Biodiesel: A subtle saviour

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Spanning three issues, Harbour Times looks at the current policies to encourage and police vehicles to protect Hong Kong’s environment.

First: biodiesel. Next: Green tax exemptions for commercial and consumer vehicles.

Despite all the hot air blown all over the air pollution issue, Hong Kong’s air is still allegedly killing us while solutions are ignored. Some say biodiesel is part of the answer, but Hong Kong hasn’t bought it – yet.

The talk
2006 saw former Chief Executive Donald Tsang lead the “Action Blue Sky Campaign”, which introduced several Air Pollution Indices and legislation. After CY Leung’s appointment in 2012, his government committed more than HKD10 billion in subsidies to phase out more than 80,000 pre-Euro IV standard diesel commercial vehicles. In his maiden policy address, C.Y. Leung said, “For the well-being of future generations, the government and the community must commit to improving the environment. To tackle key issues such as waste management and air quality requires us to make choices.”

Biodiesel, a form of clean renewable energy used in vehicles, has not been one of those choices despite its reported environmental benefits and worldwide recognition.

International Standard
Biodiesel, often produced from edible oils such as palm, soy, and rapeseed oils, is often used blended with petrodiesel fuels, or in its pure form (B100) in specialised engines. The renewable energy source has long been adopted in much of the Western world. The EU currently has a 5.75% mandate for the use of biodiesel in all fuels sold and aims to raise the standard in coming years. The United States currently has various state mandates, with a B10 (10% blend) state mandate currently implemented in Minnesota. Indonesia, Malaysia, South Korea, Taiwan, Thailand, and Vietnam represent countries in Asia who have implemented mandatory biodiesel blending regulations.

Hong Kong on the other hand has yet to adopt the renewable fuel. The Environmental Protection Department (EPD) commissioned the University of Hong Kong to carry out a study on the feasibility of using biodiesel vehicles in 2003. The study indicated that a B20 blend would cause less than 1 percent decrease in engine power, a 16 percent reduction in smoke opacity, and 14 percent reduction in carbon monoxide and hydrocarbon emissions compared to vehicles running on ultra low sulphur diesel (ULSD). But because of concerns regarding the compatibility of the fuel with engines at the time and the lack of warranty coverage for any subsequent damage, the fuel alternative was not adopted.

Up in the air
Since then, instead of embracing biodiesel into the current fuel mix, the government has taken other measures, such as the 10 billion dollar phasing out of pre-Euro IV commercial vehicles, adopting the Euro V diesel at the retail level, and imposing stricter inspections on vehicle emissions. The EPD has taken the stance that the adoption of biodiesel will not deliver a substantial impact reducing pollutant emissions given the implementation of measures above. In other words, the other measures have already done the heavy lifting.

The official website of the EPD cites that, “In respect of the potential to improve roadside air quality, Euro V diesel and biodiesel are similar.” Mr. Mok Wai Chuen, Assistant Director for the Air Policy Division of the EPD, said something similar in an interview with HT, “For modern diesel engines, they have very advanced emission control systems, […] a little bit more biodiesel is not going to help.” Scania, a diesel engine manufacturer for heavy vehicles, also echoed the sentiment, saying, “In regions that have adopted the more stringent emission standards of Euro V and Euro VI, the use of biodiesel will have minimal or no impact on local air quality. Whether the engine is running on fossil diesel or biodiesel, the emission levels will be similar as stipulated by the emission regulation.”

The lack of political will to support mandatory legislation for biodiesel blending has meant manufacturers have been unable to gain significant market share in the local fuel trade. ASB Biodiesel (ASB), a biodiesel factory that came into production this year in Tseung Kwan O, has an annual production capacity of 100,000 tonnes of biodiesel but the majority of this is exported to Europe in various forms. In fact, without mandatory requirements to incorporate the biofuel, 95% of locally produced biodiesel is exported.

Mok also cited the price of biodiesel as a stumbling block towards its adoption. He said “It is not price competitive…even without tax.” ASB estimates that a B5 (5%) blend would be about 0.5% or 6 cents beyond the current price for diesel implying a cost of about $104 million per year. While the biodiesel manufacturer believes it is but “a small price to pay for the many environmental benefits.” Mok had this to say, “People are blaming the government for not doing enough to promote the use of biodiesel – that’s not the case. It’s more expensive.”

