HK entrepreneurs turning cruisers into vegetarians

WVO vs B100

Since bio-diesel is available in the Hong Kong market, the question arises as to why diesel-engined boat owners should bother converting to run on vegetable oil? After all, the conversion process costs up to USD10,000 per vessel according to TnT Recycling.

Terrebrood and Tam cite two reasons: operational cost savings and a reduced environmental impact. The first is certainly going to be the more compelling to the owners while the second is of broader public interest.

TnT Recycling is offering to supply boat owners with its cleaned up WVO at a 20 percent discount to the price of diesel in Hong Kong. For those whose boats are used on a regular basis, that offers a fairly quick return on investment.

The reason why a startup company is able to do this is that its raw material, production and distribution costs are not that high (certainly lower than the cost involved in producing bio-diesel). Also, critically, WVO is not subject to the HKD2.89 (37 US cents) per liter tax that applies to the sale of diesel oil (except Euro V diesel) in Hong Kong. And although 100 percent bio-diesel (B100) should certainly quality for the Euro V tax-break, in practice it sells at a premium to petroleum diesel.

The discussion about reduced environmental impact is a little less straightforward. What is clear is that, as with B100, engines running WVO produce zero sulfur dioxide (SO2) while “marine light diesel” sold in Hong Kong has a high (0.5 percent) sulfur content. Being derived from vegetables both WVO and B100 can be considered to be carbon neutral. Studies also suggest WVO produces less hydrocarbons, carbon monoxide and particulate matter compared to petroleum diesel, but NOx emissions are about the same, if not slightly higher. So, that’s generally a big green thumbs-up for both WVO and B100.

Apart from being more expensive the problem with B100 is that it is quite hard to come by in Hong Kong. Dynamic Progress International, the only local bio-diesel refiner, currently produces 22,000 tonnes of bio-diesel per year from WVO and its focus is on large customers including the Hong Kong Government.

Incidentally, although Dynamic Progress says it can deliver at any ratio between B2 (2 percent bio-diesel and 98 percent petroleum diesel) and B100, most of its production goes into a B5 blend because that’s what customers are apparently asking for.

In Europe, the world’s largest bio-diesel market, B20 is sold at the pump without creating maintenance issues (B100 is a strong solvent that can degrade natural rubber components). Obviously Hong Kong’s fleet owners are a conservative lot and just as obviously, B5 lacks most of the benefits of B100.