Has London struck oil?

CHANGES TO EU laws and a new biodiesel site in the capital could push up the price for used cooking oil.

 

London boasts the highest concentration of food businesses in the country. This includes an army of 8,000 fast food outlets. There are also mobile caterers, airport dining lounges, contract caterers, food manufacturers, schools and a host of other sites that all rely on one ingredient: cooking oil. And this means there’s a plentiful supply of used cooking oil (UCO).

 

London generates between 32m and 44m tonnes of used oil every year, according to new research. By law, it can’t be poured down the drain, so it’s collected and some of it is turned into biodiesel. There’s a decent economic incentive for this: the 20p-a-litre tax break for biodiesel used in road transport might have gone, but in its place has come double RTFCs (Renewable Transport Fuel Certificates) for UCO-derived biodiesel. The rise in thefts of UCO demonstrates that it’s a valuable resource.

 

Another incentive is the move to limit the amount of food crops used to produce biofuels. In October, the Committee on Food Security – one of the most inclusive intergovernmental forums – urged governments to review their biofuel policies given that “in some cases, current biofuel production creates competition between biofuel crops and food crops”. Europe is already doing just that: the European Parliament recently backed plans to cap the use of food crops for biofuels at 6% (rather than 10%).

 

This could open the door for more fuel from UCO. “By capturing used cooking oil right here in London and turning it into biodiesel we could provide 20% of the fuel needed to power London’s entire bus fleet, while saving more than 50,000 tonnes of carbon dioxide and creating hundreds of new jobs,” says the city’s mayor, Boris Johnson, who is keen to investigate the potential of London’s extensive feedstock of UCO.

 

The specialist environmental consultancy LRS has just presented the findings of its study to the Greater London Authority, which assessed whether UCO could be manufactured and blended in London in a “circular economy application” that would provide such significant environmental and economic benefits.

 

“The general appeal of promoting biodiesel production from UCO is undeniable,” the report says. “The reuse of UCOs supports the development of a circular economy, by finding an innovative secondary use for a waste material that is under strict disposal controls and can be extremely problematic when disposed of illegally through the sewerage system.”

 

Collection – as is often the case with waste – is highlighted as one of the challenges. Most of London’s UCO is sent to the big processing plants in Scotland and northern England.

 

What’s more, not all the UCO is suitable for conversion to road transport fuel given the fat content - a high fat content will make the fuel prone to solidifying at low temperatures. Pure Fuels, for example, will only collect soyabean, sunflower, canola, rape, corn and groundnut UCO. Another company, Uptown Oil, which produces 2.2m litres of biodiesel a year, says that approximately 10-20% of the UCO it collects cannot be processed into biodiesel.

 

Lower-quality (higher fat content) UCO also has lower commercial value: LRS found the price can vary from 45-60p a litre at the top end to just 25p a litre at the bottom. Still, this is a “waste” that a few years ago many food outlets would just pour down the drain.

 

So could a London-based biodiesel facility and changes to the laws on the use of food crops in biofuels push up prices for UCO?

 

“The margins on biodiesel production are fairly thin,” says the LRS principal consultant Hugh Smith, “and a lot of the profit margin is in the collection side. People might like to think the price [for UCO] would go up, but I’m not sure that’ll be the case. The economics are fairly well balanced.”

 

Only one company interviewed by LRS felt it would “definitely be viable” to manufacture biodiesel from UCO in London. All the others would consider a blending plant given the extent of the potential contract on offer with Transport for London and the capital’s bus fleet.

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