Skip to main content
SpringerLink
Log in

Economics of Oil Production from Pongamia (Millettia pinnata) for Biofuel in Australia

  • Published:
BioEnergy Research Aims and scope Submit manuscript

Abstract

Pongamia (Millettia pinnata) has been widely studied as a potential feedstock for biodiesel fuel, though little is known about its feasibility at a commercial level. Capital budgeting and cash flow analysis was conducted for a potential Pongamia plantation and crushing plant in Queensland, Australia. For annual seed yields ranging from 20 to 80 kg (in shell) per tree, the delivered cost of Pongamia oil was estimated to be between AUD $2.22 and AUD $0.64 per litre. The seed yield range of 20 to 80 kg per tree is roughly equivalent to between 7 and 29 t per hectare at a planting density of 357 trees per hectare. Major components of the delivered cost of (Pongamia) oil are the capital expenses of land acquisition, plantation establishment and the crushing plant construction. The major operational costs include mechanical harvesting; fertiliser; control of weed, pests and diseases; seed crushing; and freight of oil to a refinery. The cost items with the greatest volume sensitivity are the capital expenses, overheads (consisting mostly of salaries and wages of employees) and the expenses associated with harvesting and crushing operations. These costs could be significantly reduced if the seed yield could be increased. Several scenarios were tested to demonstrate the effect of seed yield and oil price on the profitability and cash flow of the Pongamia enterprise. At most plausible oil prices and seed yields, Pongamia oil is not expected to be economically viable.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

References

  1. Abbaszaadeh A, Ghobadian B, Omidkhah MR, Najafi G (2012) Current biodiesel production technologies: a comparative review. Energy Convers Manag 63:138–148

    Article  CAS  Google Scholar 

  2. Abdulkareem A, Jimoh A, Afolabi AS, Patience D, Odigure JO (2012) Production and characterization of biofuel from non-edible oils: an alternative energy sources to petrol diesel. INTECH Open Access Publisher

  3. Aginsight (2011) Livestock and crop industries benchmarks. Holmes Sackett Pty Ltd 13: 61–69

  4. AIP (2012a) Biofuels factsheet. Australian Institute of Petroleum. http://www.aip.com.au/pdf/BioFuelFactSheet.pdf. Accessed 13 June 2012

  5. AIP (2012b) Facts about prices in regional and country areas. Australian Institute of Petroleum. http://www.aip.com.au/pricing/facts.htm. Accessed 13 June 2012

  6. Arpiwi NL, Yan G, Barbour EL, Plummer JA (2013) Genetic diversity, seed traits and salinity tolerance of Millettia pinnata (L.) Panigrahi, a biodiesel tree. Genet Resour Crop Evol 60:677–692

    Article  Google Scholar 

  7. Beckingham C, O’Malley K (2007) Economics of NSW olive production. Primefact 409. Department of Primary Industries, New South Wales

    Google Scholar 

  8. Beer T, Grant T, Campbell PK (2007) The greenhouse and air quality emissions of biodiesel blends in Australia. CSIRO Marine and Atmospheric Research

  9. Bird P, Cayley J, Kearney G, Aldridge E (1994) Pasture growth among various tree species grown at various spacing. Australian Forest Growers conference. Launceston. Tasmania

  10. Biswas B, Scott P, Gresshoff M (2011) Tree legumes as feedstock for sustainable biofuel production: opportunities and challenges. J Plant Physiol 168:1877–1884

    Article  CAS  PubMed  Google Scholar 

  11. Bobade S, Khyade V (2012) Preparation of methyl ester (biodiesel) from karanja (Pongamia pinnata) oil. Res J Chem Sci 2(8):43–50

    CAS  Google Scholar 

  12. Brennan D (1998) Process industry economics—an international perspective, Chapter 5, Institution of Chemical Engineers, UK

  13. Bustan A, Avni A, Lavee S, Zipori I, Yeselson Y, Schaffer A et al (2011) Role of carbohydrate reserves in yield production of intensively cultivated oil olive (Olea europaea L.) trees. Tree Physiol 31:519–530

    Article  CAS  PubMed  Google Scholar 

  14. De B, Bhattacharyya D (1999) Biodiesel from minor vegetable oils like karanja oil and nahor oil. Lipid/Fett 101(10):404–406

    Article  CAS  Google Scholar 

  15. Dwivedi G, Jain S, Sharma M (2011) Pongamia as a source of biodiesel in India. Smart Grid Renew Energy 2:184–189

    Article  CAS  Google Scholar 

  16. Gomez A, Rodrigues M, Montanes C, Dopazo C, Fueyo N (2011) The technical potential of first-generation biofuels obtained from energy crops in Spain. Biomass Bioenergy 35:2143–2155

    Article  Google Scholar 

  17. Graham P, Braid A, Brinsmead T, Haritos V, Herr A, O’Connell D et al (2011) Flight path to sustainable aviation—towards establishing a sustainable aviation fuels industry in Australia and New Zealand (The Sustainable Aviation Fuel Road Map). CSIRO Energy Transformed Flagship

