China turning cooking oil to biofuels

While China reaches ever further overseas to secure energy supplies, some Chinese businesses at home are coming up with increasingly creative ways of tapping into new energy sources. Take the story of one small company in Fujian province that has captured a local niche market: collecting waste oil from restaurants and factories and turning it into biodiesel and chemicals that can be sold at a handsome profit.

The five-year-old biodiesel business of China Clean Energy has got a big boost from the government’s vows to cut carbon emissions. According to its chief financial officer, William Chen, the New York-listed company has seen its revenues quadruple this year compared with 2009.

“Recently there was a government policy that requires power generators to reduce emissions, so some of the power generation plants have started shifting their regular petroleum diesel to biodiesel,” explains Chen.

In the past quarter China Clean Energy has signed up no less than seven new thermal power plants to use its biofuel, each of which has placed orders worth at least Rmb 1m.

These thermal power plants previously used regular diesel to help the coal burn at higher temperatures, but Chen says biodiesel burns much more cleanly.

It’s also cheaper. Biodiesel made from waste oil costs about Rmb 4,000 per tonne, compared with a market price of Rmb 4,648 per tonne, Chen says. Some of their biodiesel is also sold at gas stations at a price per calorie that is on a par with diesel.

The company also uses the oils it collects to make specialty chemical products that go into products like detergent, high-grade glues, printing ink for glossy magazines, and anti-rust coatings on ships. The chemicals part of the business currently generates most of its revenue, but that could change as demand for biodiesel grows.


The popularity of biodiesel has meant that even leftover cooking oil, which was once considered waste, is now a hot commodity. A few years ago restaurants would give away their waste oils for free or even pay collectors to take it away, Chen says. “But now waste oil acts like a commodity because everyone wants to buy it.”