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Memorandum submitted by Living Fuels Ltd (FBEN 12)
Living Fuels Ltd and LF100 Living
Fuels Ltd is a British renewable energy company based in
Through Living Fuels, the company specialises in recovering the waste product from used cooking oils (UCO) into a fuel grade product - LF100. UCOs are an extremely common waste product as they are produced in food manufacturing by catering firms and private individuals on a daily basis. Unlike other common household and catering wastes, UCO must be disposed of in a regulated way. It cannot simply be poured away as it clogs up drains and sewers. Previously this was often dumped in landfill sites but Landfill Directives have now prevented this.
Living Fuels has developed a unique recovery process, relying solely on gravity separation and filtration, to purify UCO into a distinct product. Previously, UCO has traditionally only been used in transport biofuels, with the addition of chemicals and catalysts. In contrast, Living Fuels' process to turn UCO into a fuel product is achieved without the need of additional chemicals. Thus, when LF100 is burnt to generate power, it results in a significantly improved carbon savings.
Executive Summary Energy
recovered from used cooking oils (UCOs) has the potential to become a productive
renewable energy industry and feed into the
Purified UCO which has been recovered into a fuel product could feed into the electricity grid. However, despite the clear environmental benefits of recovering waste materials to generate clean electricity, there is regulatory uncertainty around whether these products should be classified as fuel products or continue to be designated as waste. A decision on this is important as if it continues to be classified as waste, energy projects using UCO would be subject to excessive financial penalties which would cripple the industry.
The government must therefore review the regulatory environment for this industry to determine whether it is appropriate. In addition, although these fuel products should be dealt with on a case by case basis, the government should also issue guidance on utilising used cooking oil for static fuel applications to assist the Environment Agency in making these decisions. This principle was also set out in the Court of Appeal July 2007 judgment in OSS Group Ltd v Environment Agency, where Lord Justice Carnwath encouraged DEFRA and the Environment Agency to join forces in producing practical guidance for those affected.
Britain's Electricity Networks Living
Fuels noted with interest that this inquiry will look at how
Ø What should the Government's vision be for
1) The
EU has committed to binding targets that 20% of energy by 2020 will come from
renewable sources. In order to meet this target, for its contribution, the
2) It is widely recognised that in pursuit of this target, there is a tendency to rely too heavily on traditional renewable sources such as wind or solar power. As part of the REG Group, we recognise and advocate the benefits of wind-power. However, Living Fuels believes that the focus on these two sources of renewable has, at times, obscured a proper analysis of the possibilities offered by other renewable sources to contribute to these targets and feed into the national electricity grid.
3) Thus, greater emphasis is needed on diversifying the UK's energy supply as widely as possible and exploiting alternative renewable sources such as energy from UCO, which although may be smaller contributors to renewable feedstock, have the potential to guarantee a contribution with lower up-front costs than wind turbine or solar energy projects.
4) Energy
derived from biomass and waste products are widely understood as having an
immense potential to assist the
5) Utilizing UCO for energy generation also has additional environmental benefits. Every year, South West Water reports that the equivalent volume of 21 double-decker buses of used oils is removed from the region's sewers, costing customers over £1.5 million annually. This could be used to generate electricity. Thames Water has also reported that over 1,000 tonnes of liquid fat is swilled into Thames Water's sewers every year, much of it from commercial outlets serving hot food. Below ground it cools, hardens and causes over 50,000 blockages that can lead to sewage flooding into homes, gardens and watercourses.
6) LF100 has the potential to supply electricity plants which range from small scale 150KWe installations right up to Multi-Megawatt Power stations. Typically these plants feed into the 11KV distribution network close to the point of demand. LF100 thus has the potential to be used in 'distributed generation' which has been rated as highly desirable by the government and grid operators.
7) LF100 is a highly flexible fuel; enabling plant to be highly scalable, highly dispatchable and readily converted to combined heat and power configurations. This offers major advantages in local grid stability and can further boost carbon savings.
8) An additional example of this flexibility is Living Fuels' ability to enable UCO to be recovered into fuel products on site in major catering and food processing plants. The fuel can then used to produce heat and power for onsite use, reducing energy demand and minimising waste being disposed offsite.
9) In
order to guarantee meeting the
10) This has been done for the conversion of UCO into biodiesel as the use of UCO in transportation has been promoted as a viable sustainable energy source. However, the same has not happened for the conversion of UCO into electricity.
11) Power generation derived from UCO is not to be confused with biodiesel as the LF100 process generates power, or electricity, in static generators and produces minimal waste and consumes very little energy. When considering the pathway from the raw material to generating power, more useful energy is captured. As a result, it is a more efficient and less polluting process.
12) Under the terms of the Waste Incineration Directive UCOs are classified as waste and not raw materials, even though they have the potential to be used as such. In 2007 the Environment Agency issued a regulatory position statement clarifying that UCO remains a waste until it is burnt, meaning UCO remains to be waste until after it has been used to generate electricity. As a result, the process must comply with the regulatory and financial penalties associated with burning waste under the Directive.
13) The cost and time implications of meeting these requirements are not only in excess of the environmental impact of burning UCO but also cripple the viability of any projects to recycle UCO in order to generate clean electricity.
14) This position is supported later in 2007 by a Court of Appeal ruling in the OSS Group vs. Environment Agency case which stated that lubricating oil which was collected after use and processed into a fuel product for burning could cease to be a waste before it was burnt. This was based on a judgement that a waste material could be reclassified as a non-waste product provided that it fulfilled two criteria: i) It must have been converted into a distinct product which can be marketed on its own terms. ii) It must be used in exactly the same way and without causing any greater environmental harm than an equivalent raw material.
15) The Environment Agency is now tasked with looking at products submitted to them on a case by case basis in order to determine whether that product has ceased to be waste. However, despite this legal precedent the Environment Agency has failed to take the appropriate steps to re-instate this judgment and help encourage this renewable technology to contribute towards the 2020 renewable targets.
16) In particular, although the Court of Appeal judgment encouraged DEFRA and the Environment Agency to produce practical guidance for UCO to be classified as a raw material and be used to generate electricity without incurring excessive financial penalties, a draft protocol on the 'end of waste' cases for UCO has not been forthcoming.
17) In a recent parliamentary answer on the 2nd March 2009 the government did state that DEFRA has made funding available to enable the Environment Agency to develop an end-of-waste protocol for waste cooking oil. However, this protocol only applies to biodiesel for transport use and not for static energy generation.
18) Without the provision of a
draft protocol, companies are being prevented from developing any renewable
energy projects using UCO due to the prohibitive duties. The consistent
interpretation of the waste directives has severely hampered the development of
a productive industry that could assist and improve the future of
Recommendations In order for the UCO to energy industry to be able to contribute to the 2020 renewable targets the government should:
Ø ensure that the fiscal regime is appropriate for combined power and heat generation from waste products.
Ø ensure that guidance is issued which supports development of the combined power and heat generation from waste products industry.
March 2009 |