As oil prices continue their seemingly-inexorable rise, small-scale – often farm or backyard – production of biodiesel is becoming increasingly common, but the product being produced often falls short of international standards and causes problems in modern diesel engines. This is giving biodiesel, countries where the standards of its production are unregulated, a bad name.
Thus some diesel machinery suppliers (for instance John Deere tractors) now specify in their guarantees that biodiesel has to be based on EU standards and/or may only be used as a blend.
A Netherlands-based organisation which focuses on producing mobile plants, has produced a quality containerised system for local production in Africa which produces biodiesel to EU specifications. The product from these plants can be used without any adjustment to modern diesel engines.
Carlo Bakker, founder of the company, says it is absolutely essential for any producer of biodiesel to produce according to some recognized international standards. EU standards are derived from German standards because Germany is the "father of the biodiesel industry". The first diesel produced in the late 1800s by Fritz Diesel, a German, was biodiesel. Today, EU-specified biodiesel is successfully in use in most German diesel engines.
Bakker’s partner in the biodiesel container units is a German, Peter Schrum, who has 30 years of experience in the German biodiesel industry, and is president of the BBK, the German biodiesel association.
Bakker says that in Africa, projects for about 10 big biodiesel production plants have been announced, but only one or two have eventuated.
In fact, he says, "smaller, local production units may be more practical … that way you can decentralise the fuel and energy production, for example to townships and rural areas."
Bakker is offering two local models for biodiesel production. In both models, his company prefers to retain a half share in the business to ensure both sustainability and ongoing EU-standard production:
· Agriculture-based units. In this model, local farmers bring their raw-pressed vegetable oil of almost any type (for instance sunflower, soy, jatropha or even used cooking oil) to the unit, and get back almost the same amount of oil, but refined to EU-standard biodiesel.
The farmer does not pay for the biodiesel but only for the refining process. In a unit set up in Bothaville, South Africa, this toll-refining of the vegetable oil into EU-standard biodiesel cost about half the price of diesel at the pump (55USc per litre). After the local farmers saw the profit that the unit could make, some of them took up the option to become partners in it, Bakker says. He says this model has three advantages for the farmer, none of which involve a middleman: firstly, the farmer gains quality high-protein cattle feed after pressing his oilseed (for instance 60% in the case of sunflower); secondly, he/she gains discount, quality biodiesel; and thirdly, he/she can be a partner in the production unit, and benefit from its profit.
l Urban waste cooking oil-based projects. In Bakker’s second unit, currently being set up in Soweto, South Africa, the biodiesel production is derived from used cooking oil, normally collected by members of the community from restaurants and fast food shops. Says Bakker: “There is a lot of used cooking oil out there – enough cooking oil in Gauteng (South Africa’s leading economic province) for at least 16 such mobile container plants." His model for South Africa allows for about 200USc/litre to be paid to the restaurateur or other supplier of used oil and another 200USc/litre to paid to the collector. In this model, Bakker’s company also has a 50% holding, business people from the community have the other half, and the community gets an ongoing contribution from profit.
The containerised units for both models are identical. They are designed to produce 1m litres per year, because the South African tax authorities allows for tax exemption for any unit producing less than 1m litres. The level of exemptions will differ in other countries, however.
If more oil than this is available in the area for collection, then further separate units can be set up, says Bakker.
There is also the possibility of local power generation in rural areas with these units, using biodiesel.
The biodiesel produced by these units is sold at 10% less than the pump diesel price. For instance if the pump diesel pric4e is 100USc/litre, this biodiesel is sold at 90USc.
Bakker is confident that the units will become increasingly profitable as the world price of oil rises. When he began the project in South Africa more than two years ago, the price of diesel was almost half of what it is today. The fundamental reason why oil prices will rise, he says, is that China and India are industrialising rapidly, with rapidly-rising living standards. They are already demanding increasing amounts of food and fuel, and this will continue.
Bakker uses the best German container units, which cost about $500,000. As companies set up are normally joint venture partners, the initial outlay by the local entrepeneur does not have to be this amount.
Of course, there are cheaper biodiesel production units on offer. Says Bakker: “You can buy biodiesel units for about $160,000, but my investors expect to use quality German technology. All the higher price of the German unit means is that the unit is paid off over a little longer – but the plant will last for about 30 years.”
The German units differ from cheaper units in being completely automated and integrated (rather than having manual-operated plants which Bakker says can never deliver consistent-quality diesel).
The Siemens computer which operates his units is designed for the high temperatures which may be encountered in Africa. Furthermore, if any production or quality problem occurs, it can be viewed online from Europe by the company’s systems engineers there.
Bakker’s goal is to set up 75 plants in South Africa. He recently sold a joint-venture unit in Tanzania, and is negotiating in Mozambique, Malawi, and Zambia.
While carbon credits are generally only gained on larger projects, Bakker says these can be got for such small projects – “since we work as a co-operative, in the joint-venture companies, we collect them together”.
He is working with Eco Securities, a market leader in carbon credits, listed in London.
On 75m litres biodiesel, carbon credits would yield E1m/year (about $1.5m/year) .
His financial business partners are FMO (a Dutch bank), EU-based Aeolus Group (which produces wind power, feedstocks and biomass production units), as well as Eco Securities.
World Mobile Plants: South Africa: Tel +27-82-814-8996; Netherlands: Tel +316-2-243-0076; firstname.lastname@example.org ; website: www.WorldMobilePlants.com
For other small and medium scale biodiesel production technology, search in the FoodProcessingAfrica/DevTech section of www.foodprocessingafrica.com (subscription required).