A COMMITMENT TO SAVE THE PLANET LED TO A HOMEGROWN BIOFUEL PLANT
Neutral Fuels is a UAE facility that converts waste cooking oil into clean fuel, Jennifer Gnana talks to its founder
In a small factory in Dubai Investments Park, doors are always kept open to avoid trapping fumes, as a small team of engineers oversees the production of biofuel.
Arranged carefully in the factory are plastic modules filled with a thick viscous liquid, some filled to the brim with biofuel ready for distribution, others with cooking oil waiting to be catalysed.
It is nearly 45°C outside, but there is only a small fan to keep things cool.
“The enzymes should not be allowed to cool,” Karl Feilder, chief executive and founder of Neutral Fuels, explains why his factory floor is not climate controlled.
Mr Feilder is behind the UAE’s first homegrown initiative to turn waste cooking oil into biofuel, which is used by the entire fleet of vehicles run by McDonald’s in the country.
Entirely self-funded, Neutral Fuels came about when British serial entrepreneur Mr Feilder – who has sold five companies and taken two public – was consulted by the Dubai Economic Department in 2009 to study ways to lower the carbon footprint of the
emirate’s logistics sector. He was asked to look into possible alternative fuel.
A year later, Mr Feilder reported to the department that biofuel was “the easiest” and “most readily acceptable alternative”, particularly if manufactured from waste oil readily available in the UAE.
He also offered to produce the biofuel.
As an industrial engineer with an understanding of how biofuel is made in Europe, Mr Feilder fine-tuned the technology to work in the Middle East.
With McDonald’s as a partner, Mr Feilder also roped in the fast food chain’s supply partners such as Del Monte to run on biofuel as well. The team clocked up five million kilometres within five years of being in business.
“The McDonald’s fleet is a 100 per cent biofuel so there’s no fossil fuel at all and many people will tell you today that it’s not possible, and one of the reasons we did it is to show people it’s not impossible at all,” he says.
Nearly a decade after he started, the fleet has completed 13
million km today on Neutral Fuels’ biofuel, growing company revenues 1,000 per cent over the past five years.
By the end of the year, Neutral Fuels would have branched out to India as well as Bahrain, and add two more locations in the UAE.
“The first one we’re opening in India. We’re building one in Delhi at the moment, the factory has been commissioned in July/August,” says Mr Feilder.
“Our main plant is in Dubai, and we’re building a second one in Ras Al Khaimah and a third one in one of the emirates, so we’ve got two programmes going and we’re not sure, which one is going to happen first,” he says.
The company has also successfully launched a bond on the Frankfurt Stock Exchange,
raising “a substantial sum of money”, says Mr Feilder, without disclosing the amount, as the instrument is subject to regulations.
He says there is healthy investor appetite globally to invest in the biofuels sector.
Mr Feilder plans to take the company public in 2024, with London as a potential market for an initial public offering.
“I’ve done that twice before so I know the process,” he says.
“We’ve had to change our auditors, restructure the way that the business is set up so we can do that but also expand quickly into other markets,” he adds.
Like other start-ups in the UAE, Neutral Fuels also tried crowdfunding five years after it started, but realised quickly it was not a suitable financial model.
Mr Feilder says, one was the fact that most start-ups in the emirates seeking crowdfunding were app-based and therefore relatively “low cost”, and two, they were generally not profitable.
“Nobody really understood what biofuels were in the Middle East, so it didn’t work and that was fine. We learnt something from it. It gave us an interesting case study to talk to students and share our knowledge with,” he says.
Having taken a decision nearly 13 years ago, “collectively as a family” to only engage in business that saves the planet, Mr Feilder through his commitment to the cause says smaller production is more sustainable and offers higher yield.
“A really big factory in Europe would be doing 10 million litres per month of production. At the moment we can do about half a million,” he says.
“Our average is between 93 and 94 per cent yield. So for a 1,000 litres of biodiesel we need 930 litres of cooking oil. In Europe they’re averaging around 70 per cent yield,” he adds.
The difference being largescale production of biofuel relies on aggregators, sourcing feedstock from multiple sources, which could be animal waste, ground-up chicken or even chicken feathers, as long as the material contains oil.
The off takers for such largescale production in Europe are the oil majors who then blend it in a refinery and distribute it themselves.
Neutral Fuels, on the other hand, relies on direct sourcing from restaurants and hotels, with distribution made back to the sources.
“So there are no intermediaries on either side of our supply chain, so this means we can be more sustainable long-term, we can make a profit and we can continue to replicate this model,” says Mr Feilder.
Having taken up the challenge a decade ago, Mr Feilder is confident that production of biofuel does not have to take up acres of arable land or expensive feedstock. It can be done simply with material sourced in kitchens.
“Our own strategy says that we can build 50 of these facilities, around the region. Any city that has more than a million people will have sufficient supply of waste and sufficient off take of the biofuel,” he says.