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TRENDS AND ANALYSIS

Turning a waste stream into ‘green gold’

An Omani tech startup has teamed up with UK-based Green Fuels Ltd, a global pioneer in the field of waste-derived biofuels, to set up the first commercial-scale biodiesel refinery in the Sultanate – an initiative that has the potential to ignite the growth of a wider ecosystem around biofuels in Oman.

The announcement last July was a relatively humdrum affair with minimal fanfare, and understandably so, because of strict social distancing regulations in place.  

In a media release, Khazaen Economic City – the country’s first integrated investment hub – revealed that it had signed a lease agreement with Wakud International LLC, an Omani tech startup, for the establishment of a relatively modest-sized biodiesel plant utilizing locally collected ‘used cooking oils’ (UCO) as feedstock.

But reactions to the announcement were anything but low-key.  For one, it sparked animated debate in academic and business circles on the wider ramifications of a first-ever biofuels plant for the growth of a circular economy centring on sustainably produced green fuels.  Secondly, there was recognition that a national ecosystem around biofuels has the potential to unleash immense spinoffs in the form of employment creation, small business growth, entrepreneurship, R&D, and so on.

For Talal Hasan, Chairman, Wakud International LLC, the groundswell of interest in his company’s landmark initiative was a vindication of his long-held belief in the promise of a homegrown biofuels industry in the Sultanate. Furthermore, it underscored the depth of commercial and public interest in the domestic production and potential uptake of environment-friendly ‘green fuels’.

“Since we made the announcement, we have been inundated with calls from people offering to buy our biofuel once it becomes available on the market,” said Mr. Hasan. “Clearly, there are people out there willing to pay a premium for our product because it is better for people, the environment, and is also the responsible thing to do.”

Wakud, says the Omani entrepreneur, is primarily an initiative to localize biodiesel production utilizing used cooking oil (also known as UCO) that is currently being exported overseas for want of a domestic end-user.  Although details of UCO volumes collected locally and shipped abroad are still sketchy, the figure is understood to be enough to build a small biodiesel refinery in Oman, given especially the number of UCO generators in operation across the country, encompassing hotels, restaurants, industrial kitchens, cafeterias, and so on.

In an interview with Energy Oman, Mr. Hasan said the Wakud project is also driven by environmental and sustainability objectives. Recalling the genesis of the initiative, he explained: “Upon my return to Oman after my studies and a career stint abroad, I noticed that UCO was still being illegally disposed of in the environment or being recycled and put back into the food chain, which can be carcinogenic. I wanted to do something about this. So, together with likeminded entrepreneurs, we started collecting UCO and began shipping it to Europe for conversion into biodiesel.  The collected quantities were relatively small – which meant we could ship only once in about two months to garner the required volumes for shipment.  From the commercial standpoint, it wasn’t profitable, but it gave us the satisfaction that we were doing something good for the environment.”

Having successful organized several shipments to Europe, Talal & Team then shifted their focus to the creation of a professional and well-incentivised collection system.  With proceeds from the overseas shipments, they began offering UCO generators – chiefly restaurants – money for their used oil.

Changing mindsets

But the effort required a mindset change on the part of the generators, Mr. Hasan recalls. “Here were generators who were used to paying certain people a fee for collecting and disposing of their UCO because they considered it to be a waste stream.  The collectors themselves would then find ways to dispose it off unethically – mainly down some municipal drain or landfill – or worse, per officially published reports -- recycle it back into the food chain.”

But the novel approach paid off, according the entrepreneur.  “The generators felt empowered for the first time. No longer were they dealing with a waste stream, but a potential resource that could earn themselves revenues – albeit modest – if they dealt with collectors like us.”

Soon, the trappings of a professionally managed UCO collection system were gradually falling into place – starting with the capital region, but eventually burgeoning out nationwide to cover Suhar, Salalah, Buraimi and Duqm.  Trucks suitably fitted out to handle drums of waste oil were deployed on collection runs as Talal & Team borrowed from internationally accepted best practices to professionalise an otherwise “messy” collection business.

Last July, Wakud International arrived at a new milestone in their momentous journey to transform a waste stream into a resource. Along with a number of investors they announced the formalization of a landmark deal to localise the conversion of UCO to commercially valuable biodiesel. Other key players in the initiative were named as Maher Al Habsi, CEO – Wakud International, and James Hygate, CEO – Green Fuels Ltd.

Khazaen Economic City – a centrally located hub for light industry and logistics boasting excellent connectivity with the rest of Oman – was selected as the venue for the nation’s first-ever biofuels production plant. 


Heavyweight partner

Adding to the promise of success is Wakud International’s partnership with Green Fuels Ltd, an award-winning UK-based tech firm specializing in the conversion of waste and other feedstocks into sustainable biofuels for use in road transport, energy, marine and aviation. A pioneer in renewable fuels, Green Fuels has supplied low-carbon biofuel production technology and equipment to customers in over 80 countries around the world to date, with an aggregate capacity totaling in excess of 420 million liters a year.

