How to Make Money from Biodiesel Production

How to make money from biodiesel production in India

The bio-diesel production in India is carried out by ethanol. The use of ethanol or fat oil (Circus oil) which is obtained from vegetable and animal fat. The process where ethanol is used to generate bio-diesel is called etherification and trans-etherification process; bio-diesel is a renewable and organic fuel, used in industrial and automobile applications. The producers excite a reaction with the use of catalysts like acids or base catalysts.

Bio-diesel in India

Bio-diesel is a clean emission fuel that makes it eco-friendly; also the emission of bio-diesel is much less than conventional diesel. By considering all the benefits and property of bio-diesel. People are now are switching to bio-diesel instead of conventional fuel. Therefore bio-diesel is attaining the attention and the consciousness about bio-diesel is quickly increasing, so if you are thinking for Bio-diesel making business then it will be an ideal choice to get high returns in low investment.

Starting bio-diesel production business need serious planning and proper market research; the following blog might help initiate bio-diesel production plant in India.

Market potential of biodiesel production business to make huge money

The bio-diesel market in India is stable during 2016 and it quickly increased between 2017 and 2018 with new feed-stock and advanced technology. The industrial experts’ reports state that the global market for biodiesel will increase in the coming years almost double. The average bio-diesel production plant will attain up to 65 billion gallons every year.

Nowadays we see different types of engines are available for various fuels like petrol, gas, diesel, etc. We all know that diesel is the basic and most appropriate fuel for every mechanism and bio-diesel is very alike to diesel fuel, thus, there the engines need not be modified to have bio-diesel as fuel.

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Another benefit of bio-diesel is, its emission is less and is carbon-neutral fuel but make the same amount of energy as compared to other fuel. Bio-diesel is considered as environment-friendly and well-known source of fuel. Therefore the demand for the bio-diesel market in India is growing day by day.

Registrations and licenses for bio-diesel business

Registration of firm: You may begin the bio-diesel production business as proprietorship if you are a single owner. In case you have some partner with you, then register your business as a limited liability partnership (LLP) or Private Limited Company with Registrar of Companies (ROC).

ASTM-D6781 grades: For producing and marketing bio-diesel legally, the biodiesel should meet to ASTM-D6781 grade quality diesel and the process of registration and permission is time taking.

Fire safety standards and certification: Bio-diesel is a combustible liquid that is classified under class IIB. To initiate the bio-diesel production business you must register for fire safety standards and certification.

Emission permit: To start a biodiesel production plant in India you should get the department of environment emission permit per day that will be including water and waste management agreement.

Storage shed certification: Further permission including spill containment management, Bio-diesel plant, and straw Bale B100 storage shed certification must be taken.

GST registration: It is compulsory to have a GST number for every business.

Pollution certificate: Bio-diesel production could emit chemicals/ gases that may deal with the pollution, therefore, you must apply for Pollution Certificate.

MSME/SSI registrations: MSME/SSI Registrations are applied for availing subsidies and schemes for business from the government.

Fuel tax: Lastly, you must apply for motor fuel tax and floodplain determine before beginning business activities.

Area required for biodiesel production in India

While initiating bio-diesel production plant it is good to purchase land due to permission and registration issue. You must have a large tank farm, thus, and then area space must be large enough for your plant. Minimum 2000 sq ft. of the area is needed for the bio-diesel plant.

While the selection of the land it is important to check flood plain level, good access to transportation feed-stock availability, and then finalize the land. You must follow government rule incentives and proper protocol that are indicated for beginning bio-diesel production plant.

Raw materials required to make money from biodiesel production

The selection of a proper feed-stock is a crucial task to do. The type of feed-stock or raw material added is an essential factor for the generation and development of bio-diesel production plant business. The basic raw material is fat oil, restaurant grease, beef tallow, and the recycled feed-stock is the richest source for a bio-diesel production plant.

Used cooking oil to biodiesel machine: We all are aware that vegetable oil from; kitchens, hotels, and restaurants, and are the best sources of waste vegetable oil. You can utilize virgin oil but it is costly therefore we suggest the used vegetable oil.

Methanol: You can have methanol from chemical traders. It is quite costly but affordable because of its use in laboratories and industries. Methanol is the second greatest significant component in bio-diesel production next to vegetable oil. Methanol is also popular as ‘Methyl Alcohol’. It’s a very versatile chemical used in chemical laboratories and industries.

Lye: Lye is called as Potassium Hydroxide or Sodium Hydroxide and acts as catalysts during the reaction of the methanol with oil. Lye majorly used in soap making and lye is popular in the market as ‘Caustic Soda’.

