Most of the talk this year in the energy markets will emphasize green alternatives to crude oil with the movement’s emphasis being carbon emission reduction.
Green diesel and Biodiesel have been in a cut-throat battle to establish which energy source is cheaper to produce and to demonstrate which energy source can establish a lasting foothold on the fuel market share. At the onset of this new year, biofuel demonstrates an emergence as the leader in the battle to establish dominance over its weakened counterpart biodiesel. Viking Energy Group (OTCMKTS:VKIN) closed a promising deal in the fourth quarter of last year that places them in the prime position to ramp up a massive production of their green diesel this year. Their approximately 43,000,000 gallons per year certainly connotes massive production.
Let’s get the terms straight before we proceed further:
Green diesel a/k/a renewable diesel fuel is the renewable alternative to biodiesel created from biomass. Viking’s biofuel production is set to be derived from the renewable feedstock of corn and soybean. Green diesel is derived through various thermochemical processes, such as hydrotreating, gasification, and pyrolysis. Thus, renewable diesel or biofuel made from biomass is a pure fuel. In other words, these fuels can be dropped directly into your engine. No mixing or blending required. Concurrently, green diesel emits lower carbon emissions making a lesser environmental impact than biodiesel.
Biodiesel, the diluted counterpart, is made from a diverse mix of resources, such as recycled cooking oil, soybean oil, and animal fats that run through a chemical process called transesterification. Biodiesel is a blend of diesel and lesser quality biofuels (not derived from biomass), akin to ethanol blended with gasoline.
With a clear distinction between the two, we can clarify the green diesel niche further….
As one in the know would suspect, its market continues to generate lucrative growth potential.
A few key factors towards growth are:
· Growing demand for environmentally friendly fuel in road and aviation transportation.
· Increasing crude oil prices.
· Rising awareness about the use of renewables.
Additionally, the speculation for the biofuel market growth (which green diesel is a part of) demonstrates a compelling outlook. According to Precedence Research, the biofuels market is valued at US$ 120.60 billion in 2020 and is expected to nearly double to US$ 201.21 billion by 2030. Precedence Research also indicated that North America dominated the global biofuel market with more than a 36% share. This amount of dominance places VKIN in a prime position for the coming years.
Current costs to produce biofuel are on the high side. Biofuels International states the current cost is between $70 and $130 per barrel of oil equivalent.
The good news resounds that the newly acquired agreement made by Viking Energy shows tremendous promise to reduce costs. This fact directly correlates to the drastically larger production size associated with their deal made late last year. VKIN will be able to produce green diesel at a lower cost due to their treatment facility at the plant allowing them to pretreat cheaper feedstock, rather than have to acquire the more expensive pretreated feedstock.As the green diesel market pulls away from the biodiesel market and experiences substantial growth simultaneously, VKIN belongs on your watchlist.
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