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The Economics of Biodiesel Derived From Waste Cooking Oil in the Philippines

Abstract This article examines the economic aspects for the production and utilization of a sustainable form of biodiesel derived from waste cooking oil (WCO) in Marikina City, Philippines. An estimated 35,000 liters of WCO per month can be recovered from the household and commercial sectors of the city. The WCO from the household sector can be recovered using a combination of disincentives via appropriate legislation, and moral and remunerative incentives that target the lower socio-economic classes. Remunerative incentives for the household sector need not be tantamount to the market value of WCO. In contrast, the commercial sector will require remunerative incentives against the competitive market value of WCO. Assuming the household sector as the only source of WCO, the cost-benefit analysis shows positive economic returns. However, external capitalization should be secured if the expected WCO recovery level is 80% or lower, unless the disbursement of remunerative incentives is deferred for at least one year.