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Bio-Diesel Production | How to Start Bio-fuel Manufacturing Business

The Bio-Diesel Production process is done by ethanol the use of ethanol or fat oil (Circus oil) which obtains from animal and vegetable fat.

The process where ethanol is used to produce bio-diesel is called Etherification and Trans-Etherification Process, Bio-diesel is renewable and organic, used in Automobile and Industrial applications,

The producers stimulate a reaction by using a catalyst which could be acids or base catalysts.

Bio-diesel is a clean emission which makes it Eco-friendly; also the emission of bio-diesel is much lower than conventional diesel fuel.

By considering all the advantages and property of bio-diesel peoples are prefer bio-diesel instead of conventional fuel.

Therefore bio-diesel is gaining the attention and the awareness about bio-diesel is rapidly increasing, so if you are looking for Bio-diesel making business then it will be a good choice to make money in low investment.

Starting Bio-Diesel Production business required serious planning and research; the following article might help you to start Bio-Diesel Production.

#1 Potential of Bio-Diesel Production Business (Market Opportunity)

The production growth of Bio-Diesel Production is steady during 2016 and it rapidly increases between 2017 and 2018 with the help of new feed-stock and advanced technology.

The industrial experts’ study predicts that the global market for bio-diesel will double over the next few years. Average Bio-Diesel Production will reach up to 65 billion gallons per year.

Various types of engine mechanism are coming nowadays that run on various fuels like petrol, gas etc.

Diesel is basic and most suitable fuel for every mechanism also bio-diesel is very similar to the diesel fuel, therefore, there is no need for modified engines to run on bio-diesel.

Another advantage of bio-diesel is, bio-diesel emission is less as compare to other fuel and make the same amount of energy.

Also, it is carbon neutral fuel which makes it environment-friendly and popular source of fuel

Therefore the market demand for bio-fuel is increasing day by day.

#2 Registrations & Licenses for Bio-Diesel Business

You need to get flood plain determination, motor fuel tax liability and a business license.

#1) Registration of Firm: You may start the bio-diesel production business either a Proprietorship or Partnership Firm.

If you are starting this business as One Person Company, then you have to register your firm as a proprietorship.

For partnership operation, you have to register as a limited liability partnership (LLP) or Pvt. Ltd. Company with Registrar of Companies (ROC).

#2) ASTM-D6781 grades: For producing and marketing bio-diesel legally it should conform to ASTM-D6781 grade quality diesel this process of registration and permits is time taking

#3) Fire safety standards and certification: Bio-diesel is a combustible liquid classified under class IIB. To initiate the Bio-Diesel Production business you need to register for fire safety standards and certification.

#4) Emission permit: Your Bio-Diesel Production unit needs to get Department of environment emission permit per day, including water and waste management agreement.

#5) Storage shed certification: Further permits including spill containment management, Bio-diesel plant, and straw Bale B100 storage shed certification.

#6) GST Registration: It is mandatory to get GST number for every business.

#7) Pollution Certificate: Bio-Diesel production may deals with the pollution therefore you need to apply for Pollution Certificate.

#8) MSME/SSI Registrations: MSME/SSI Registrations will help you to get the government facilities and schemes.

#9) Finally, you need to apply for motor fuel tax and floodplain determine before starting business action.

#3 Area Required for Bio-Diesel Production (Location)

While staring Bio-Diesel Production plant it is better to purchase land due to permit and registration issue.

You need to build a large tank farm, therefore, the area space must be large that sufficient for your plant. Minimum 2000 sq ft. area required for the Bio-Diesel plant.

Consider flood plain level, feed-stock availability in that area and good access of transportation.

You need to follow government rule incentives and proper protocol that are mention to initiate Bio-Diesel Production plant.

#4 Raw Materials for Bio-Diesel Business

Selecting good feed-stock this is a challenging task to do.

The type of feed-stock or raw material used is an important factor for the production and progress of Bio-Diesel Production plant business

Choosing cheaper feed-stock will help to dominate the industry also for increasing volume and profit.

