Value chain analysis of waste cooking oil for biodiesel production: Study case of one oil collection company in Rio de Janeiro - Brazil

Abstract

Environmental harm can be caused by improper disposal of waste cooking oil (WCO). When correctly doing so, besides promoting sustainability, WCO can be reused as raw material for the production of biodiesel. However, even though the prices of WCO are generally lower than those of virgin raw materials, the necessary supply chain for biodiesel plants may not exist or be available. One of the possible elements of such chain would be to have a collection company that processes the WCO and delivers it to the biodiesel producer. In this sense, this paper aims to develop a procedure to determine the activities and the costs related to the value chain of WCO, besides applying the procedures to a specific case in Brazil, as a means to verify whether a company that collects, processes and sells WCO to a biodiesel plant shows loss or profit. It is possible to say that the role of a collection company depends on its financial results, considering its private capital is not complemented by any support from public sector. After the application of the proposed procedures, based on Porter's (1985) theory, it was possible to identify the company's financial outcomes, in fifteen different situations, nine with profit and six with loss. It was also possible to confirm that in the cases of loss, in general there were two or more factors, such as decrease in the selling prices of processed WCO and increase of the distance between the collection company and the biodiesel plant that probably led to this undesirable result.