The profitability of Biodiesel with different organizations

The dir 30/2003 by fìxing the 5,75% target of biofuel incorporation to fossil fuel for vehiclei for 2010 has increased the interest for a further development of thè agro-energies in the EU and generated a virtuous competition among the Member States. Purpose of this paper is to analyze the dimension and profltability of the ìntegrated biodiesel chain wìth different organizations to evaluate their effectiveness in different industrial organization contest. Possible improvement of the economic performance is related with the constitution of local biofuel districts where clusters of farms producing oil seed are integrated with processors to reduce production-processin transport costs: evidences of the last 15 years suggest a decline up to 20% in current €. The 0ptimal size of plants with an higher level of exploitation of theìr capacity within an integrate organization is an important part of the cost-reducing process. This paper examines the theoretical plant size rules for a conventional processing business integrated in producer/processin enterprise, based on different forms of integration and the spatial dimension of the oilseed input market is examined for its consequences for the scale economies of biodiesel processing facilities. The analysis drives to the following conclusions: i)theoptimal size may grow further but the constrain is given by the supply of feedstock at farm level; ii) investment profitability measured with the return on capitai is convenient if the dimension of the supply area is appropriate to the processing capacity of the plant; ìii) the integrated cooperative network is improved to gain effìciency by reducing transaction costs; iv) the total producer plus processor profìts and sharing among partners change according with the type of organization used in the integrated chain.