  18. GRDC (2013) Farm gross margin and enterprise planning guide. Grains Research and Development Corporation, Canberra

    Google Scholar 

  19. Gui MM, Lee K, Bhatia S (2008) Feasibility of edible oil vs. non-edible oil vs. waste edible oil as biodiesel feedstock. Energy 33(11):1646–1653

    Article  CAS  Google Scholar 

  20. Hayward JA, O’Connell DA, Raison RJ, Warden AC, O’Connor MH, Murphy HT, Booth TH, Braid AL, Crawford DF, Herr A, Jovanovic T (2015) The economics of producing sustainable aviation fuel: a regional case study in Queensland, Australia. GCB Bioenergy 7(3):497–511

    Article  Google Scholar 

  21. Hazrat M, Rasul M, Khan M (2015) Biofuel: an Australian perspective in abating the fossil fuel vulnerability. Procedia Eng 105:628–637

    Article  Google Scholar 

  22. Hill S, Stephensen D, Taylor B (1987) Almond yield in relation to tree size. Sci Hortic 13:97–111

    Article  Google Scholar 

  23. IEA (2015) Oil mid-term market report. Paris, available at URL: www.iea.org/publications/freepublications/publication/medium-term-oil-market-report-2015.pdf, viewed 01/04/2016

  24. Edenhofer O, Pichs-Madruga R, Sokona Y, Seyboth K, Matschoss P, Kadner S, Zwickel T, Eickemeier P, Hansen G, Schlomer S, von Stechow C (eds) (2012) IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation. Cambridge University Press, Cambridge and New York

    Google Scholar 

  25. Karmee SK, Chadha A (2005) Preparation of biodiesel from crude oil of Pongamia pinnata. Bioresour Technol 96(13):1425–1429

    Article  CAS  PubMed  Google Scholar 

  26. Kasmioui O, Ceulemans R (2012) Financial analysis of the cultivation of poplar and willow for bioenergy. Biomass Bioenergy 43:52–64

    Article  Google Scholar 

  27. Kazakoff S, Gresshoff P, Scott P (2011) Pongamia pinnata, a sustainable feedstock for biodiesel production. RSC energy and environment series, No. 3, Chapter 12, pp. 233–258

  28. Kesari V, Krishnamachari A, Rangan L (2008) Systematic characterisation and seed oil analysis in candidate plus trees of biodiesel plant. Pongamia pinnata. Ann Appl Biol 152(3):397–404

    Article  Google Scholar 

  29. Kesari V, Rangan L (2010) Development of Pongamia pinnata as an alternative biofuel crop—current status and scope of plantations in India. J Crop Sci Biotechnol 13:127–137

    Article  Google Scholar 

  30. Khairo S, Davies L (2009) Guide to machinery costs and contract rates. Primefact 913, New South Wales department of primary industries, available from URL: www.dpi.nsw.gov.au, viewed 13/06/2012

  31. Laird A (1964) Dynamics of tumor growth. Br J Cancer 18:490–502

    Article  PubMed Central  Google Scholar 

  32. Math M, Kumar SP, Chetty SV (2010) Technologies for biodiesel production from used cooking oil—a review. Energy Sustain Dev 14(4):339–345

    Article  CAS  Google Scholar 

  33. Moomaw W, Burgherr P, Heath G, Lenzen M, Nyboer J, Verbruggen A (2011) In: Edenhofer O, Pichs-Madruga R, Sokona Y, Seyboth K, Matschoss P, Kadner S, Zwickel T, Eickemeier P, Hansen G, Schlomer S, von Stechow C (eds) Annex II: methodology. In IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation. Cambridge University Press, Cambridge and New York

    Google Scholar 

  34. Murphy H, O’Connell D, Seaton G, Raison R, Rodriguez L, Braid A, et al (2012) A common view of the opportunities, challenges and research actions for Pongamia in Australia. BioEnergy Research, pp. 1–23 doi: 10.1007/s12155-012-9190-6

  35. O’Hare P, Stephenson R, Quinlan K, Vock N (2004) Macadamia grower’s handbook (part 5—economics). Department of primary industries and fisheries (DEEDI), Queensland, Available in five separate parts from URL: http://era.deedi.qld.gov.au/1964/2/mac-growing_guide_Part5.pdf, viewed 14/06/2012

  36. Odeh I, Tan D, Ancev T (2011) Potential suitability and viability of selected biodiesel crops in Australian marginal agricultural lands under current and future climates. Bioenergy Res 4:165–179

    Article  Google Scholar 

  37. Pannell D (1997) Sensitivity analysis of normative economic models: theoretical framework and practical strategies. Agric Econ 16:139–152

    Article  Google Scholar 

  38. Peirson G, Brown R, Easton S, Howard P (2002) Business finance. McGraw Hill, Sydney

  39. Pienaar L, Turnbull K (1973) The Chapman-Richards generalization of Von Bertalanffy’s growth model for basal area growth and yield in even aged stands. For Sci 19:2–22

