Feasibility Study for:

Biodiesel Cooperative for

Tradesmen

Compiled by: Eric J. Nelson

Madison, WI
Feasibility Study for B.C.T. 1
Project Goals
The Feasibility Study for the Biodiesel Cooperative for
Tradesmen will explore a proposed system of biofuel
production, transportation, and utilization for a
startup business cooperative in the Madison, WI
area. With specified biodiesel production and
transportation equipment listed in the report, a
financial, environmental, and social analysis can be
utilized by the potential cooperative in order to
determine weather the proposed system be worthy
of investment.
The need for quality biodiesel fuel in Madison is a
relevant concern for eco-conscious tradesmen
attempting to lower their business related carbon
footprint. Currently there is negligible access to
locally produced Biodiesel in Madison due to the
fluctuating costs of fossil fuel diesel and lack of
knowledge with biofuel production.
This study will be evaluated by the potential cooperative
members to determine if the benefits will provide the
necessary incentive to move forward with the B.C.T.
and begin promoting its future expansion in
Madison.

Feasibility Study for B.C.T. 2

Background
Initial Cooperative members consist of a professional plastering team in
Madison, WI under the business names of Divine Construction LLC
and Artisan Exteriors LLC, along with another associate business
located in Mount Horeb, WI under the name Sign Art Studio. Each of
the members use diesel work vehicles and have interest in utilizing
20% Biodiesel (B20) as a means to reduce their carbon footprint and
take advantage of the benefits biodiesel possess over #2 diesel.
The B.C.T. represents a path for Tradesmen in the Madison area to break
away from dependence on imported fossil fuels and create a system
of sustainably produced biofuel that will impact not only the
economics of each business but more importantly address the
environmental concerns of each members fueling needs.

FOR MORE INFO...

Biodiesel Feasibility Study: An Evaluation of Biodiesel Feasibility in Wisconsin.
http://www.aae.wisc.edu/pubs/sps/pdf/stpap481.pdf

Feasibility Study for B.C.T. 3

Current Diesel Fuel Systems
Business Member #1:
Divine Construction LLC
Madison, WI

Vehicle: 1986 Chevy Blazer:

Engine: 6.2 liter
Mileage: 70K
Average MPG: 19
Annual Use: 8K Miles
Fueling Needs: 420 Gallons/yr

Feasibility Study for B.C.T. 4

Current Diesel Fuel Systems
Business Member #2:
Artisan Exteriors LLC
Madison, WI

Vehicle: 1989 Ford Ambulance:

Engine: 7.3 liter
Mileage: 77K
Average MPG: 13
Annual Use: 8K Miles
Fueling Needs: 615 gallons/yr

Feasibility Study for B.C.T. 5

Current Diesel Fuel Systems
Business Member #3:
Sign Art Studio LLC
Mount Horeb, WI

Vehicle: 1972 GMC Stepvan:

Engine: 6.5 liter
Mileage: 70K Miles
Average MPG: 14
Annual Use: 3K Miles
Fueling Needs: 215 gallons/yr

Feasibility Study for B.C.T. 6

The Cooperative Model
A cooperative is a business organization owned and
operated by a group of individuals for their mutual
benefit. A cooperative may also be defined as a
business owned and controlled equally by the people
who use its services or by the people who work there.
The members of the B.C.T. will mutually benefit under the
cooperative model and be able to collectively share its
benefits though joint startup capital, shared
responsibilities, and limited business liability.

Initial fueling needs of B.C.T. vehicles:

• 3 vehicles: +/- 1250 gallons fuel/yr
• B20 needs: +/- 250 gallons/yr

FOR MORE INFO...

People’s Fuel Cooperative: http://www.peoplesfuel.org/index.html

Feasibility Study for B.C.T. 7

The Carbon Cycle & Biofuels
Biofuels are carbon neutral, even though
burning them releases CO2. The carbon in
the biofuel comes from photosynthesis,
where CO2 is captured from the atmosphere
by a plant and turned into glucose. The
glucose can then be turned into more
complicated molecules such as sugars,
starches, oils and proteins. These oils can be
converted into biodiesel. Carbon is removed
from the atmosphere, stored in plants for a
few months, then released when the biofuel
is burned. For every gram of CO2 released
by burning a biofuel, there was a gram
removed from the atmosphere by
photosynthesis just a few months ago. This
perfect balance is why biofuels are carbon
neutral.

