), then my friend, you are up for one heck of a big surprise.

Here's a few reasons why.
A- Permitting....
So, ya think you wanna make Biodiesel in a residence eh? Well, I bet your zoning and health department don't want you doing that. The water department would also want to talk to you and, oh yeah, how ya gonna measure out the biodiesel to sell it accurately? In comes the Standard & Weights folks.

How ya gonna tax it? The feds & the state ALWAYS want their fair share of what you sell and Biodiesel is no different.

How bout certifying you're making ASTM Bio? That ain't cheap!

Oh yeah, what about registering your fuel with the EPA? You know, because IT'S THE LAW!!! Yep. That's painful too. Why? Because to do so you'll be forced to join the National Biodiesel Board because they were the ones that did all the Health & Human Testing on the stuff and hold the proprietary information on it...and because I bet you ain't got the millions of dollars that it cost them to do the testing yourself.

Now, how about selling it & distributing it? Did you know that your trucks have to be certified? Do you have a DOT Drivers license? Whip out that Drug Screen Test! It's mandatory folks! So is a DOT physical!

And the list goes on and on and on....

For a view of what Piedmont Biofuels had to do, check out their nightmare...
http://energy.biofuels.coop/2007/01/05/the-permits/

Now, once you have all THAT done, how will you market the fuel? How will you distribute it? How will you ensure that you have enough feedstock and that the feedstock you get will always be consistent?

How will you dispose of all that glycerin? What about storing all that lye and methanol? I bet the fire marshal will have a few things to say about that....

And the list just goes on and on and on.....

So, if you think you're really up to the task and really want to give it a go, more power to you! But remember, I warned you!

...ok, seriously, if you do want to go legal and want to sell the stuff, I highly recommend a book on how to do it.

It's called Building a Successful Biodiesel Business and is published by the absolute authorities in Biodiesel in the United States.

Here's the link to it:
Biodiesel Basics

I highly recommend it.

So, if you're still seeing those dollar signs in your eyes, go for it! Just be sure to give me a ring when you need equipment! I'd be happy to hook you up!

-Graydon

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Only published comments... Jul 30 2008, 12:45 AM by Graydon Blair

Comments

 

famousbinh said:

how do i give you a ring? I'm interested in doing the same thing as you are which is selling the supplies. I'd like to be a distributor for you in my country since the pp there only know how to grow the feedstock but don't know much about the technology. I got a few interested buyers but i don't have the resources yet. I just began to dig into this.

August 17, 2008 4:49 AM
 

silverbk said:

My canned answer is also "it aint worth it" but since you are either part of the problem or part of the solution. I am choosing to be part of the solution.

I don't even make the biodiesel. I buy it from a plant. I mark it up and sell it to the final customer. Even doing this has put me into a nightmare of red tape. I can't get an answer from the state on how this product is to be taxed. For the time being I am simply collecting non discounted sales tax. Ironically if I sell B-20 there is a 20% discount on sales tax. B-100 I pay full boat, go figure.

I also had to buy a 3000 gallon truck (which you can only transport 2500 gallons in). I picked up a small flatbed to transport totes. The big truck requires a CDL with tank endorsement, Insurance heavy truck inspection and a highway use tax account. I also had to register with the US DOT and put the number on the door.

My customers are mostly farmers, landscapers and tree surgeons. I can only sell off road fuel, as collecting highway taxes is another huge ball of red tape.

Right now I am having trouble keeping up with the demand. I am in a state that taxes diesel fuel heavily (we are paying $4.79 at the pump this week) So my fuel is a good way to stretch fuel budgets. New york requires most customers to pay their highway taxes on the fuel up front and then apply for a refund at the end of the year. Most taxpayers either don't know that or don't bother with the paperwork so the state makes out like a bandit on overpaid taxes.

The plant that I buy from uses chicken tallow as feed stock, my preliminary testing of blends in my freezer is not promising, so I may out of business come cold weather, at least until spring. I cannot even sell any preblended fuel because selling petroleum in this state requires even more red tape, bonds and licenses.

August 24, 2008 12:05 PM
 

Green Blogs » Blog Archive » Selling Biodiesel…is it worth it? (By Graydon Blair) said:

Pingback from  Green Blogs  » Blog Archive   » Selling Biodiesel…is it worth it? (By Graydon Blair)

September 19, 2008 5:52 AM
 

Nehemia Kramer said:

I have strong background in Russian an then UK Oil industry, so "Going Legal is a nightmare" not exactly compare to UK and Russia. My friend from UK made real money to be basically monopolist to collect glycerin from biodiesel plants in Ukraine. Besides of legal obstacles what  else is hidden surprises an practicals level?

October 2, 2008 12:44 PM

About Graydon Blair

Born & raised in Clearfield, Utah. Father works for the railroad (Amtrak) & so I've had an interest in anything Diesel all of my life.Interested in Bio-diesel in Utah. Own a biodiesel related business."When we deal in generalities we rarely succeed, when we deal in details we rarely fail" - Thomas S. Monson
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