Tutorial Advanced FAME Price Calculator


With the change to the decarbonisation in the German market starting as of 01.01.2015 completely new requirements are in place with regard to the calculation of biodiesel prices that are in line with the market. For the classic biofuels on the basis of seeds (so-called FAME) official quotations exist at a given date or for a specific time period taking a specific CO2 savings potential as a basis. For those biofuels though that are based on the recycling of wastes and that offer a significantly higher CO2 savings potential (so-called Advanced FAME) official quotations are missing. Among other reasons this is also caused by the fact that the CO2 savings potential of waste-based fuels might fluctuate.

An Advanced FAME differs from a classic FAME merely in its higher CO2 savings value. Both fuels fulfil all the parameters of the relevant norm DIN EN 14214.

The calculation of a price that is in line with the market of a waste-based biofuel (Advanced FAME) for blending is done individually and cannot, or only barely, orientate itself on the official FAME-quotations. Actually nowadays the GHG savings potential (in %) is of central importance before the background of the introduction of the decarbonisation given that the less biofuel needs to be blended, in order to fulfil given quota, the higher the savings potential is.

In the framework of the decarbonisation the crucial price-building factors for an Advanced FAME are

1. a published so-called reference value (e.g. PLATTS ULSD or ICE Gasoil in Euro/MT) and the actual FAME market price (ex works) for a given contract period,

2. the FAME corresponding GHG value (in % savings or as emission in gCO2/MJ),

3. the GHG value of the Advanced FAME (again in % savings or as emission in gCO2/MJ) and

4. finally the specific freight costs (in Euro/MT) of the FAME respectively the Advanced FAME.

The basis for the price calculation in line with the market of a wasted-based, and therefore high CO2 savings yielding, biodiesel are the actual CO2 emissions of the finished product in comparison with the relevant fossil product. In this context the question to what extent a given amount of a specific savings potential of a product contributes to the blending target is of crucial importance.

A higher savings potential lowers the amount of biodiesel that the blender has to blend to the mineral product and lowers consequently at the same time also the freight costs if less material (with a high savings potential) needs to be transported in order to yield the same savings effect (of a product with a comparably low savings potential) of CO2. Accordingly, the usage of a product with a higher savings potential also results in a freight advantage for the buyer which is taken into account in the calculations of this calculator.

With the price calculator the advantage resulting from the better CO2 savings potential and the directly interconnected lowering of the overall freight costs of the Advanced FAME compared to the classic FAME is objectively calculated and might therefore serve as a point of orientation next to an official quotation of the FAME.

By means of this herewith made available price calculator the following values are calculated on the basis of the parameters mentioned above:

1. a price in line with the market of an Advanced FAME (Euro/MT ex works, without freight advantage)

2. a price in line with the market of an Advanced FAME (Euro/MT ex works, with freight advantage)

3. a price in line with the market of each 1% GHG savings (Euro/1%)

4. the mercantile freight advantage caused by the higher CO2 savings potential of the Advanced FAME (Euro/MT)

 

Additionally the following values are determined:

5. the overall GHG emissions of the FAME in gCO2eq/MJ

6. the overall GHG emissions of the Advanced FAME in gCO2eq/MJ

In order to take the freight costs objectively into account it is also necessary to compare the specific real costs of a transport of FAME and Advanced FAME with each other. A lower freight rate caused by a shorter delivery distance (e.g. for those FAME available at a closer proximity) is as taken into account as well as the freight advantage resulting from the higher CO2 saving potential. In order to ensure this, the actual FAME freight costs as well as the actual Advanced FAME freight costs have to be entered into the price calculator in the course of the calculations. The freight advantage is calculated from the combination of those two aspects.