Feasibility Study for B.C.T. 8

Basics on Biodiesel Fuel
• Biodiesel is a registered fuel under the US EPA (Environmental
Protection Agency) and is completely legal for us in any concentration
with petroleum based diesel fuel. Biodiesel is a domestically
produced, clean-burning, renewable substitute for petroleum diesel.
Using biodiesel as a vehicle fuel increases energy security, improves
public health and the environment, and provides safety benefits.
• The United States imports more than 60% of its petroleum, two-
thirds of which is used to fuel vehicles in the form of gasoline and
diesel. The demand for petroleum imports is increasing. With much of
the worldwide petroleum reserves located in politically volatile
countries, the United States is vulnerable to supply disruptions.
• Biodiesel can be produced domestically and used in conventional
diesel engines, directly substituting for or extending supplies of
traditional petroleum diesel. It also has an excellent energy balance:
biodiesel contains 3.2 times the amount of energy it takes to produce
it.

Feasibility Study for B.C.T. 9

Processing Biodiesel
• The fuel being considered in this
feasibility study is an environmentally
friendly alternative to standard #2
diesel fuel that instead of being
derived from depleting fossil based
crude oil, is derived from locally
available, sustainable natural oils.
• Biodiesel is a motor fuel is made
essentially from vegetable oils such as
soybean, canola, sunflower, or
recycled cooking oils. A chemical
process called transesterification is
utilized to create biodiesel which is
summarized in the adjacent chart.

Feasibility Study for B.C.T. 10

Advantages of Biodiesel
• Smoother Running Engine. Biodiesel has a much higher lubricity (i.e.,
lubricating quality) than diesel fuel. That means a smoother running engine,
cleaner fuel injection components and a longer engine life. And with a cetane
rating that is substantially higher than petrol diesel, biodiesel leaves minimal
carbon deposits in vehicles engine.
• Dramatic Cost Savings. Biodiesel produced by an individual costs
substantially less than petrol diesel fuel. Individuals who invest in the
necessary equipment to produce their own biodiesel, can see a return on
investment in as little as three months.
• Renewable Resource. Unlike fuel made from a finite resource such as crude
oil, biodiesel is made from renewable organic resources that can be re-grown,
reproduced and reused. As such, it reduces our dependency on crude oil.
• Decreased Environmental Impact. Biodiesel is widely accepted as a
superior “green” alternative fuel. Because it burns significantly cleaner than
petrol diesel, it is nearly carbon neutral and non-toxic, reducing carbon
lifecycle emissions by 78%. That’s equivalent to removing 700,000 cars from
the nation’s highways. Additionally, biodiesel reduces emissions of carbon
monoxide, particulate matter (PM), and sulfates, as well as hydrocarbon and
air toxics emissions.

Feasibility Study for B.C.T. 11

Proposed Production Facility
1200ft² - Example Small Shop/Warehouse
(917 Walsh Road, Madison)

Rental unit in a multi-tenant building

conveniently located on the east side of
Madison near Hwys 30 and 51. Unit has two
10' x 10' offices, a 10' x 10' overhead garage
door plus a private entrance. Common area
maintenance including snow plowing, trash
service and lawn mowing is included in the
rent. Utilities: gas & electric, are the
responsibility of the tenant. Each unit has its
own private restroom. Three marked parking
stalls are included with each unit. The
property is protected by fencing and security
cameras.

Accessory Heating Options:

Master Heaters TA 106 100,000 BTU Kerosene/Diesel
Forced Air Heater. Runs on 8 fuels including B20.

