Demand for the cheaper and more environmentally friendly biodiesel is picking up both overseas and in Singapore, as companies strive to go green.
A second company is set to start operations here with another plant, which converts waste oils to biodiesel, to be built by September.
Only one company supplies domestic market demand for biofuel now. Alpha Biofuels, a start-up formed six years ago, expects demand to reach two million litres this year, up 30 per cent from last year. Its plant in West Coast can produce 2.4 million litres of biofuel in a year.
Alpha now has 15 companies such as Smart Taxis, SingTel and Starbucks using biodiesel, compared to 10 in December last year. The company also said more vehicles are pumping biodiesel at its eight refuelling stations across the island.
The new biodiesel plant, built by local company Fuelogical, will produce about 17 million litres a year and will sell to the domestic and international markets.
Its managing director Sive Sivandran said the company is confident it has enough feedstock to supply the biodiesel to its clients.
Alpha already has about 200 business partners regularly contributing waste cooking oils for conversion to usable fuel, but it is not enough. Its chief executive Allan Lim said it aims to have 200 more partners as Singapore uses about two million litres of cooking oil per month.
Biofuels are better for the environment in many ways: Made from vegetable oils, they are a renewable resource. Waste cooking oil can also be recycled as bio-diesel. The resulting fuel burns more cleanly than fossil fuels, and has much less harmful emissions such as carbon monoxide, particulate matter, and both sulphur oxides and sulphates, which are major components of acid rain.
Currently, it is also cheaper than commercial diesel, going at $1.07 per litre compared with diesel at about $1.30 and petrol at about $1.80.
A pioneer in this area, Biofuel Research, a subsidiary of Singapore company Oakwell Engineering, said worldwide demand for biodiesel has also increased by at least 50 per cent, especially from the European markets.
The company supplies to countries like Denmark and India, using waste cooking oil and waste by-products from Malaysian palm refineries to make its biodiesel.
With Singapore exploring alternative forms of clean energy such as solar power and electric batteries, industry players say the market for renewable fuel is promising, as any diesel vehicle or power generator can use biodiesel.
Alpha’s Mr Lim said biodiesel is an easy way for firms looking to enhance their green image. ‘It all starts with recycling. The more (waste cooking oil) we can recycle, the lower the cost of the biodiesel, the more Singapore will benefit.’
Persuading companies to switch to biofuels is an uphill task.
For one thing, buying diesel in bulk is still about 20 per cent cheaper than buying biodiesel.
Convincing companies to donate their waste cooking oil is also difficult as they can sell waste oil to third-party oil collectors to be exported to other countries and re-used as lower grade cooking oil.
Industry players say what would help is a policy that encourages the use of renewable energy, such as tax exemptions for companies using renewable fuel.
Mr Kom Mam Sun, director of Biofuel Research, argued that companies producing renewable energy and environmental technology should get a foot in the door because of their additional eco benefits.
Neste Oil, a Finnish oil refining company, also plans to complete its €550 million (S$930 million) plant in Tuas by the end of the year.
However, unlike the other two companies, Neste plans to use fresh palm oil as its main feedstock, which will drive the prices of its biodiesel up.
Its global president and chief executive Matti Lievonen declined to reveal its biodiesel price, but said it will be priced at a premium compared to traditional bio-diesel, because of its quality.
‘The Singapore plant will require approximately one million tonnes per year of feedstock. Collecting used cooking oil would be difficult due to the volume requirements,’ he said.
From its plant in Singapore, Neste will churn out about one billion litres of bio-diesel per year, bound mostly for European markets, and in the future, American markets.
Associate Professor Lu Wen Feng from the National University of Singapore’s mechanical engineering department said switching fuel sources is a good first step for companies which want to go green, but there are still issues like costs and availability to consider.
‘I do not think there is enough waste cooking oil around to feed our vehicles,’ he said. ‘Since a majority of biodiesels are produced from biological ingredients, mass production of biodiesel may bring out the issue of food shortage.’
DIY alternative coming soon
ALPHA Biofuels will soon allow customers to produce their own biodiesel, using a machine the size of a long dining table.
The micro-refinery is being used on the construction site of Asia Square, an upcoming hotel-cum-office complex in Marina Bay, producing 1,000 litres of biodiesel a week for the building’s temporary power generator.
When the first tower of the building is ready next year, the machine will be used to convert waste cooking oil from the restaurants located in the building to produce biodiesel which will be used by the hotel’s shuttle buses and local charitable organisations.
Alpha has also set up micro- refineries in other countries, including Cambodia, where waste cooking oil collected from hotels in Siem Reap is converted to 2,000 litres of biodiesel a week.
The fuel is then used by generators at the Angkor Hospital for Children, to provide electricity during peak hours and ensure that operations are not affected by intermittent electricity.
Likewise in Kuala Lumpur, Alpha is making a micro-refinery for a client who wishes to convert waste cooking oil collected from the city’s various fast food restaurants into usable fuel.
Alpha chief executive Allan Lim says the Malaysian effort is a pilot project, and the company hopes to expand into other major cities in Malaysia.
Apart from building micro-refineries, Alpha continues to seek more companies to donate their waste cooking oil, and more customers to use biodiesel.
Alpha’s current partners include Smart Taxis, which uses 1,000 litres of biodiesel a week in some of its cabs, and SingTel, which has just finished a trial using the biofuel in seven of its vehicles.
A SingTel spokesman said the company is currently evaluating results of the trial, taking into consideration the cost, location of refuelling points and mode of payment, before deciding whether to implement it across its fleet of vans.
Ikea Singapore, part of the Swedish furniture giant, has also recently begun to contribute waste cooking oil and is in talks with its providers of delivery trucks and shuttle buses about switching to biodiesel.
Mr Lionel Lim, director of Bedok Transport, which has been using biodiesel in 15 of its 70 buses since last year, said bulk diesel is still more cost effective than biodiesel.
But the company chooses to use biodiesel in some of its fleet to cut down on carbon emissions.
‘If I can, I’ll try to keep using biodiesel, but it all boils down to cost constraints,’ said the 30-year-old. ‘Biodiesel is still affordable now, but if the price goes up, then maybe not.’
LESTER KOK
