Dubai investors to set up biofuel plant

NEW PLANT: Proposals have been announced for the first purpose built commercial biodiesel production facility in the GCC. (Getty Images)

Bulldozers and lorries fuelled by biodiesel could become a common sight on construction sites and roads in the UAE if a new venture to produce the renewable fuel proves successful.

Proposals were announced in Dubai on Sunday for the first purpose built commercial biodiesel production facility in the GCC to be based in the UAE, which would be capable of producing around 3 million gallons of biodiesel per annum when the plant begins production in the first quarter of 2009.

Contractors and hauliers are expected to be among the first customers for the green fuel that has virtually the same properties as petroleum diesel but is both clean burning and renewable as well as being competitively priced.

Behind the venture is Dubai-based Ecobility Energy Solutions with the project funded through a shareholder scheme of which venture capital fund Alf Yad Limited LCC, also based in the emirate, will act as majority shareholder.  Daman Investments is manager of the project’s fund.

All parties refused to say how much was being invested in the initiative, known as EmBio, claiming it could compromise the competitive edge of the venture at an early stage.

The use of biodiesel has been blamed for pushing up global food prices by diverting edible crops towards industrial uses, but Ecobility said its fuel would be sourced from inedible oils.

“We hope this will be just a stepping stone towards a larger sustainability sector in the UAE and the region,” said Karim Aly, managing partner of Ecobility.

“We will be looking at marketing production levels towards full scale heavy diesel users like contractors who want to enhance their sustainability credentials by using biodiesel to power their diesel-fuelled equipment like tractors, trucks and bulldozers and logistics companies who have large diesel-fuelled fleets.”

Nadimeh Mehra, chief operating officer of Alf Yad, accepted there was an element of risk to funding the initiative but said it was “low.”

She said Alf Yad only funded projects which would provide at least a 30 percent annual return for shareholders.

“Aside the fact that the return will be amazing for investors it really will be an initiative that will combat global warming and reduce companies carbon footprint and that is something that is a bonus, said Mehra.

“This is clearly one of the fastest growing alternative energy sectors and the UAE is very well positioned to take advantage of this trend due to a number of local factors including strong economic growth, large carbon footprint per capita, increasing federal support and the recent introduction of several ambitious sustainability plans.”

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