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Within the past decade, many countries have invested in renewable energy sources which have had positive implications for both agricultural and developmental economics. The innovative breakthroughs in first and second generation biofuels have emphasised the fact that we are trying to use more sustainable energy sources due to their efficiency and profitability.

According to the International Energy Agency, biofuel production has grown by over six times in the last ten years, and yet it still only accounts for around three percent of all road fuel energy used. This fact raises the question of whether we are underappreciating the benefits of green energy, or whether there are hidden costs to consider when it comes to understanding profitability. Keeping up with expenses and understanding margins is imperative in any business, big or small, and that’s why you need reliable bookkeeping services such as Xero bookkeeper Newtown to ensure that your green dream becomes a reality.

What are Biofuels?

Not everyone is aware of what biofuels are, or how they help our environment. Made out of living being, or rather the waste produced by living being, biofuel can be viewed as wood, methane from animal excrements, oil extracted from plants, and many other such examples.

According to a study conducted in Switzerland, biofuels have the ability to produce substantially fewer greenhouse emissions than its counterpart petroleum-based fuels. This discovery is an essential step concerning the protection of an already fragile environment, minimising the risk of environmental pollution caused by greenhouse gases.

The hope is that manufacturers will start to use biodiesel as a green alternative to powering domestic vehicles which are slowly but surely causing irreversible damage to our environment and future. In turn, this positive step could reduce the contamination of our soil, leading to more crops being planted –some of which could help sustain this alternative energy option. Some companies have understood the implications of such new and innovative ways of living on this borrowed Earth and have adopted using biodiesel for green or environmentally friendly vehicles.

How biodiesel and green energy could be more profitable

According to a study conducted in 2016, countries have been investing in the next-generation biofuel alternative to our conventional petrol ways, including using waste-based fuels, ethanol, or plant-derived options which could make gasoline absolute within the next generation.

Based on their initial analysis, it appears that both biodiesel and green energy could be profitable if you take a close look at the determinant factors. These include feedstock supply, monetary investment, labour, and other similar aspects. It’s important to note that the economic feasibility of a country will significantly affect production capabilities and ways in which we extract biodiesel from green alternatives.

The study suggests that to achieve this profitability stage we desire, we need to cost analyse each model approach in order to develop a constant return on investment (ROI) and biofuel production costs. The fact of the matter is that in the United States, the government has not invested as much as needed in order to see this happen. In fact, because advanced biofuels have not exceeded the initial expectations, domestic production of biofuel and its accompanying enthusiasm is low.

What most companies fail to realise is that investing in biofuels can be a slower progress. However, it is one that will yield a healthier and more attainable future for next generations, including our children’s children. Government subsidies are an essential part of this progress, and with the help of the 2007 Energy Independence and Security Act, the document mandates for innovative increases in blending biodiesel and ethanol into national transportation. In other words, this could mean an increase of 36 billion gallons annually by the year 2022.


Another way in which biodiesel and green energy are profitable relates to the idea that non-profit organisation, renewable energy enthusiasts and several government agencies offer incentives to companies and individuals who invest in biodiesel production. For example, these incentives can come in the shape of equipment purchases, loans, delayed payments, or other ways in which they reward these alternatives fuelling options. This can allow small biodiesel producers to get their footing in a somewhat niche market, but it’s essential to note that not everyone will qualify for each of these incentives. Another point to remember is that if you are given a grant, completing all the paperwork and realising if this is an option for you can prove totally worth it.

Another incentive we should talk about is location. Producing biodiesel doesn’t typically require much space, and it can be done in a garage, shop, or another small area. This quality means that when starting small, you won’t even be paying rent, significantly minimising the overall expenses per month. Other producers sometimes use an existing building and are permitted to do so free of charge, only paying for light, heat or other similar utility bills. In other words, running costs can be low or almost zero, depending on the specifics of the operation.


The labour aspect of green energy or biodiesel is different than you might expect. The typical method of calculating costs is to check the number of labour hours needed to achieve a particular result or goal, and then determine the value of having an employee perform the task. This includes things like payroll taxes, employee benefits (i.e., holiday time, health insurance, life insurance), wages, and others. To help you keep track of finances, you can always employ a bookkeeping service to maintain your financial health.


To sum up, there are multiple reasons for which green energy and biodiesel are profitable, including the small running costs associated with it. There are other factors to take into consideration as well, including safety equipment needed for adequate handling of dangerous chemicals or flammable materials, or marketing. For these services to be successful, you need to advertise your business and create a loyal consumer market which will overcome the limited historical experience we currently have with alternative renewable sources.