Introducing biofuel blends at UAE fuel stations could boost sustainable transport push

The shiny new tanks at the Lootah Biofuels factory, nestled within Dubai Industrial City, are a sharp contrast to the grimy, greasy and well-worn ones you would expect to see in an oil factory.

“We had it polished for you,” jokes Yousif Lootah, chief executive of Lootah Biofuels.

But the factory is playing a key role in turning the wheels of the circular economy by converting used cooking oil into biodiesel and other by-products, providing an alternative fuel source for transportation.

Mr Lootah got the idea for a biofuel plant back in 2009, when he was in Europe. Keen on researching alternative options for sustainable transport outside of electric vehicles and compressed natural gas, he bought a small biofuels converter — which still stands in his office — as a prototype, with the capacity to produce 20 litres of biodiesel.

“With this machine … I tried it with our vehicles and then from there [I had] the idea of starting a company and investing in this … so that was the start,” Mr Lootah says.

After the company’s first factory opened in Al Quoz in 2011, it expanded operations in line with the growing global demand for biofuels. Its factory in Dubai Industrial City has the capacity to supply 100,000 litres of biodiesel per day.

Waste-based biofuels can prove to be a key driver of energy transition efforts and boost the current limited global supply of low-carbon transportation fuels, global research consultancy Wood Mackenzie said in a report last year.

Biofuels — a cleaner replacement for petroleum-based fuels that are produced from renewable sources including new and used vegetable oils and animal fats — account for only 3 per cent of the world’s 100 million barrels per day liquid fuel demand, it said.

In 2021, biofuels represented 3.6 per cent of global transport energy demand, mainly for road transport, according to the International Energy Agency intergovernmental organisation.

In the net-zero scenario, biofuels’ contribution to transport quadruples to 15 per cent in 2030 — accounting for almost one-fifth of fuel demand for road vehicles, it said.

“In turning waste into biofuels, being local is an advantage,” Wood Mackenzie vice president Alan Gelder said.

“The biofuels ecosystem would revolve around a hub-and-spoke distribution model, where the initial conversion of waste to biofuels is local, with the liquids produced then aggregated for processing in an existing refining facility.

“Refineries know how to do this and for many, this could be key to their long-term viability. It would have tremendous benefits to local economies and employment, creating a powerful argument for governments to develop incentives.”

Mr Lootah is hoping that the UAE will soon introduce policies to have a mandatory biofuel blend at petrol stations in the country.

Similar regulations have already been implemented in other parts of the world, including in Malaysia, Japan and parts of Europe.

“I see the mandatory blend is coming. It is coming because we [the UAE] want to show that … we are at this level [of adopting sustainable practices]. We are having Cop28 and the Year of Sustainability in 2023. Having such a regulation is going to add more value to the country,” he says.

Adopting such a regulation would lead to a “significant” reduction in carbon emissions, he says.

Along with biodiesel, Lootah Biofuels also produces a biofuel racing blend which can be used for “supercars”. It is currently being supplied to garages across the country.

The blends can be of different levels, and for a biofuel mix of up to 11 per cent, cars will not need to be modified.

The company helped offset around 700 tonnes of carbon dioxide last year, Mr Lootah estimates.

In terms of supply, Mr Lootah says the company buys used cooking oil from 16,000 units including several outlets of popular brands such as KFC, as well as hotels and individual houses.

“Previously, approximately 500 tonnes of used cooking oil per month was collected by Lootah Biofuels from the UAE's local market. Unfortunately, this collection has decreased as a result of local traders entering the market and starting to gather and export used cooking oil to other nations,” he says.

“UAE recycling facilities are unable to obtain the raw material due to intense competition in the local trade market, which is negatively impacting the sector.”

The company currently has more than 100 active customers, including local fuel distributors, and also exports to international markets. It recorded annual revenue growth of 45 per cent in 2022 and is “profitable”, the chief executive says.

Mr Lootah estimates that the company, across its factories, has the capacity to produce 65 million litres of biodiesel annually at present.

It is currently operating at between 50 per cent and 80 per cent of its capacity at its Dubai Industrial City factory, depending on demand.

However, Mr Lootah stresses that they can supply across the UAE if the government mandates blended fuel to be sold at the pump.

“The market will be created” as and when the regulations take effect, he says.

“I believe we can supply all the government stations. But even if not, more and more companies will come and join this mission that we are having.

“Saving the environment is not an option … We need to look for big changes right now. This year. Not later, not after one year, but right away, so that we can see fruitful things happening in the future.”

The company is also expanding operations and is awaiting the certificate of completion to open its factory in Abu Dhabi — expected this month.

Lootah Biofuels has also signed a deal with authorities in Maldives and plans to open its first factory outside the UAE in the island nation.

It is also expanding its business lines.

“Diversification is a must — we started doing biofuels then we moved into the collection of used cooking oil, then we moved into making the bio-racing fuel then we moved into services and consultation as well,” says Mr Lootah.

The company has also started making soaps, sanitisers and other products using glycerine — a by-product — and is seeking out partnerships with other companies to package and sell them.

One more area of focus is sustainable aviation fuel, which is registering strong demand globally, with local airlines such as Emirates and Etihad Airways also recently trialling flights using SAF.

“We are doing research and development for sustainable aviation fuel. And we see that within the years, it’s going to be fruitful,” says Mr Lootah.

"I am very cautious and careful on sustainable aviation fuel because its freezing point is very risky … We saw [during the process of converting] used cooking oil to biofuel, how much it gets cooled, so we're very cautious.

“And once we develop it we will get the certification, not only in the UAE but [also] in Germany and the Netherlands … Safety for us has the most priority.”