18/08/2012 (Shanghai Daily) - Local businessmen here and investors from Netherlands and the Middle East are building a large biodiesel factory at a cost of 165 million U.S. dollars to turn grease trap oil and used cooking oil into biodiesel by using the world's leading technology.

The plant ASB Biodiesel, covering an area of 18,000 square meters, is located in the Tseung Kwan O Industrial Estate in eastern Hong Kong. It is under construction at full speed and the site is now covered with machinery, huge steel tanks, a dedicated barge terminal and a waste water treatment facility.

Company files show that 75 percent of the plant is owned by Al Salam Bank of Bahrain, and the other 25 percent is owned by its founder.

Anthony Dixon, CEO of the company, said that the factory will be completed in February next year and will start operating in August. The plant's designed capacity is 100,000 tonnes of biodiesel.

The main raw materials will include palm fatty acids, used cooking oil, grease trap oil (commonly known as "gutter oil") and animal fats. Dixon said while the factory is still under construction, the most important task of the management team is to source the raw material.

He said that initially, about 40 percent of the raw materials will be palm oil fatty acids, which is a byproduct of a palm oil refining process, and ASB is now approaching the manufacturers in Malaysia and Indonesia.

About 25 percent of the raw materials will be used cooking oil, the non-reusable cooking oil after several deep fried usage. Starting November 2010, the ASB has collected used cooking oil from 1,800 restaurants in Hong Kong, making it the city's largest collector of used cooking oil.

About 20 percent of the raw materials will be grease trap oil, grease water mixture from grease trap of restaurant and food factory. ASB plans to collect grease trap oil from Hong Kong and Malaysia. The remaining 15 percent of raw materials will be animal fat.

Dixon said palm fatty acid is the most costly of these four raw materials, but requires a minimum of refining and relatively simple technology. Grease trap oil has the lowest cost, but higher technical requirements.

He said that the proportion of ASB's raw materials supply will continue to change. After three years of operation, the proportion of palm oil fatty acids will decrease from 40 percent to 10 percent, and the proportion of the three other raw materials is expected to increase from 60 percent to 90 percent.

According to ASB's Chief Technology Officer Roberto Vazquez, the refining technology used by the ASB is provided by the bio- energy company in Europe named BDI, which takes a leading position worldwide in production technology. The scale of 100,000 tonnes per annum production capacity can be comparable with similar large-scale factories in Europe.

Dixon said that due to economies of scale, biodiesel refining production costs and selling price is higher than the conventional fossil fuels.

In Europe, the cost of one ton diesel is about 1,000 U.S. dollars, while one ton of biodiesel from palm oil fatty acids refining costs about 1,200 U.S. dollars. And the cost of one tonne of biodiesel made from used cooking oil refining is about 1,300 U. S. dollars.

Even though the cost is relatively high, Dixon said that with his 15 years' experience in the renewable energy sector, he still believes that the biodiesel produced by waste materials has great potential.

"Waste materials are available and more cheaply. Secondly, waste materials have much lower carbon emission footprint, which make bio-fuels environmentally friendly, even compared with other types of biodiesels," he said.

Dixon said that the driving force behind the idea of using biodiesels is the reduction of carbon dioxide emissions and mitigation of global warming risks.

He said that biodiesel, which is produced from waste oil materials, can reduce greenhouse gas emissions by 80 percent. In addition, sulfur oxides and particulate matter emissions from such biodiesel are also lower than fossil fuels.

Dixon predicted by 2050, in order to reduce carbon dioxide emissions and reduce the risk of climate change, 20 percent of the world's transportation fuel will be supplied by renewable energy.

He said there are two ways to achieve this goal. Firstly is to increase the electric car usage and the second is to expand the supply of bio-fuels.

Currently there are two main kinds of bio-fuels. The first is bio-ethanol, and Brazil is in the forefront of using sugar cane to produce bio-ethanol. The second is biodiesel.

The first generation biodiesel uses vegetable oil as the main raw materials, such as palm oil, soybean oil, which led to competition between food and fuels, and brought a lot of criticism.

Technological improvement brought forward the second generation of biodiesel. The new technology can use grease trap oil, used cooking oil and other waste oil as raw materials. In the future, there are also possibilities to use non-edible plants as raw materials.