Feasibility Study for B.C.T. 12

Mixing Biodiesel
Mixing #2 diesel and Biodiesel in the same tank
• If mixing pure biodiesel (B100) with traditional petroleum diesel, be aware of any limits
placed on the final mix ratio by the engine or heating plant being used. Many engine
manufacturers recommend the final mix be no more than B20. Some others certify their
engines for only as much as B05; others up to B30.
• The primary reason for these limits is that the "bio" portion of biodiesel can break down
rubber seals over time. You may be able to get around these limitations many times by
replacing the rubber seals for synthetic.
• Be aware that biodiesel has a cleansing effect on most tanks. It dissolves the sludge buildup
found in the bottom of some older tanks. This sudden release of sludge from the tank can
clog fuel filters. Therefore, it is best to introduce biodiesel slowly to an older tank. If your
goal is to reach a B20 mix then start with a B05 and slowly build up to a B20 over several fills
of the tank.
• Be aware that the temperature of the two fuels being mixed is important. It is not advisable
to add small amounts of B100 that are at 55 degrees (F) with large amounts of cold
petroleum diesel that has been stored outside in winter at 10 degrees (F). This will cause the
B100 to congeal almost instantly.
• If the temperatures of the two fuels are relatively warm 50 degrees (F) and higher they will
mix quite well in whatever ratio can be tolerated by your engine or heating plant.

Feasibility Study for B.C.T. 13

Equipment for Production
• Safety Gear: Safety goggles, gloves, protective apron and boots are essential.
• Chemicals: The biodiesel fuel-making process requires methanol, sulfuric acid and
catalyst along with air-tight storage containers for each.
• Biodiesel Processor: The processor converts the oil into biodiesel fuel.
• Fuel Filter: The fuel filter works to filter and remove water from the fuel. Because
initial use of biodiesel can release deposits previously accumulated on tank walls and
pipes, it’s recommended that the fuel filter be changed after the first tank of
biodiesel.
• Fuel Pump: Provides safe, efficient transfer of the fuel to your engine. Heavy duty
models with thermal overload protection, strainer and automatic nozzle provide easy
fuel transfer.
• Fuel Pre-heaters: A biodiesel fuel can sometimes gel, either due to cold
temperatures or because it’s been produced from heavily saturated fats such as
waste oil from restaurants. Fuel pre-heaters work to effectively keep biodiesel from
solidifying.
• Biocides: Biocides are an additive designed to stop the growth of microorganisms in
your fuel, thus helping preserve the life of stored biodiesel.
• Synthetic Polymer Fuel Lines: The solvent properties of biodiesel can result in a
slow degradation of rubber fuel lines over the course of months and sometimes
years. Therefore, it is beneficial to use Synthetic Polymer Fuel Lines when it comes
time for replacement if considering the use of fuel mixtures beyond B20.

Feasibility Study for B.C.T. 14

Processing
Biodiesel can be produced using a variety of
esterification technologies. The oils and fats
are filtered and preprocessed to remove
water and contaminants. If free fatty acids
are present, they can be removed or
transformed into biodiesel using special
pretreatment technologies.
The pretreated oils and fats are then mixed with
an alcohol (usually methanol) and a catalyst
(usually sodium hydroxide or potassium
hydroxide). The oil molecules (triglycerides)
are broken apart and reformed into methyl
esters and glycerin, which are then
separated from each other and purified.
Roughly speaking, 100 pounds of oil or fat are
reacted with 10 pounds of a short-chain
alcohol (usually methanol) with a catalyst to
form 100 pounds of biodiesel and 10
pounds of glycerin.

Feasibility Study for B.C.T. 15

NWR Alternative Fuels Biodiesel Processor
Proposed Unit for the B.C.T.

40-Gallon, Model# Liberty

Compact NWR Alternative

Fuels Liberty 40-gallon unit
easily converts vegetable oil
into biodiesel fuel that can be
run in any diesel engine with
little or no modifications.
Features all steel piping, digital
controlled timing system and
quality components. U.S.A.

Feasibility Study for B.C.T. 16

Key Processor Specifications
•Capacity (gal.)40
•Oil Type: New or waste vegetable oil
•Oil Reservoir (gal.)55
•Methanol (gal.)15
•Catalyst/Chemicals KOH or NaOH
•Power Requirements15 Amp / 110 Volt
•Pump 1 HP, 720 GPM
•Manufacturer Warranty: 12 months limited parts / No labor
•Typically requires less than 2 hours of hands-on time per batch

Feasibility Study for B.C.T. 17

Fuel Aggregation
The raw materials needed for the production of biodiesel need come
from various forms of vegetable oil. In terms of this study, the
proposed raw material will come from waste vegetable oil which is a
surplus waste produced at local Madison resturants and is free to small
scale biodiesel entrepreneurs in the area through multiple sources.