The common raw material is fat oil, beef tallow, and restaurant grease, the Recycled feed-stock is the richest source open to a Bio-Diesel Production plant.

Vegetable Oil:

We all know where Vegetable oil is get from; kitchens, restaurants, and hotels are best sources of waste vegetable oil

You can use virgin oil but it would be costly therefore we recommend the used vegetable oil


You can get methanol from chemical merchants. It is quite expensive because of its use in industries and laboratories.

Methanol is the second most important ingredient in bio-diesel production after the vegetable oil.

Methanol is also known as ‘Methyl Alcohol’.

It’s a very versatile chemical that’s used in industries and laboratories. It’s also quite affordable.


Lye is known as Potassium Hydroxide or Sodium Hydroxide and it acts as catalysts during the reaction of the oil and methanol

Lye widely used in soap making and lye is known in the market as ‘Caustic Soda’.

Bio-Diesel Production plant includes Equipment such as tank farm and bio-diesel processing system.

Feed-stock List

  • Lye
  • Methanol
  • Recycled Vegetable Oil
  • Restaurant grease
  • Sodium hydroxide
  • Soybean oil
  • Sunflower oil

#5 Machinery for Bio-fuel Business

You can produce bio-diesel by two ways one is by fat oil where generally vegetable oil is used as feed-stock.

Another method for bio-diesel production is using methanol.

List of apparatus and machinery used in bio-diesel plant is given below

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

Related Business Ideas:

Agarbatti Making Business

Candle Making Business

Chalk Making Business

Honey Processing Business

Spice Powder Making Business

Cashew nut Processing Manufacturing

#6 Manufacturing Process for Bio-Diesel Business

Oil Filtration:

Vegetable oil is filleted with Paint Filter so the food or other impurities present in oil are removed and we get the filtered uniform oil.


Add 200 ml of Methanol: Add methanol in blender or mixer, make sure that not to spill, set the blender at low.

Add 3.5 Gram of Lye: lye has absorbed the moisture from the air, ensure that the lye is tightly sealed while taking the weight.

Formation of Sodium Methoxide :

The reaction between methanol and lye is produced Sodium methoxide which is cannot be allowed to settle down for long, Allow lye for approx 5 minutes to completely dissolved in methanol.

While desolation sodium methoxide will degrade rapidly so proceed to further step of bio-diesel production once lye is 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.

As reaction from two products are formed that are bio-diesel and glycerin.

Pours mixture in container:

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

Step 1 Sedimentation:

Between 8 to 12 hrs Mixture will separate into two layers, the top layer of bio-diesel and other is of glycerin.

Bio-diesel is having less density than glycerin therefore it will float on the glycerin

Separation of Layers

Allow mixture to sit down for several hours, when the glycerin and bio-diesel completely separated, carefully keep the top layer to use as bio-diesel.

Separate the top layer using pump or baster.

Disposer of glycerin

Dispose of the glycerin properly: look for the local waste disposal authorities for glycerin disposal.

By-product glycerin is used as raw material for Soap Making.

Water washing:

If the reaction will go well then you can use the bio-diesel directly but if the bio-diesel having impurities then you need to remove it using water washing.

Water washing is the process where bio-diesel is mixed with the water, water is heavier then bio-diesel, therefore, it will set down the container and absorbed the alcohol, catalyst, and soap.

Separation of Bio-diesel

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

#7 How to sell Bio-Diesel

You just have to prepare strategies that can help you successfully market your bio-diesel

Local market (retail market)

The demand and use of bio-diesel is increasing all over world people are aware of the use of bio-diesel so you don’t need extra study or research about bio-diesel market and it doesn’t take time to grab market for bio-diesel

While selling bio-diesel in the market you should be anchored on a good property and eco-friendly uses of bio-diesel, tell people how safer and Eco-friendly it is instead of conventional fuel

If the marketing of Bio-Diesel takes time, then don’t worry this industry has a bright future you will surely succeed

 The Places to Sell Bio-diesel Are Mention Below

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

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