Biodiesel from Palm-Oil in Panama

Central American countries see the recent biofuels boom as an economic opportunity. Taking Brazil’s experience with ethanol as a model, Central America is looking to capitalize on its abundance of tropical biofuel feedstocks to meet its own energy needs, export energy to other countries,
and support national efforts at rural development. Panama is one example of a country looking take ownership of its energy future through the use of biofuels.

Palm oil is one of the most viable biofuel feedstocks due to its exceptional biodiesel yield per hectare planted. Palm Oil is an expanding crop in Panama's agricultural portfolio. Unfortunately, rural oil palm farmers are heavily affected by highly volatile palm oil prices dictated by pronouncements out of Malaysia and Indonesia, producers of 90% of the world's Palm Oil. To gain stability, these farmers are looking possibility of producing biodiesel.

This study looked at the economics using Panamanian palm oil to locally produce biodiesel for the country. Specifically, the project worked with the largest oil palm cooperative in the country, Coopemapachi, along with a new Social Investment Non-profit, BASIS International, to determine the investment potential for the construction of biodiesel plant to be operated by the cooperative.

The study identified the percentage of Panamanian diesel consumption that could come from palm-oil based biodiesel, as well as the economic conditions under which it would be more profitable for farmers to sell biodiesel than Palm Oil. The study can be used as a foundation for future studies looking at other biofuels or country scenarios.

Required resources:

1. Total project needs: $2,000