Generation Start-up: UAE's Homegrown Biofuels Firm to Expand to India and Bahrain

(The National Business) Neutral Fuels powers the entirety of McDonald's fleet in the emirates -- ... Mr (Karl) Feilder is behind the UAE’s first homegrown initiative to turn waste cooking oil into biofuel, on which the entirety of the country’s fleet of McDonald’s vehicles runs.

Entirely self-funded, the company was grown when Mr Feilder, who has already sold five companies and taken two public was being consulted by the Dubai Economic Department in 2009 to look at ways to lower the carbon footprint of the emirate’s logistics sector.

Mr Feilder was also pressed to look into some of sort alternative fuel strategy for the transportation sector as part of his study. He went back to the department a year later saying biofuel was “the easiest” and "most readily acceptable alternative” particularly if manufactured from waste oil already available in the UAE.

When asked how that could be possibly done, he said he was going to build it himself.

With some background in understanding how biofuel was made in Europe, Mr Feilder fine-tuned the technology to work in the Middle East.

With McDonald’s as a partner, Mr Feilder brought on the fast food chain’s supply chain partners such as Del Monte to run on biofuel as well, eventually clocking up five million kilometres within five years of being in business.

By the end of the year, Neutral Fuels would’ve branched out to India as well as Bahrain, with two more locations to be added in the UAE.

The company has also successfully launched a bond on the Frankfurt Stock Exchange raising "a substantial quantity of money”, says Mr Feilder, without disclosing the amount, as the instrument is subject to strict regulation.

However, he says there was healthy investor appetite globally to invest in a sector, and in a region that was rather interesting.

Mr Feilder plans to take the company public in 2024, with London targeted for an initial public offering.

Like other startups in the UAE, Neutral Fuels also tried crowdfunding as an option five years since it started but realised quickly that it was not a suitable financial model.

"Our average is between 93 and 94 per cent yield. So for a 1000 litres of biodiesel we need 930 litres of cooking oil. In Europe they’re averaging around 70 per cent yield,” he adds.

The difference being large-scale production of biofuel relies on aggregators, sourcing feedstock from multiple sources, which could be animal waste, ground-up chicken or even chicken feathers as long as the material contains oil. The off takers for such large-scale production in Europe are the oil majors who then blend it in a refinery and distribute it themselves.

Neutral Fuels on the other hand relies on direct sourcing from restaurants and hotels, with distribution made directly back to those sources.

“So there are no intermediaries on either side of our supply chain, so this means we can be more sustainable long-term, we can make a profit and we can continue to replicate this model,” says Mr Feilder.

“Our own strategy says that we can build 50 of these facilities, around the region. Any city that has more than a million people will have sufficient supply of waste and sufficient off take of the biofuel,” he says. READ MORE