Oil-rich United Arab Emirates looks to biodiesel
- 23 August 2011
- From the section Business
It is 11am in Dubai and already 42 degrees Celsius outside. Inside the warehouse it is barely any cooler.
Although workplaces in the United Arab Emirates are normally fitted with air conditioning, here they have purposefully restricted it to the offices.
"It's the chemical reactions," Karl Feilder, chairman of Neutral Fuels explains.
"They happen at 65 degrees so by keeping the factory temperature higher we expend less energy on the process.
"That makes it more efficient. That's better for the environment and it cuts costs."
He is pointing at the thirty metre long collection of industrial tanks and pipes through which the firm's main product is being made.
The room smells a bit like a chip shop. There is a reason for that.
They are making biodiesel - converting vegetable oil from local McDonald's restaurants so that it can be used to fuel trucks.
The biodiesel they produce can be used by any normal diesel engine. That makes it distinct from less processed vegetable and waste oils, which can only be used by converted engines.
Because the palm oil they get from McDonald's is the waste from food preparation, when it is burned the carbon emissions are reduced by 60-80% versus traditional diesel fuel.
Any carbon dioxide released is recaptured by trees McDonald's says are grown sustainably on certified farms in the Far East, providing the next batch of palm oil for use by the fast-food chain.
Similar biodiesel programs from re-used cooking oil are already in operation by McDonald's in Germany, the UK and also in areas of Brazil and the United States.
In the UAE, though, the process works better.
"Biodiesel has an issue depending on what its made from that at low temperatures it will clog up, form a gel and eventually freeze," according to Robin Mills, a Dubai-based energy analyst.
"Of course, low temperatures aren't a problem in this part of the world so it has performance benefits."
Competing with the cap
But it is not all smooth sailing.
The United Arab Emirates, like most of its neighbours in the Gulf, subsidises and caps the price of fuel at the pump.
That should make it trickier for companies like Neutral Fuels to compete and make a profit.
"It is challenging but that means we have to be even more efficient and even more competitive," Mr Feilder says.
"The great thing is McDonald's oil is so predictable in terms of high quality and quantity that it makes our job of making biodiesel easier. That helps make us a profitable business."
Still, McDonald's has changed its entire fleet of 22 trucks in the country to use the biofuel.
They pick up the leftover vegetable oil from restaurants when they drop off fresh supplies of food during the day in bright-red converted wheelie bins.
Later, they stop off at the Neutral Fuels, leaving behind the full bins and taking on empty ones. They also top up their tanks from the biodiesel pump by the parking bay. McDonalds used to sell their palm oil to a third party in India who recycled it.
"Now we sell our oil to Neutral Fuels at the same price we used to sell it for before and we buy the biodiesel from them at the market price of diesel in the UAE, says Rafic Fakih managing director of McDonalds UAE.
"So we are no worse off and gain from the environmental benefits."
Given that the United Arab Emirates is the world's eighth largest oil producer, it is perhaps a surprise that the biodiesel project is gaining traction. Other restaurant chains are already expressing an interest in the program.
In this instance, it is perhaps an even bigger surprise that the programme is also backed by Emiratis.
"Nowadays companies are becoming more environmentally conscious and they want to, as much as they can, be environmentally sustainable," says Abdulla Al Jallaf, managing director of Neutral Fuels.
"I think it is a very interesting proposal to make use of waste materials."
Currently, McDonald's is Neutral Fuels only client and they have restricted the project to the UAE. But there are hopes to expand across to the wider region.
With the process profitable for Neutral Fuels and likely to save McDonald's money in the longer run if diesel prices continue to rise, it seems likely its spread will be inevitable.
Good news for the environment, company profits and anyone interested in running their vehicle on the power of French Fries.