Updated June. 27, 2007 03:12
The price of biodiesel, an alternative energy source to light oil, will become lower than light oil as early as 2011, securing its economic feasibility, according to a recent report by the Korea Energy Economics Institute (KEEI).
According to the report, released on June 26 and titled Prospects on the Economic Feasibility of Biodiesel and Improving the Support System, the production cost of biodiesel as of 2007 is 809 won per liter, which is higher than the untaxed cost of light oil (592.5∼556 won).
The government is making up for the difference by exempting biodiesel from transportation taxes.
It is estimated that the production cost of biodiesel will drop to 678 won per liter by 2011, providing greater economic feasibility than light oil (the production cost of which will be 717.2 won). This prospect is based on the preposition that the price of oil will continue to rise, and that the amount of biodiesel supplied will increase from the current 0.5% of light oil consumption to 5.5% gradually by 2017.
Biodiesel will become economically feasible between 2011 and 2015, says Bae Jeong-hwan, a researcher at KEEI. It is necessary to maintain its exemption from transportation taxes until 2010, and then begin lifting it gradually from 2011.
Another report published by the KEEI titled The Economic Feasibility of Adopting Bioethanol for Transportation revealed that bioethanol, an alternative energy source to gasoline, will not become economically feasible if the international oil price stays under 50 dollars.