    Google Scholar 

  40. Pretzsch H (2010) Forest dynamics, growth and yield—from measurement to model. Springer, Heidelberg

    Book  Google Scholar 

  41. Quinlan K, Wilk P (2005) Macadamia culture in NSW. Primefacts 5, NSW Department of Primary Industries, Available at URL: http://www.dpi.nsw.gov.au, viewed 17-02-2012

  42. RACQ (2011) Annual fuel price report. A report by the royal automobile club of Queensland, available at URL: http://www.racq.com.au/__data/assets/pdf_file/0014/83210/RACQ-Annual-Fuel-Price-Report-2011.pdf, viewed 13/06/2012

  43. Raju AS, Rao SP (2006) Explosive pollen release and pollination as a function of nectar-feeding activity of certain bees in the biodiesel plant, Pongamia pinnata (L.) Pierre (Fabaceae). Curr Sci 90(7):960–967

    Google Scholar 

  44. Ravetti L, Robb S (2010) Continuous mechanical harvesting in modern Australian olive growing systems. Adv Hortic Sci 24:71–77

    Google Scholar 

  45. Sangwan S, Rao D, Sharma R (2010) A review on Pongamia pinnata (L.) Pierre: a great versatile leguminous plant. Nat Sci 8:130–139

    Google Scholar 

  46. Scott P, Pregelj L, Chen N, Hadler J, Djordjevic M, Gresshoff P (2008) Pongamia pinnata: an untapped resource for the biofuels industry of the future. BioEnergy Res 1:2–11

    Article  Google Scholar 

  47. Stephenson R, Gallagher E, Doogan V (2003) Macadamia responses to mild water stress at different phonological stages. Aust J Agric Res 54:67–75

    Article  Google Scholar 

  48. Timilsina, Zilberman (2014) The impacts of biofuels on the economy, environment, and poverty: a global perspective. Natural resource management and policy. Springer-Verlag New York 41(1)

  49. Vanclay J (1995) Growth models for tropical forests: a synthesis of models and methods. For Sci 41:7–42

    Google Scholar 

  50. Venn T, Beard R, Harrison S (2000) Modelling stand yield of non-traditional timber species under sparse data. in Socio-economic evaluation of the potential for Australian tree species in the Philippines, Harrison S, Herbohn J (eds), Chapter 6, pp. 55–78

  51. Verghese S, Haire T, Krishen A (2009) Acquisition of almond orchards in Australia, Olam international limited. Presentation made by group managing director, CEO and regional head for Australia and New Zealand in Singapore, available from URL: http://olamonline.com, viewed 18/09/2009

  52. Wong J, Baker T, Duncan M, McGuire D, Bulman P (2000) Forecasting growth of key agroforestry species in south–eastern Australia, a report for the Joint Venture Agroforestry Program. Rural Industries Research & Development Corporation, Canberra, RIRDC Publication No 00/68

    Google Scholar 

  53. Zeide B (1993) Analysis of growth equations. For Sci 39:59l–616

    Google Scholar 

  54. Zhang D, Pearse P (2011) Forest economics. UBC Press, Vancouver

    Google Scholar 

Download references

Acknowledgments

We thank Julie Plummer, Deborah O’Connell, Gary Seaton, Peter Greshoff, George Muirhead and Peter Wylie for their support as subject matter experts.

Author information

Authors and Affiliations

  1. Department of Environment and Agriculture, Centre for Crop and Disease Management, Curtin University, Bentley, WA, 6102, Australia

    Amir Abadi & Hayley Maynard

  2. CCDM, GPO Box U1987, Perth, WA, 6845, Australia

    Amir Abadi

  3. Biology Department, Faculty of Mathematics and Basic Sciences, Udayana University, Bukit Jimbaran Campus, 80362, Bali, Indonesia

    Ni Luh Arpiwi

  4. Enecon Pty Ltd, Suite 5, 651 Canterbury Road, Surrey Hills, Melbourne, Victoria, 3127, Australia

    Colin Stucley

  5. Department of Parks and Wildlife Western Australia, Private Bag 104, Bentley Delivery Centre, Bentley, WA, 6983, Australia

    John Bartle

  6. SRTC Services, 2 Berwick Street, Jarrahdale, WA, 6124, Australia

    Rick Giles

Authors
  1. Amir Abadi
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Hayley Maynard
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Ni Luh Arpiwi
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Colin Stucley
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. John Bartle
    View author publications

    You can also search for this author in PubMed Google Scholar

  6. Rick Giles
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Amir Abadi.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Abadi, A., Maynard, H., Arpiwi, N.L. et al. Economics of Oil Production from Pongamia (Millettia pinnata) for Biofuel in Australia. Bioenerg. Res. 9, 874–883 (2016). https://doi.org/10.1007/s12155-016-9739-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12155-016-9739-x

Keywords

Search

Navigation