Hong Kong biodiesel producer plans expansion to China, calls for mandate

Hong Kong-based biodiesel producer ASB Biodiesel is planning to expand its operations to the Pearl River Delta region in South China starting in 2018.

The company considers China a land of “big potential” due to the large amounts of waste oils available, EJ Insight reports.

ASB is currently considering the location for the plant, which could be near any city with strong law enforcement regarding waste oil treatment and a population of at least 20 million.

“By the end of 2017, we will utilise 80% of our capacity, which is enough for us to be profitable,” said Roberto Vázquez, CEO at ASB. “We will start looking into opportunities in China next year.”

The company intends to seek a local partner such as a state-owned oil company, he said.

Founded in 2007, ASB converts used cooking oil or waste oil from vegetable and animal fat into biodiesel.

It has a maximum annual production capacity of 100,000 tonnes, enough to fuel every diesel engine on Hong Kong’s roads with B10 grade biodiesel, ASB’s website reads.

It is also enough to offset 257,000 tonnes of greenhouse gas emissions — 3.6% of the total emitted by Hong Kong’s transport sector.

ASB Biodiesel’s final product is mainly sold to Europe and China, with a small amount sold in Hong Kong.

Biodiesel sales in Hong Kong have limited possibilities according to Vázquez, as most buyers are voluntary due to biodiesel being more expensive than fossil-based diesel.

When ASB built its Hong Kong plant in 2007, there was a levy of HK$2.89 (34 euro cents) per litre on regular diesel, but the tax was cancelled in 2009, which in turn eliminated the price advantage for biodiesel. 

Vázquez hopes the Hong Kong government will launch a mandate programme that would require fuel suppliers to have their products blended with biodiesel to create a market for biodiesel makers.

The Hong Kong government should consider subsidising biodiesel users, as air pollution is mainly caused by emissions from heavy duty vehicles which use diesel, he also said.