x Abu Dhabi, UAESunday 21 January 2018

Planting the seeds of clean energy

Emirates Biodiesel is set to start producing fuel next year from waste oils and locally grown jatropha.

After a rush of interest in biofuels, the industry is at a pause. But as this recent visit by Senator Barack Obama to a biodiesel plant shows, the push for alternative energy sources will continue to be a hot topic.
After a rush of interest in biofuels, the industry is at a pause. But as this recent visit by Senator Barack Obama to a biodiesel plant shows, the push for alternative energy sources will continue to be a hot topic.

The prospects for producing energy profitably from plants grown in a desert atop some of the world's largest deposits of oil may seem quite dim, even for the most optimistic businessman. But a company called Emirates Biodiesel (EmBio) is set to start producing biodiesel next year at a plant near Al Ain from waste oils and locally grown jatropha, a hardy plant whose golf ball-sized seeds are heralded by some as the next great development in biofuels.

Karim Aly, a co-founder of the company, said he had crunched the numbers, considered the risks and sees the plant as a sound financial venture. "We have been extremely cautious in our forecast and assumptions," Mr Aly said. EmBio is getting its start in a highly profitable but tumultuous year for the biofuels industry. A big increase in biofuels production in 2007 and the early part of this year - driven by high crude oil prices and government mandates and subsidies - was widely criticised for driving up the price of basic food commodities like corn and rice, on which much of the developing world survives.

The so-called "food versus fuel" debate led to sharp criticism of the industry from prominent international organisations, including the International Monetary Fund and the International Energy Agency. The industry is now at a pause, studying what went wrong this year in order to develop "a notion of sustainability", according to Andre Gheysen, an area manager for Desmet Ballestra, one of the largest makers of biodiesel plants in the world.

But EmBio is looking to silence the critics at a stroke by pledging only to use inedible oils at its plant, which will be flexible enough to handle everything from plant oils to used frying oil and other industrial wastes that Mr Aly declined to specify. EmBio would start production next year at a very modest level of roughly three million gallons a year. The company is looking to acquire land to produce its own jatropha, an idea driven in part by the fact that plants in the same family as jatropha have been grown profitably for landscaping purposes in the UAE for years.

The founders of the company are backed by a financial heavyweight: the Al Yad venture capital fund, an offshoot of Daman Investments. Mr Aly declined to say how much it would cost to get EmBio up and running. The production of biodiesel, which can be burnt in a standard diesel engine and is usually mixed with petroleum-based fuel, is a surprisingly simple process. The feedstock, whether animal fats or palm oil, is cleansed of impurities and combined with methanol, a toxic alcohol, and a catalyst.

The methanol causes the glycerine to separate from the fatty acids, which are then treated and ready for sale as biodiesel. The glycerine, popularly associated with soap manufacturing, can be sold to other industries or discarded. The greatest challenge for producers of biodiesel is finding a low-cost, reliable source of feedstock, Mr Gheysen said. Some estimates indicate feedstock costs can make up 80 per cent of a producer's total costs.

Up until now, most biodiesel has been produced from vegetable, palm or rapeseed oil. Used cooking oil from restaurants has also fed smaller producers. The main focus is now on jatropha, a hardy weed that grows easily without much care or water. The plant produces scores of large seeds that release oil when crushed. Governments in East Asia and Africa have latched onto the idea that jatropha will be a huge new energy source and become an export as valuable as crude oil.

The Philippine government mandated that 1.2 million hectares of land be set aside for jatropha cultivation. Myanmar, Malaysia and Kenya have all aggressively pursued policies to boost production. Jatropha would be especially profitable in Africa, Mr Gheysen said, where ample farmland is available, and foodstuffs production would not be displaced. Even with the new production gains, the crop is still facing a demand crunch from an industry looking to it as a source for world-scale biodiesel production, Mr Gheysen said.

"The jatropha is everywhere a problem of production," he said. "The availability of soil is not there." Mr Gheysen is not convinced that jatropha will work for EmBio. "The cost efficiency, for us, is probably not there," he said. Although the crop is uniquely hardy, several studies have shown that its yield is poor without regular watering, and Mr Gheysen said farmers in the UAE could probably get more from the limited water supplies with "high value-added foodstuffs" such as fruit and vegetables.

Mr Gheysen said that for GCC states, it would make more sense to focus on producing biodiesel from waste cooking oils and industrial waste oils, especially waste from slaughterhouses. He said he was looking in particular at the vast stream of waste coming out of Saudi Arabia's slaughterhouses that goes unused. Conoco Phillips and Tyson Foods, a major US livestock producer, are involved in a joint venture to produce biodiesel from Tyson's waste animal fat.

The two companies have estimated Tyson's 2.3 billion pounds of fat could produce up to 300 million gallons of fuel per year. Eckart Woertz, an economist at the Gulf Research Centre, said in a recent report that the region's best hope for biofuels production lay in developing algae as an effective feedstock. Several small plants are currently experimenting with algae, but none have managed to produce it profitably on a commercial scale.

Use of waste and inedible products could be a boon for an industry tarnished by accusations that it is contributing to hunger in the world's poorest countries. After a rush of interest into a biofuels - a period when Mr Gheysen said his firm was selling about one biofuel plant per week - the industry has been stalled as it seeks an answer to the challenge of the food versus fuel debate. "What happened is the governments in Europe and the US have probably not realised that the market conditions were not there," he said. "I think it's a question of what is the objective: to have an environmentally friendly product that is sustainable."

Biofuels "is one answer" among many to challenge of moving beyond fossil fuels, he said. The IEA has estimated that about 1.35 million barrels of biofuels are produced every day, and this will grow modestly to 1.95 million barrels per day by 2013. That is a large number by itself, but amounts to very little when compared to a daily demand for oil products that is averaging 86.9 million barrels this year.

But Mr Aly struck an optimistic tone when faced with the challenge of profitably producing biodiesel in one of the world's oil capitals. "The numbers we crunched were not just financial," he said, stressing the intangibles that come with developing a cleaner, renewable source of energy. "We see this as a sea change in how we operate as a society." cstanton@thenational.ae