Biodiesel companies want stricter regulation on waste oil

Last month's scandal over sales of tainted lard from Taiwan has been a source of bitter satisfaction for Hong Kong's handful of biodiesel producers. It's helped shine a spotlight on a warped market that encourages restaurants and catering operations to sell used cooking oil at higher prices to unscrupulous dealers, only to have it return to local kitchens in the form of lard or other oil and fat mixed with "gutter oil".

The choice is obvious when recyclers are offering commercial kitchens as much as HK$91 for a 15 kilogram barrel of used cooking oil, says Steve Choi Sau-yim, executive director of biodiesel company Dynamic Progress International.

At those prices, no one could run a viable recycling business turning used oil into biodiesel and soap, Choi says; the only way recyclers would be able make money was if the used oil was sold as a commodity for human consumption.

"In the past, the price of used oil corresponded with that of diesel. But later, it became pegged to the price of cooking oil. It's a bizarre situation."

This is a marked deterioration from 2009, when Dynamic Progress opened its HK$70 million plant in Tuen Mun, he says.

Hong Kong has a plethora of restaurants generating used oil and grease. In the past, this was often simply poured into drains, and the Drainage Services Department used to spend tens of millions of dollars every year to clear blocked drains.