Home > Hong Kong Means Business > Venture Hong Kong

Subscribe


 Print  Email
Content provided by :  Hong Kong Trade Development Council
 

The Good Oil

The plant can produce 100,000 tonnes of low-carbon transport fuel a year  
The plant can produce 100,000 tonnes of low-carbon transport fuel a year 

ASB Biodiesel, a Hong Kong company established in 2007, is a joint venture between Salam Bank-Bahrain and a group of Gulf-based financial institutions. In October 2013, the company fired up its US$165 million New Territories plant, one of the world’s most technically advanced facilities of its kind.

The plant can convert a range of recovered and recycled materials, including cooking oil and grease trap oil, waste animal fat and vegetable-oil refinery waste, into low-carbon fuel for use in diesel engines of all kinds. The top-quality biodiesel it produces meets European standard EN 14214 and the rigorous sustainability requirements of the EU's Renewable Energy Directive.

Fuel of the Future

 Anthony Dixon
 

Anthony Dixon, CEO, at ASB Biodiesel’s state-of-the-art Hong Kong facility

Running at full capacity, the plant can produce 100,000 tonnes of low-carbon transport fuel per year. That’s enough to offset 257,000 tonnes of greenhouse gas emissions, equivalent to 3.6 per cent of the total emitted by Hong Kong's transport sector.

Biodiesel made from waste has been called “the fuel of the future.” It cuts carbon emissions by 83 per cent and reduces particulate emissions, unburned hydrocarbons and carbon monoxide, which give rise to poor air quality. It is also a renewable fuel, which can be used in existing, unmodified diesel engines. ASB Biodiesel CEO Anthony Dixon calls it the “fuel of the present,” with biodiesel use now a legal requirement in more than 60 countries around the world. Annual global consumption has already reached 24 million tonnes.

When choosing a location for its ground-breaking plant, Hong Kong came “top of the list,” according to Mr Dixon. Hong Kong, like many of its neighbours, has some big environmental challenges: waste, air quality and climate change. It was, therefore, an opportunity to be part of the solution, he said.

Hong Kong, Mr Dixon noted, is also very investor-friendly in terms of transparency, governance, rule of law and capital markets’ access. A major advantage is its proximity to the Chinese mainland, a market of huge potential for environmental business, he added.

Investment Showcase

ASB Biodiesel’s advanced technology will cut roadside pollution in Hong Kong and elsewhere 
ASB Biodiesel’s advanced technology will cut roadside pollution in Hong Kong
and elsewhere
 
“We also wanted to build our first plant somewhere where we could showcase our business model, a jumping-off point for future investments,” said Mr Dixon. “There’s a lot of business traffic coming through Hong Kong. It is an easy place to say to potential investors: you want to see our plant, hop a flight or a train to Hong Kong and be at the factory gate in an hour. It’s just so easy and convenient.”

Urban density was another consideration. The company collects waste oil from more than 4,000 restaurants across the city, commanding a 30 per cent market share. “In Hong Kong, we can get a high volume of raw materials from a smaller radius,” Mr Dixon said.

Due to the plant’s advanced technology, almost every drop of used oil is recycled. About 95 litres of biodiesel can be produced from every 100 litres collected. Bio-heating oil and biogas, by-products from the wastewater treatment and the distillation of biodiesel, are recycled back to the on-site boiler for use in the production process. Other by-products include glycerine, used in the pharmaceutical industry, and fertiliser for agriculture, which is sold locally and on the mainland.   

“We start with waste, recycle our own by-products as much as possible, and we produce clean fuel – it’s a great business model,” Mr Dixon said.

The company also imports some raw material, including used cooking oil from other locations around the region, to boost its output.

Market-Ready Model

 Hong Kong SAR Government Financial Secretary John Tsang (left) inspects the plant with Mr Saif
 Hong Kong SAR Government Financial Secretary John Tsang (left) inspects the plant with ASB Biodiesel Chairman Abdulla Saif
ASB Biodiesel expects to make its first sale of biodiesel to the local market this month and to export its first shipment of refined biodiesel to Europe in March. In about three years, it expects that the majority of its production will be used locally in Hong Kong. Then it will be time to build new plants. No locations have yet been identified, but Mr Dixon expects the mainland to be next.

For all this projected expansion, Hong Kong “will be the beacon,” he said. “Our plant is a working, profitable example of what the Hong Kong Government aspires to achieve with other parts of its waste and recycling industries,” Mr Dixon said. “Our business model has broad applicability; the general concept is that by creating markets for high-value-end products that can be produced from waste, not only can the waste problem be solved, but Hong Kong also gets additional environmental benefits.”

Biodiesel can be used as a substitute for fossil diesel: any diesel engine, whether for cars, buses, trucks, ships or construction equipment, can use biodiesel without any modification to the vehicle. Most engine manufacturers now support the use of biodiesel, Mr Dixon said.

Pioneering Project

Biodiesel can also be used for power generation, as demonstrated in Hong Kong’s Zero Carbon Building in Kowloon Bay, which uses a tri-generation system to provide heat, cooling and power to the building. 

Officiating at the ASB Biodiesel plant’s October launch, Hong Kong Financial Secretary John Tsang called it a pioneering project for the Asia-Pacific region. Company Chairman Abdulla Saif, advisor to the Prime Minister of Bahrain for Economic Affairs said: "We are very pleased that we could open this plant in Hong Kong, which offers the ideal population density to support waste collection and recycling, a well-developed regulatory and business environment, and proximity to the mainland Chinese market."

For the company’s Australian CEO, a former financier from Perth, the thought of cleaning the air “using waste as the raw material,” is exciting. He adds that it also “avoids the twin controversies surrounding biofuels, namely land-use change and food versus fuel, while significantly reducing greenhouse-gas emissions.”

Related Link
ASB Biodiesel

 Print  Email