As an investor, Green Fuels’ role in the Oman project has the potential to catalyse the growth of a biofuels economy in the Sultanate, says Talal. “With Green Fuels, we are looking to build a biofuel hub in Oman as part of a wider ecosystem around this industry. Starting with UCO as feedstock, we want to attract new streams to supplement this primary feedstock.  Indeed, since we announced our plans to set up a plant in Khazaen we have been contacted by entrepreneurs dealing in fish oils, animal fats, fruits oils, and so on – all of which are potential feedstocks for our project. Local producers of such feedstocks who currently have no option but to ship them overseas to end-users, can now look to our project to offtake their output.”

The next significant milestone in the delivery of the project is in November when Wakud hopes to break ground at the plant site in Khazaen.  For now, Talal & Team are focused on getting the requisite clearances and project approvals for the project – a task made immeasurably easier by the backing provided by a key government agency. That agency is the Implementation Support & Follow-up Unit (ISFU), a task force operating under the auspices of the Diwan of Royal Court with the mandate to fast-track projects and initiatives billed as key to accelerating Oman’s economic diversification.

Also throwing its formidable weight behind the Wakud initiative is EJAAD, a platform established by The Research Council, Ministry of Energy and Minerals, and Petroleum Development Oman (PDO).  A high-powered grouping, EJAAD enables engagement between industry, academia and government in energy-related research and innovation activities. 

Promising market appetite

While details about the plant capacity of the Wakud project are still under wraps for now, Talal is optimistic that domestically produced biofuel from UCO will become available on the market by around the second quarter of 2021.   

Wakud is confident that all of the biofuel output will be marketed locally, leaving little, if any, for overseas export.  Already, a number of prominent Omani organisations have reached out to the promoters with offers to offtake part of the biofuel output for their internal consumption in line with their sustainability commitments.   

Longer term, Talal & Team also foresee the proliferation of biofuel dispensers coming up in forecourts of filling stations at key locations around the country – a scenario that may necessitate changes in local regulation mandating the blending of petrodiesel with biodiesel or other biofuels.  Regardless, given the initial outpouring of interest sparked by the project, there appears to be enough of an appetite for biofuels when it eventually becomes available on the market.  

But beyond its long-held dream of producing biodiesel in-country utilizing waste streams like UCO, the Wakud project will also spawn the growth of a circular economy centring on biofuels in general. This maiden commercial venture is expected to have a galvanic effect on, among other areas, research in feedstocks, SME development and entrepreneurship opportunities across the supply chain, technology transfer, skills development, and job creation among local Omanis. 

Indeed, ‘green gold’, as biofuel is often referred to, is more than just an environmentally benign alternative to petro-diesel amid a global transition to low-carbon fuels.  For Oman, it has the potential to hasten the advent of a ‘green economy’, and along with it, the benefits of a diversified economic base. 

Box:

be’ah unveils DBOO-based scheme

Wakud’s biodiesel venture based on UCO as feedstock is not the only game in town, it appears. On the heels of Wakud’s announcement came a Request for Prequalifications (RfQ) from Oman Environmental Services Holding Company SAOC (be’ah), the Sultanate’s solid waste management flagship, inviting interested investors to bid for its own version of a UCO-based biodiesel initiative. 

The prequalification document, said be’ah, seeks to assess international and local interest from developers with relevant experience to “manage the collection and/or the treatment of generated (used cooking oil) from local generators to be utilised as feedstock into biodiesel production, on a design, build, own and operate (DBOO) basis”.  The state-owned utility also announced the allocation of a 25,000 square metre plot of land within the Barka landfill for the establishment of a biodiesel facility. 

The proposed initiative, said be’ah, is driven by a mix of consumer and environmental health objectives. It aims to (i) eliminate illegal dumping of used cooking oil down the drain, which leads to blockages that cost the government of Oman major expenses to resolve these blockages; and (ii) eradicate environmental and health concerns resulting from the reselling or reusing of UCO in refrying causing severe health impacts.

Significantly, by promoting recycling and conversion into biodiesel, the project will help reinforce a recently introduced ban on exports of recyclable waste and thereby encourage the commercialization of recycling opportunities in-country, said be’ah. Furthermore, it would promote the “replacement of petroleum diesel consumption by integrating appropriate biodiesel blends that minimise the negative effects on standard diesel engines and NOx emissions”, it noted.

Interested investors were invited to submit an outline of their proposal for the “design, build, procurement, construction, insurance, financing, testing, commissioning, operating and maintaining a biodiesel production facility” using used cooking oil as feedstock.  Respondents were also encouraged to provide details of the choice of advanced and efficient technologies to minimise energy and chemical losses, while producing biodiesel at “international quality standards”. The deadline for the submission of proposals was August 31, 2020.

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