User instructions

- All entry data are referring to MT (metric ton = 1 000 kg).
- The required value for a FAME GHG savings potential is in %.
- As an alternative to the savings potential the calculations can also be conducted on the basis of the actual CO2 emissions of the finished product (in gCO2eq/MJ). In this case the price calculator provides the option of entering “emission values”. The decision whether to conduct the calculations based on CO2 emission values or based on CO2 savings is made by the corresponding “switch” at the beginning of the data entry and can be changed at any time. The usage of both alternatives in a single calculation is not possible.
- The specific freight costs (FAME and Advanced FAME) have to be provided as Euro/MT for the freight from the point of origin to the point of destination. In the exceptional case that the value that needs to be entered into the field “market price FAME” includes already the delivery to the point of destination, the actual value that has to be entered into the field “freight costs FAME” is “0,00”.
- For the calculation a lower heating value of mineral diesel of 36.000 Kilojoule per 1.000 litre and for biodiesel of 33.000 Kilojoule per 1.000 litre is used. The conversion of the lower heating value to the reference value of 1.000 kg is done in case of biodiesel by using the conversion factor of 0,883 and in case of the mineral diesel by using the conversion factor 0.845.
- The calculations exclusively assume the usage of fuel and are therefore referenced to the corresponding comparator of 83,8 gCO2eq/MJ.
- The conversions of the lower heating value of the reference value 1.000 litre to MT is done in case of biodiesel by using the conversion factor for density amounting 0.883 and in case of the mineral diesel by using the density conversion factor 0.845.
- In some cases values are provided as a recommendation but can be overwritten at any point in time.
- The comma (,) that separates decimals is replaced automatically by a dot (.). A dot cannot be used while entering values in order to denote any thousands digits.
 

Description of fields

As already outlined the calculation of an Advanced FAME price that is in line with the market is based on the factors “diesel price”, “production price FAME“, “GHG emissions” (respectively savings) and “freight”. In the following the specific entry fields are described:

ENTRY: Contract Period

Requires the entry of the period of time (format: dd;mm;yyyy) for which the market price FAME and the reference quotation are supposed to be valid (at this point in time without function and therefore without any effect on the results).

ENTRY: Reference PLATTS ULSD/ ICE Gasoil

Requires the entry of a corresponding value in the unit Euro/MT.

ENTRY: Market Price FAME

Requires the entry of a corresponding value in the unit Euro/MT.

ENTRY: GHG-Value in:

Via this switch the choice may be made whether to provide the values for GHG value FAME and GHG value Advanced FAME as the savings potential (in %) or as the emission value (in gCO2eq/MJ).

ENTRY:GHG-Value FAME

Requires the entry of a GHG value in % savings potential or emissions gCO2eq/MJ of FAME.

ENTRY: GHG-Value Advanced FAME

Requires the entry of a GHG value in % savings potential or emissions gCO2eq/MJ of Advanced FAME.

Output: Calculated price Advanced FAME (exw)

Provides the price that is in line with the market of the Advanced FAME in Euro/MT on the basis of the entered data.

Output: Calculated price Advanced FAME (exw incl. freight advantage)

Provides the price that is in line with the market of the Advanced FAME in Euro/MT including the calculated freight advantage on the basis of the entered data.

Output: Costs per saved gCO2

Provides the price that is in line with the market of 1 gCO2eq of the Advanced FAME in Euro on the basis of the entered data.

Output: Advantage per 1% GHG saving FAME

Provides the information what value in Euro each 1% of the GHG savings potential of the FAME has.

Output: Advantage per 1% GHG saving Advanced FAME

Provides the information what value in Euro each 1% of the GHG savings potential of the Advanced FAME has.

Output: Freight advantage Advanced FAME

Provides information on the calculation of the freight advantage of the Advanced FAME in Euro/MT.

Disclaimer

The arithmetic used in this price calculator for the calculation of a biodiesel price that is in line with the market is according to the requirements of the relevant literature and, as far as apparent, to the legal requirements at the time of release. It is herewith explicitly pointed out that no guarantee and/or liabilities for the calculational correctness of the shown results, that are a result of the data input, are furnished whatsoever. In particular, also no guarantee and/or liabilities are furnished that the produced results and the current market price match and that this price is actually realised. The results of this calculator solely are an aid to orientation without any legal binding force whatsoever. Any liabilities for occurring damages and claims as a consequence of using this calculator are excluded out of whatever reason.

Tutorial 240115-05