Is there any way the auto industry can withstand the onslaught of electric vehicles? Chevron Corp. he expects it
The oil producer sent three models of Toyota Motor Corp. on a tour of the United States last week with the aim of demonstrating that its “renewable gasoline blend” could provide a better option for decarbonizing road transport than battery-powered vehicles. Fossil fuels make up less than half of the mix and are more than 40% less carbon intensive than conventional gasoline, according to Chevron.
This is not just marketing. The company spent $3.15 billion last year taking over Renewable Energy Group Inc., or REG, a leading biodiesel producer. REG’s expertise in turning waste into fuel was crucial to this deal: approximately 70% of the feedstock for its biorefineries comes from used oils and agricultural waste.
It’s a tempting prospect. It’s relatively easy to turn the kind of sugars and vegetable oils you’ll find in your kitchen cupboard into biofuels, but there’s only so much you can produce. The soybeans or sugar cane used to fuel vehicles are not used to feed humans, and with a global market for agricultural products, this means that cars are often privileged over the tenth of humanity that he’s hungry From almost nothing in the 1990s before the advent of the current round of gasoline blending mandates, fuel now accounts for a larger share of American agricultural production than food for household consumption.
Waste products that go to the landfill or sewage treatment plant provide an outlet. Instead of making fatbergs in city sewers, the millions of gallons of used cooking oil thrown away by restaurants and food processors could be turned into a source of income, turned into road fuel at biorefineries. Rudolf Diesel first designed the engine that bears his name to run on vegetable oil. With a few little chemical tweaks, used cooking oil or UCO can be perfectly mixed with the fuel coming out of a gas pump.
That’s the theory, at least. The problem is that there aren’t enough of them.
The world produces just over 200 million metric tons of vegetable oil each year. But oil production is close to 5 billion tons, so all the oilseeds in the world couldn’t fuel our vehicles for much more than a couple of weeks. And, of course, the vast majority of vegetable oil we produce does not become waste fat, but is consumed by humans or animals and metabolized into living tissue.
The most bullish forecasts do not see the global supply of used cooking oil exceeding 28 million tonnes per year by 2030, enough to displace about 0.5% of global fossil oil production. Rendered animal fats probably add up to 10 million tons to this total. Put another way: even the most optimistic outlook for UCO would not make as much of a difference in terms of emissions as, say, more widespread adoption of engines that shut down at idle, an activity that accounts for roughly l ‘1.6% of total US greenhouse gas emissions. .
Are there ways to get our hands on more used oils? Not much. One of the challenges for the supply of used grease is that it comes from a multitude of restaurants, food factories and households, making it difficult to collect on an industrial scale. Increasing the price by requiring fuel suppliers to incorporate more UCO could provide an economic incentive for waste collectors to locate supplies, but it also has unintended consequences.
In the United States, there has been a small-scale crime wave in recent years of criminals stealing UCO, often nicknamed “liquid gold.” In Europe, biofuel producers and activists have claimed that oils imported from Asia and labeled as waste are often virgin oils such as palm oil, adulterated to look like cooking fat. This would not be surprising. Used cooking oil trades at an average premium of 29% in China to the price of palm oil futures in Malaysia, giving criminals an incentive of roughly $300 per tonne to turn a product into a other
It’s no bad thing that fossil fuel mandates spur the growth of supply chains to turn trash into treasure. If we are serious about building a sustainable circular economy that reuses and recycles products instead of dumping them in landfills, we will need this infrastructure to support it.
However, we should not make the mistake of thinking that this process will cause so much as an impact on oil demand. Chevron wants to promote “renewable gasoline” not because it reduces crude oil consumption, but because it hopes it can provide a bulwark against the cleaner, cheaper, and more disruptive threat posed by electric vehicles. For centuries, we’ve used waste fats to make consumer goods like soap, moisturizers, and makeup. Like all these products, the impact on oil demand of the increase in used cooking oil will be largely cosmetic.
(David Fickling is a Bloomberg Opinion columnist covering energy and commodities. He previously worked for Bloomberg News, the Wall Street Journal and the Financial Times.)
