Page 9 - MEOG Week 03 2023

MEOG POLICY & SECURITY MEOG

MoU signed for Saudi SAF alliance

SAUDI ARABIA THE Saudi Investment Recycling Co. (SIRC) etc.) as well as imported feedstocks like UCO. It
signed a memorandum of understanding (MoU) is also clear that some projects will continue rely-
last week with Saudi Aramco and TotalEnergies ing on vegetable oils like rapeseed or soy.”
to create a joint body focused on sustainable avi- According to an August note by consultancy
ation fuels (SAF). Wood Mackenzie, “developing new technologies
According to a statement issued by SIRC on that drive biofuel production from municipal
LinkedIn, the companies aim “to establish an waste, agricultural residue and recycling plastics
alliance aimed at recycling used cooking oils wastes could be a game changer for the energy
to produce aviation fuel, which is expected to transition”.
support the concept of Circular Economy and It estimates that this could provide an addi-
aspires to help protect the environment.” tional 20mn barrels per day of liquid biofuels by
It added: “The main objective of the MoU is 2050, thus catering to around 25% of “all future
to meet the growing demand for renewable and liquid fuel demand (95mn bpd in 2050), equiv-
sustainable fuels, and reduce emissions.” alent to around three quarters of 2050 middle
The deal comes as an increasing number of oil distillate demand”.
companies consider investments in waste-based The new wave of investments comes as
conversion plants as part of efforts to decarbon- the European Union increases its scrutiny on
ise their operations, thereby creating a new wave the food vs fuel debate, trimming back dou-
of biofuel developments. The majority of these ble-counting opportunities for non-waste bio-
bio-refineries will be dedicated to the hydro- fuel feedstocks, including those derived from
treatment of used cooking oil (UCO), tallow and crops that are widely used to generate fatty acid
other waste products to produce hydrotreated methyl ester (FAME) biodiesel.
vegetable oil (HVO, biodiesel), or SAF. However, feedstock in the Middle East is lim-
The number of standalone facilities is grow- ited and the economics of importing certifiably
ing, driven in particular by European appetite for ‘waste’ UCO from Southeast Asia provides a reg-
lower-carbon fuels, while demand for advanced ulatory and economic challenge to the feasibility
biofuels presents an opportunity to extend the of many projects considered in the region. While
life of hydrotreatment units at underperforming SIRC’s statement did not elaborate on the poten-
refineries. tial sources of feedstock, Middle Eastern cooking
A briefing released last week by Transport methods do not typically leave enough UCO for
& Environment showed that investments by local ‘production’ to provide enough feed for any
European majors in biofuels will be eight times investment.
greater than their spend on hydrogen. It said Wood Mackenzie vice president Alan Gelder
that “investments in HVO will double the refin- said: “Many governments have understandably
ing capacity, resulting in a total capacity that is pulled away from using food-based biofuels,
4 times higher than the amount of used cook- which has hampered the industry’s growth.
ing oil and animal fats that can be sustainably However, there still is plenty of opportunity for
sourced in the EU. growth, especially when we look at waste-based
Based on T&E data, this will likely lead to alternatives. For some areas of the transport sec-
a reliance on feedstocks already being used by tor, such as air travel, there is little alternative to
other industries (e.g. tall oil, animal fats cat. III, liquid fuel, making decarbonising difficult.”™

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