ArabiamOilandGas.com delves below the corporate strategy to understand what really makes the industry’s leaders tick.
What trends are you noticing in the biofuels sector?
In the UAE, the introduction of biofuels is a new and novel concept. It took time for people to accept biofuels as a fuel alternative. However, the remarkable growth in the consumption of biodiesel is a testimony to prove that the ongoing process of awareness initiatives by Lootah biofuels and the government has shown positive results. The initiative of Lootah biofuels aims at active participation and involvement of people, companies, entities and policy makers. The success helps us to work together in bringing a fundamental change towards society and
the environment.
What are your predictions for biofuels in the coming years?
The recent growth in UAE energy demand comes at a time of rising global concern over carbon-dioxide (CO2) emissions and climate change. The UAE government is aware that they must prepare for a world of increased competition in future energy markets. Rather than perceiving biofuels as threats to the conventional energy markets, the region has started looking at biofuels as part of an unstoppable global trend, and one from which they could actually benefit if they develop competitive technologies themselves.
What impact are falling crude oil prices having on your business? How far do you think the prices will fall?
The crude oil price is impacting the international market. As far as Lootah Biofuels is concerned, yes it will definitely affect our business because our 95% diesel is petro diesel and we are blending it with 5% biodiesel b100 and selling B5. In just a couple of weeks the diesel price in Dubai was slashed down 20 fils by Enoc, Eppco and Emarat. Compared to this, our price is still less than the price offered by them. Apart from the lower price, we also provide the credit facility to maximum 60 days. As of now I cannot see any further price cut down, but definitely if price continues to fall, then we can consider to give further discounts to our clients.
How is the Middle East’s attitude to biofuels changing?
It is definitely changing. The region is very serious about developing a market for biofuels. Producing biodiesel at prices on a par with the diesel prices prevalent in the GCC was once considered impossible. With more and more GCC countries removing subsidies for diesel and following market prices, biodiesel has become attractive or at least become realistic. Now the government and authorities have become serious in reducing the carbon emissions. Since biofuels have already entered the UAE market, the industry has the full support of the government. Working closely with universities, engineering teams and marketers, we have developed a model for Biodiesel production that is complimentary to various sectors which is waste, transportation, energy, education and research, thus complimenting the sustainability strategy and image of the UAE.
How do biofuels contribute to the sustainability of the region?
Since the UAE is among the largest producer of GHG emissions in the world biofuel possesses huge potential to minimize these emissions in the region. The projected sustainability levels of biofuels could be achieved by aiming for a different feedstock use. For example, the 80% GHG savings would require a 60% contribution from recycled oils, while minimizing low sustainability production pathways. Research undertaken in the US has proven that biofuel reduced net carbon dioxide emissions by 78% compared to conventional diesel. Today, biodiesel is recommended for use by the US Environmental Protection Agency and EU Environmental Commission.