Waste Veggie Oil (unfiltered)

• Madison Hours: surplus of veggie oil for
use in diesel engines (or soap making or
other use). Oil comes in 5 gallon containers,
unfiltered.
• Glass Nickel Pizza: WVO collection
facility with limited access
• Sanimax: Deforest Facility: Madison’s
largest WVO collection corporation.

Feasibility Study for B.C.T. 18

Means of Transportation
The proposed system of transportation for the B100 fuel after production
is based upon the delivery of biofuel for each coop member in order
to obtain a ratio to mix B20 in their tanks while at the pump. Delivery
of B100 will be sustained on a monthly basis with the use of DOT
approved fuel carriers. Each coop member will need to invest in
various sized fuel totes and storage containers in order to top off their
rigs with B100 after fueling up at the diesel station. Required
amounts of biodiesel to diesel ratios will be assessed according to size
of fuel tanks in each coop members vehicle and biofuel ratio desired.

Feasibility Study for B.C.T. 19

Energy Output of Fuels
Energy Output Comparison BTU/gal Cetane #
#2 Diesel 140,000 48
B100 130,000 55
B20 138,000 50

Net Energy
Fuel Ratio % Gain/Loss
#2 Diesel .89 -11%
B100 3.20 220%
FOR MORE INFO...
•U.S. Dept of Energy: Energy Efficiency and Renewable Energy
http://www1.eere.energy.gov/cleancities/
Feasibility Study for B.C.T. 20
Emissions Comparison

Feasibility Study for B.C.T. 21

Startup Costs for B.C.T.
*Essential Equipment for year #1:
1. 40 gallon biofuel processor: $2650.00
2. Waste Vegetable Oil: $ 0.00
3. Methanol: 55 gallon drums (1): $ 180.00
4. Red Hot Devil Lye: 5 gallon (1): $ 70.00
5. Transfer Fuel Pump System: $ 350.00
6. Pre-filters for WVO: $ 50.00
7. Storage Tanks/totes: $ 190.00
$3850.00
*Annual Materials Cost:
1. Methanol: 55 gallon drums (1): $ 180.00
2. Red Hot Devil Lye: 5 gallon (1): $ 70.00
3. Pre-filters for WVO/accessories: $ 50.00
$ 300.00

*(based on the amount of the initial B.C.T. needs = 250 gallons Biodiesel annually)

Feasibility Study for B.C.T. 22

Financial Analysis of B.C.T.
Initial investment for members of the B.C.T. is being proposed at $200/member.
With this investment into the cooperative, each member will be reimbursed
with monthly B100 deliveries based on individual fueling needs once the
facility is up and running. Once $200 in diesel fuel offsets has been reached,
a monthly production charge of $2.00/gallon for B100 will be initiated for
cooperative members.
The estimated operational lifespan of the specified biodiesel processor and related
equipment is 15 years with light maintenance and potential upgrades as
decided upon by the cooperative.

Initial B.C.T. Business Members B100 Needs Diesel offset

(gallons/mo.) ($/mo.)

1. Divine Construction LLC 7 $22.05

2. Artisan Exteriors LLC 10.25 $32.29

3. Sign Art Studio 3.6 $11.35

Feasibility Study for B.C.T. 23

RETscreen Energy Model

Feasibility Study for B.C.T. 24

RETscreen/ Analysis
Return On Investment (ROI):
The summarized RETscreen financial analysis projects the cooperatives simple payback period to be 7.9
years when a loan is secured for 50% of the initial startup costs at 5% interest. The amount of the initial loan
is variable and dependent upon the number of cooperative members and their beginning investments into the
B.C.T. One other important factor not addressed directly in this study is the cost of utilities at the proposed
production facility. These factors will need to be evaluated upon further analysis of this preliminary feasibility
report.

