HK entrepreneurs turning cruisers into vegetarians

A pair of former investment bankers based in Hong Kong has launched a new business that aims to persuade owners of diesel-powered pleasure boats, of which there are plenty in local waters, to run their craft on waste vegetable oil (WVO). And, like all good sustainable business ventures, this one looks capable of making a healthy profit while also helping the environment.

The idea of running a diesel engine on vegetable oil is not new – inventor Rudolf Diesel having demonstrated one of his eponymous motors fueled by peanut oil at the 1900 Paris Exhibition – but neither is it commonplace, especially in Asia. In the intervening century or so the idea has been largely ignored because of the prevalence of low-cost petroleum diesel oil.

In 2012, however, the price of diesel is anything but cheap in Hong Kong – the current pump price including tax being HKD12.02 (USD1.54) a liter – which impelled TnT Recycling co-founders Hank Terrebrood and Shing Tam to start looking around for alternative fuel sources for their boats.

The pair are keen on game fishing which, given the near collapse of fish stocks in Hong Kong waters, entails cruising going up to 100 miles offshore. Terrebrood's boat, Reel Affinity, has an 850-US gallon (3,218 liter) fuel tank so every time he filled up it was costing nearly HKD40,000 (USD5,128) which is not chump change, even for an investment banker.

“My boat has a pair of diesel engines made by MAN and it turns out they started trying out the use of vegetable oil as fuel back in the mid-90s. So there's a fairly long track record for this in Europe, and its gaining increasing acceptance in the US, particularly among commercial fishing boat operators,” he said.

Conversion

The conversion work needed to run a diesel engine on vegetable oil is not that complicated. In fact, strictly speaking, there's no change to the engine at all since the modification is to the fuel system.

TnT Recycling's conversion entails adding an auxiliary fuel tank to the boat, which holds a smaller amount of conventional diesel oil that gets used for the engine start-up and shutdown phases. A heating coil, which draws heat from the engine, is installed in the main fuel tank to bring the vegetable oil up to a operating temperature of around 80-centigrade, reducing its viscosity. And a fuel pump and 2-micron filter are fitted between the main tank and the engine’s fuel injectors.

“When the system is up to temperature, it is simply a matter of flipping a switch that activates a solenoid to cut over from the supplying the engine with diesel oil to supplying it with vegetable oil. From there it is plain sailing. We switch back to diesel at the end of the trip to flush the system, which avoids vegetable oil congealing in the fuel injectors,” said Tam.

The company has started collecting used cooking oil from Hong Kong restaurants and has established a processing center where it is put through a process of heating and centrifugal-filtering to eliminate any water content and particulate matter. Terrebrood says this locally sourced WVO is pretty clean so process yields are high but, in the longer term, TNT Recycling may well import waste cooking oil in bulk from China.

Although about 10,000 liters of used cooking oil is produced every day in Hong Kong, it is estimated that only about 10 percent is being collected for recycling with the rest going down the drain or into landfills.

“The established bio-diesel plant and the new one being built (in Hong Kong) already have contracts with the largest producer of waste oil so, although we want to help increase the amount that gets recycled, it will take time to build up a network of sources. In the meantime importing used waste oil from China is a viable option, especially now that there’s a crackdown on putting the stuff back into the food supply chain,” said Terrebrood.

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.