Bio-diesel production plant includes the following equipment such as bio-diesel tank and bio-diesel processing system.

  • Feed-stock List
  • Lye
  • Methanol
  • Recycled Vegetable Oil
  • Restaurant grease
  • Sodium hydroxide
  • Soybean oil
  • Sunflower oil

Machinery requirement to make money from Biodiesel production business

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Machinery for biodiesel production.
Machinery for biodiesel production.

You can have the bio-diesel in two ways one is through fat oil where vegetable oil is used as feed-stock. Another way for biodiesel production is through methanol.

List of machinery required for biodiesel production

  • Thermometer
  • Conical flask
  • Hot plate
  • Magnetic stirrer
  • Oven
  • Separating funnel
  • Water bath
  • Digital weighing balance
  • Hydrometer
  • Measuring cylinder
  • Pipette
  • Retort stand
  • Stopwatch

The process for biodiesel business production to make money from it

Apart from all these, you might think ‘how is biodiesel made’ in India. The below steps should be followed to start the manufacturing process of bio-diesel:

Oil filtration: Vegetable oil is filtered using a paint filter, which filters the food or other impurities present in the oil and thus leaving uniform oil.

Desolation: Add 200 ml of methanol in the blender or mixer, and ensure you prevent any spill by setting the blender at low speed.

Next, add 3.5 Gram of Lye: Lye has the property to absorb the moisture from the air and gain weight, make sure the lye is tightly sealed while taking the weight.

Formation of Sodium Methoxide: The reaction between methanol and lye is generated Sodium methoxide which it should not be allowed to settle down for long, allow lye for approx. 5 minutes to completely dissolved in methanol. While desolation sodium methoxide will break rapidly so proceed to the next step of bio-diesel production once lye gets completely dissolved.

Oil heating: Heat 1 liter of vegetable oil to 55°C to 60°C, then add the hot oil in the mixture, allowing it to merge with the Sodium methoxide for 20 to 30 minutes. This gives out products that are biodiesel and glycerine.

Pours mixture in the container: Pour the mixture of lye (Sodium methoxide), methanol, and vegetable oil in the container and allow the mixture to settle down.

Step 1 Sedimentation: Between 8 to 12 hrs, the mixture will separate into two layers, the top layer of bio-diesel and the other is of glycerine. Bio-diesel is having less density than glycerine so it will float on the glycerine.

Separation of layers

Allow mixture to sit down for many hours, when the glycerine and bio-diesel get completely separated, carefully keep the top layer to use as bio-diesel. Separate the top layer using a pump or baster.

Disposer of glycerin

Dispose of the glycerine properly: check for the local waste disposal organization for glycerine disposal. By-product glycerine can also be used as raw material for soap making.

Water washing: If the process is done properly then the bio-diesel can be used directly but if the bio-diesel is having impurities then we must remove it using water washing. Water washing is the process where bio-diesel is mixed with the water, now being heavier water will set down the container and absorbed the catalyst, alcohol, and soap.

Separation of biodiesel

Once all the impurities are absorbed then the water will get removed from the container and we get the pure biodiesel fuel.

Bio-diesel production cost

The bio-diesel production cost is a little high even though the bio-diesel raw material cost is low but setting up the biodiesel blending in India is costly but affordable, so you can start the plant as you can avail many government subsidies and schemes available to establish the plant. The total costs involved in setting up the bio-diesel plant are Rs. 10 lakhs to 15 lakhs. For more details, you can go through the biodiesel plant project report. 

Subsidy on biodiesel plant in India

As it is an eco-friendly project government of India is providing various subsidies and schemes to encourage production. The rural development ministry has is providing gross budgetary support of Rs.1,340 crores. The government provides 30% of subsidies for the bio-diesel plant in India.

How to sell biodiesel

You must think of the strategies that can aid you in successfully marketing your bio-diesel.

Local market: The demand and use of bio-diesel are growing worldwide and people are aware of the use of bio-diesel so you must not do any research about the bio-diesel market. While selling bio-diesel in the market you must be anchored on a good property and eco-friendly uses of bio-diesel, just aware people about the safety and eco-friendly nature of the fuel and how it is more beneficial instead of conventional fuel. The few places that can be reached to sell bio-diesel are mention below.

  • Hotels
  • Resorts
  • Farms
  • Offices
  • Industries
  • Universities


  1. Biodiesel plants .. Good idea.
    How to get raw material from plant is not suggest. Produced raw material by vegetables r most important.


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