Alternative Fuel infrastructure Tax Credit Details:

A tax credit is available for the cost of installing alternative fueling equipment placed into service after December 31,
2005. Qualified alternative fuels are natural gas, liquefied petroleum gas, hydrogen, electricity, E85, or diesel fuel
blends containing a minimum of 20% biodiesel. The credit amount is up to 50% not to exceed $50,000, for
equipment placed into service on or after January 1, 2009.
Link: http://www.afdc.energy.gov/afdc/laws/law/US/351
Wisconsin taxation and inspection of biodiesel being produced on any scale is a concern to be addressed by the B.C.T.
Currently all blends of biodiesel are subject to Wisconsin motor vehicle fuel tax and petroleum inspection fees.
Current exercise tax rates on motor vehicle fuel is 30.9 cents per gallon. Issues of Wisconsin taxation and fuel
licensing can be further reviewed under the “Wisconsin Guide to Building Biofuels Facilities”
Link: http://www.energyindependence.wi.gov

*Because of the economic burdens presented by biofuel taxation and inspection processes, this study has
left out potential tax credits available on state and federal levels when estimating financial viability
and analysis of the cooperative.

Feasibility Study for B.C.T. 25

Emissions Analysis:
Regulated Emissions: w/ diesel as baseline B100 B20
Total Unburned Hydrocarbons -93% -30%
Particulate Matter -30% -22%
NOx +13% +2%
Ozone Potential of Speciated HC -50% -10%

Results from GREET Fleet Footprint Calculator:

B.C.T. fleet fuel: 1250 gallons/yr Equivalent Barrels of Oil GHC Emissions
#2 Diesel 32.2 barrels 17.5 short tons
B20 25.8 barrels 14.7 short tons
B100 2.2 barrels 4.1 short tons

Feasibility Study for B.C.T. 26

The Bottem Line
Key benefits of using Biodiesel
A healthier, cleaner-burning fuel to
petrol diesel
Can be produced from recycled and
organic ingredients
Can be used interchangeably in any
diesel application, with little or no
modifications
Biodiesel is a non toxic, non flammable,
biodegradable product unlike dirty
diesel
Enables sustainable local economic
growth and eases our dependence on
foreign oil

Feasibility Study for B.C.T. 27

Conclusion
 By securing adequate financing for the startup costs associated with the Biodiesel
Cooperative for Tradesmen, the cooperatives feasibility outlook is justified. The promotion
of the B.C.T. is a key element to its creation due to its need for greater membership input.
The three businesses listed within the report create a need when running B20 that is
marginal when considering the economics of the B.C.T. project. With a greater need for
biodiesel production due to increased membership, the economics of the biofuel
cooperative is improved. A study on utilizing increased ratios of biodiesel beyond B20 in
the same business work vehicles as well as expanding its use to other diesel fuel
equipment will next be evaluated as a means to potentially increase the economic value of
the B.C.T. to its members.

 A marketing plan will be fashioned to entice future cooperative members in the Madison
area but only after further investigation be taken with the ramifications of taxation and
inspection enforcement within Wisconsin on small scale biofuel production.

Submit questions concerning the B.C.T. to:

Contact: Eric J. Nelson
Email: ericjaynelson@gmail.com
Phone: 608.516-5540

Feasibility Study for B.C.T. 28

References
• Biodiesel Feasibility Study: An Evaluation of Biodiesel Feasibility in Wisconsin.
http://www.aae.wisc.edu/pubs/sps/pdf/stpap481.pdf
• Biodiesel Handling and Use Guide: 4 th Edition: National Renewable Energy Laboratory:
http://www.osti.gov/bridge
• National Biodiesel Board
www.biodiesel.org/
• U.S. Dept of Energy: Energy Efficiency and Renewable Energy
http://www1.eere.energy.gov/cleancities/
• Advanced Energy Research Project Grants
http://www.afdc.energy.gov/afdc/laws/
• GREET Fleet Footprint Calculator
http://www.transportation.anl.gov/modeling_simulation/GREET/footprint_calculator.html
• RETScreen International
http://www.retscreen.net/ang/home.php
• PrairieFire BioFuels Education Foundation – PFBFEF
http://www.pfbfef.org

With

Feasibility Study for B.C.T. 29