The planned plant in Johor Bahru, Malaysia, near Singapore, will be able to produce 350,000 tonnes of low-carbon transportation fuel a year from used cooking oil and waste water from palm-oil mills. The plant is expected to take about two years to complete.

Siu declined to divulge the estimated investment, but said the plant is expected to cost substantially less than the US$400 million Ecoceres has raised from private-equity firm Bain Capital, which bought a stake in the company this month.

Ecoceres will use the balance to develop other new businesses, such as converting agricultural waste into green ethanol motor fuel. It has two pilot projects for that purpose in China’s Hebei province.

The company, which is already profitable, also raised US$108 million from a stake sale to private-equity firm Kerogen Capital a year ago.

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Ecoceres’ waste-oil processing plant in Zhangjiagang, Jiangsu province, can produce 100,000 tonnes of low-carbon aviation fuel and 200,000 tonnes of renewable diesel fuel a year.

It started commercial operation in early 2021, and is currently producing around 1,000 tonnes of green fuels and raking in over US$2 million in revenue per day, Siu said. All of its production goes to the European market.

The European Council last June agreed to set a target to cut the transport sector’s greenhouse-gas intensity, a measure of emissions per unit of distance travelled, by 13 per cent by 2030.

Member states can alternatively set a target of at least 29 per cent renewable energy within final energy consumption in transport, up from a 14 per cent requirement enforced since 2018.

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Biodiesel derived from used cooking oil can cut greenhouse-gas emissions by 79 to 86 per cent compared with petroleum diesel, according to a US Argonne National Laboratory research paper published in the journal Environmental Science & Technology last May.

Renewable biodiesel, made in refineries at high temperature and pressure in the presence of a catalyst, has exactly the same chemical properties as petroleum diesel and can be used in 100 per cent concentration in engines.

This contrasts with a 20 per cent maximum concentration for conventional biodiesel, which is produced by reacting oil with methanol. This gives renewable biodiesel a price premium.

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Towngas’s alternative energy and chemicals business unit, Eco Environmental Investments, spun Ecoceres off into a separately managed company in early 2021. Its origins stretch back another 12 years.

“Back in 2009, [Towngas] started to develop a technology-driven new energy business by building a research-and-development team that collaborated with universities in China,” said Siu. “The strategy was to process low-value biomass wastes to produce high-value sustainable fuel and chemicals.”

The availability of raw materials and logistics are the key constraints on production volume for renewable biodiesel, said the 37-year Towngas veteran, formerly the chief operating officer of Eco before the spin-off.

“The most challenging part includes collection and delivery of feedstock,” Siu said. “As biodiesel production capacity increases, there will be scarcity of resources. Having the technology to process even low-quality feedstock with high impurities has enhanced our competitiveness.”