Whether the EPD’s policy may change with regards to biodiesel is still up in the air. The Hong Kong government commissioned a study on widening the use of biofuel and its mandatory blending into fossil diesel. Christine Loh Kung-wai, the Undersecretary for the Environment, announced in July that the study is targeted for completion in the second quarter of next year and any mandatory adoption of the fuel could be years away in the future.

More than fresh air
While biodiesel may not have a substantial impact on reducing roadside pollution, its official introduction could still be advantageous for many reasons. Beyond its effect on the emission of pollutants, the use of the fuel significantly reduces the production of greenhouse gases (GHG). According to data from the EU, cited by ASB, using biodiesel can reduce GHG emissions by 85%. The biodiesel produced in Hong Kong, which recycles waste cooking oil and grease trap waste, is especially superior compared to other biodiesels. This production method requires less processing and does not sacrifice land, often used to grow crops for biofuel, that could otherwise be used more efficiently. The reduction of GHG emissions is essential to mitigating global warming and biodiesel could play a huge part in that.

Biodiesel could solve waste and hygiene problems
Waste management has increasingly become a concern as landfills are slowly reaching capacity. With the Government currently looking to waste reduction at the source as one of its long term solutions, the development of the local biodiesel industry could alleviate some pressure by recycling food wastes. Hong Kong’s three biodiesel manufacturers all use waste cooking oil and grease trap waste as feedstock for their product, and that could be beneficial to the environment in Hong Kong. ASB goes door to door 10,000 times a month to make waste oil collection. They told HT, “Hong Kong generates about 25,000 tonnes of used cooking oil waste every year, we have about 30% market share of that, so we’re the largest collector here in HK.” Yet, the lion’s share of Hong Kong’s used cooking oil is not recovered by the biodiesel industry. An alarming reason behind this is the lack of regulation towards the handling of the supposed after product. Since demand for biodiesel locally is limited, it is much more profitable for restaurants to sell used cooking oil to recyclers who process the waste and convert it into the infamous gutter oil. A push in the biodiesel industry, coupled with regulation towards the handling of waste cooking oil, could be a win-win situation for all. This would lower costs for biodiesel manufacturers and rid Hong Kong, or at least diminish, of the concern for the use of recycled waste oil by local food providers.

In the long run, as nonrenewable energy sources are being gradually, and inevitably, exhausted, Hong Kong must have a sustainable replacement to fall back on. By slowly introducing and adopting biodiesel as a renewable alternative, Hong Kong can secure a significant option for future energy needs early in the game.

Biodiesel’s heavy lifting
Gammon Construction, Hong Kong’s largest construction company, began adopting the use of Euro V B5 biodiesel in its off road vehicular fleet, which is also the largest in Hong Kong. It exceeded its 15% target share of annual fuel consumption in 2013 to reach 30%, and is on its way to 50% in 2014. Gammon aims to eventually replace all of it’s off road diesel use with B5 biodiesel, which accounts for 90% of its diesel use. Since about 60% of its environmental footprint comes from the use of diesel, converting to biodiesel and eventually moving up to a higher blend would significantly slice its carbon emissions. So far, the company estimates that the 60 million litres of fuel it converted to the B5 mix saved 930 tonnes of carbon emissions, which translates to about 4,600 trees. “You could say that’s not significant, but its a very competitive way to reduce the carbon in your business,” shares Shirlee Algire, Environment & Sustainability Manager, “And that’s the key message: how do we do this and maintain competitiveness.”

In terms of helping out in Hong Kong’s war on roadside pollution, the case for adopting biodiesel does not look to be a game changer. This is especially true when commercial vehicles, the main suspect for emitting roadside pollutants in Hong Kong, are slowly being replaced with cleaner alternatives under stringent policies.

But the benefits of developing a biodiesel industry are real. Whether the Government sees as such depends on how involved it wants to be in the broader battle against climate change, and to a smaller extent, waste reduction and keeping gutter oil from our dinner plates. Ultimately, a renewable and sustainable energy source will be needed. Biodiesel seems to be part of the