The Big Interview: Lootah Biofuel's Yousif Lootah
Lootah Biofuels MD debates his firm's plan to generate fuel from algae
Lootah Biofuels recently signed an MoU with AlgaOil, to research production of biodiesel from algae in Dubai. PMV Middle East editor Stian Overdahl speaks with Yousif Saeed Lootah, CEO of Lootah Biofuels, about the possibilities and practicalities of biofuel production in the GCC
The idea of extracting oil needed for producing biodiesel from algae that has been grown in large man-made ponds is one that can’t help but excite interest from those concerned with sustainability as well as fuel security.
Likewise, the certainty of demand for oil and petroleum means that there has also been interest from the business community.
Dubai-based Lootah Biofuels, part of the much larger SS Lootah Group, is a pioneer of biofuels in the GCC, and recently signed a MoU with the Singapore-based AlgaOil, which will see the two team up to conduct research into algae, hoping to eventually begin production of algae on a mass scale for oil extraction, if they have success in the lab.
The international team of the former company, SS Lootah International, has signed up with Germany’s Ardnt, to offer automated biodiesel plants in the region. It all points to a greener future.
While the recent global development of biofuels has been rapid, by comparison with fossil fuels they remain only a drop in the ocean. One recent study estimated that by 2022, biofuels will make up 8% of the world’s oil volumes. And while this would be only a small fraction of what is used, it would still make biofuels a multi-billion dollar industry.
CEO of Lootah Biofuels, and a director of S.S. Lootah Group, Yousif Saeed Lootah, is committed to the cause of cleaner fuels, but he is under no illusions about where they are in the process.
“The potential is very big – but it will take 20-30 years, as fossil fuel oil declines and renewable energy sources improve. And the mindset of the people will change – this is something that will happen.”
Starting in 2010, Lootah Biofuels began to collect used cooking oil from restaurants and industrial food manufacturers. In developing a new market, there were both advantages and pitfalls, explains Lootah. At the time, some restaurants would give it away freely, treating it as waste.
“We have educated the food chain,” he says. “Now that there is awareness of the value of used cooking oil, the food chain companies – even the smaller restaurants – are selling it. The price of the used cooking oil is higher than when we started.”
One practice that they have had to combat has been the transportation of used oil to other markets. “Some would take this used cooking oil to other countries for reuse. This is not ethical.”
From biodiesel standpoint, one difficulty with using used cooking oil as the feedstock is that it is not an homogenous oil, but a mix of different oils, such as canola oil, soyabean oil, palm oil.
“With our engineering talent, and our German partner and supplier [Ardnt], we designed our plant to produce pure biodiesel, even though the feedstock is a mix of oils.”
The Dubai plant is currently capable of producing 10,000 litres of biodiesel per day, amounting to approximately 240,000 litres of biodiesel per month. Based on an estimation of the total production of used cooking each month in Dubai – 1000 tonnes – Lootah Biofuels is able to convert around 25% of the total market in the emirate into biodiesel.
Well-established, the company supplies biodiesel to a range of different companies and entities, including Dubai’s RTA, the School Transport Service (STS), to Lootah Group’s construction arm, and to various other companies, for use in transport as well as equipment including generators. For commercial vehicles, they supply biodiesel blends of B5-B20.
“We spent months testing the fuel on our own vehicles before selling it to customers,” says Lootah. “Mainly it is used as B5, but we blend higher including B20.
“B20 is a red line for vehicles, and will not supply above this, since higher than B20 requires a small modification of the engines. We do not do this since it requires extra investment from customers in their fleet.
“For generators, B50 is okay. For some of our customers, we are supplying up to B30-B60 for use in their generators.”
In some European markets, B5 blends are supplied at petrol stations, where in some countries this is mandatory. Within two years, biodiesel blends will be available at the pump in Dubai, suggests Lootah.
Building a biodiesel production plant has not only been about the output of fuel. Within the Lootah Group, there is a significant amount of engineering talent, who have worked with Arndt to develop the Lootah production plant, and the skills of the German company have been transferred to local engineers.
The agreement between SS Lootah International and Ardnt, offers locally produced, automated biodiesel plants for cooking oil conversion through-out the region. For customers interested in a plant, the technology is scaleable, and they can order a plant with a daily capacity of anywhere between 10,000 to 100,000 litres.
Asked about demand for these plants in the region, the general manager of Arndt GmbH, Dieter Arndt, told PMV that there is a natural demand in every major city for a used cooking oil conversion plant, due to the ubiquitous supply. All it takes is a company interested in developing the market.
Arndt is also the general manager of AlgaOil, and signed a Memorandum of Understanding with Lootah Biofuels to research production of algae for extraction for biodiesel. The agreement is tied up with the Lootah Technical Centre (LTC), and students there will be engaged in the research into algae.
“The knowledge transfer is important,” explains Lootah. Education is one of the core values of the Lootah Group.
The timeline for algae currently proposed is six-18 months of research and production, before embarking on larger scale production if there has been success in the laboratory.
Despite the benefits in terms of skills transfer, nevertheless it is clear that there is no commercial certainty around algae production. Likewise, with the biodiesel it currently produces, the costs of buying the used oil fluctuates, which impacts on the production costs. Biodiesels are not currently a get-rich-quick path.
“We are not looking to make money,” says Lootah. “We are looking to be the change in the country, and lead this change.”
Committed as he is, Lootah is quite clear that the process will not happen overnight. The biofuels project is as much about changing attitude as it is about reducing carbon dioxide emissions and waste.
“Our immediate challenge is not doing it as a business, our aim is to change the attitude of the consumers, decision makers, and take the lead as Dubai, and also as the UAE as a country. And then if in Dubai [change] starts, you can be sure it will be going ahead in the Middle East. Dubai is a hub of the change in the Arab countries.”
“Just recently our leadership, Sheikh Mohammed, announced the green partnership economy. This is the biggest support for our kind of project. Not us only, but other companies that are working on renewable energy or green energy. It is happening.”
UAE’s biodiesel advantage
Producers of biodiesel in the UAE and the Middle East generally have a number of advantages over producers in Europe. One issue to be overcome with biodiesel is that it starts to gel at low temperatures, and will clog the engine.
One solution to the problem is to equip fuel tanks with warmers. Manufacturers also have to manage their production process, and supply biodiesel that will be useable during cold weather.
That is not a problem in the Middle East, due to the range of ambient temperatures, and Lootah Biofuels is able to produce their biodiesel to the American ASTM standard, rather than the EU standard.
Another advantage in the UAE is that most users of commercial vehicles are already equipped with the required infrastructure to introduce biodiesel into their fleet, since most will have diesel tanks at their vehicle depots, and will source diesel directly, rather than having their drivers fill up at petrol stations. It is estimated that 60% of the market for diesel does not buy from petrol stations.
For the Lootah Group, biofuels only make up one small aspect of their sustainable transport focus. CNG (compressed natural gas) is in many ways a better option, says Lootah, and he expects its popularity to increase.
CNG involves the installation of gas tanks, and the gas is fed into a vehicle’s combustion engine. One advantage of CNG is that the vehicle can run on petrol when its gas is used up. Currently gas is offered by ADNOC in petrol stations in Abu Dhabi.
However one advantage of biodiesel is that there is no cost of conversion, unlike CNG. It is thought that the cost of conversion has been a limiting factor in the uptake of CNG, although by some estimates its use is growing at a rate of 30% annually.
Better than both CNG and biofuels is the electric car, says Lootah, a technology he believes has a big future.