The plans to power cars with cooking oils don't stand a chance

Is there any way the auto industry can withstand the onslaught of electric vehicles? Chevron Corp is hoping so.

The oil producer sent three Toyota Motor Corp models on a trip across the US last week with the objective of proving that its “renewable gasoline blend” might provide a better option for decarbonising road transport than battery-powered vehicles. Fossil fuels make up less than half of the blend and it’s more than 40 percent less carbon-intensive than conventional gasoline, according to Chevron.

This isn’t just marketing. The company spent $3.15 billion last year taking over Renewable Energy Group Inc, or REG, a leading producer of biodiesel. Crucial to that deal was REG’s expertise in turning waste into fuel — roughly 70 percent of the feedstocks for its bio-refineries comes from waste oil and waste agricultural produce.

That’s a tempting prospect. It’s relatively easy to convert the sort of sugars and vegetable oils that you’ll find in your kitchen cupboard into biofuels, but there’s only so much of that stuff you can produce. Soybeans or sugarcane that are used to power vehicles aren’t being used to nourish humans, and with a global market for agricultural produce that means cars are often privileged over the one-tenth of humanity who go hungry. From next to nothing in the 1990s before the current round of gasoline blending mandates came in, fuel now accounts for a larger share of America’s farm produce than food for domestic consumption.

Waste products that are headed for landfill or the water treatment plant provide a way out. Instead of making fatbergs in the city’s sewers, the millions of gallons of used cooking oil thrown out by restaurants and food processors could be turned into a revenue stream, converted into road fuel in biorefineries. Rudolf Diesel first designed the engine named after him to run on vegetable oil. With some minor chemical tweaks, used cooking oil, or UCO, can be blended seamlessly into the fuel that comes out of a gas pump.

That’s the theory, at least. The problem is, there’s not enough of it.

The world produces a bit more than 200 million metric tons of vegetable oil every year. But oil production comes to nearly 5 billion tons, so all the oilseeds in the world wouldn’t be able to fuel our vehicles for much more than a couple of weeks. And of course, the vast majority of the vegetable oil we produce isn’t turned into waste fats, but consumed by humans or animals and metabolised into living tissue.

The most bullish forecasts don’t see global used cooking oil supply rising above 28 million tons a year in 2030, enough to displace about 0.5 percent of the world’s fossil oil production. Rendered animal fats probably add at most 10 million tons to that total. Put another way: Even the most optimistic prospects for UCO wouldn’t make as much difference in emissions terms as, say, more widespread adoption of engines that switch off when idling, an activity that accounts for about 1.6 percent of America’s total greenhouse gas emissions.

Are there ways to get our hands on more waste oils? Not by much. One of the challenges for supply of used fats is that they’re sourced from myriad restaurants, food factories and domestic homes, making it difficult to collect on an industrial scale. Raising the price by mandating that fuel suppliers blend in more UCO might provide an economic incentive for waste collectors to track down supplies, but it’s also rife with unintended consequences.

In the US, there’s been a small-scale crime wave in recent years from criminals stealing UCO, often nicknamed “liquid gold.” In Europe, biofuels producers and activists have claimed that oils imported from Asia and labeled as waste are often virgin oils such as palm oil, adulterated to resemble kitchen grease. That would hardly be surprising. Used cooking oil trades at an average 29% premium in China to the price of palm oil futures in Malaysia, giving criminals a roughly $300 per ton incentive to convert one product to the other.

It’s no bad thing that mandates on waste fuels are encouraging the growth of supply chains to convert trash into treasure. If we’re serious about building a sustainable circular economy that reuses and recycles products rather than just tipping them into landfill, we’ll need that infrastructure to support it.

We shouldn’t make the mistake of thinking that this process will cause so much as a dent in oil demand, however. Chevron wants to promote “renewable gasoline” not because it will reduce consumption of crude petroleum, but because it hopes it could provide a bulwark against the cleaner, cheaper, more disruptive threat posed by electric vehicles. For centuries, we’ve used waste fats to make consumer goods such as soap, moisturisers and makeup. Like all those products, the impact on oil demand from the rise of used cooking oil will be mostly cosmetic.

David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. Views are personal, and do not represent the stand of this publication.

Credit: Bloomberg