(Yicai Global) Oct.27 -- Renowned for its fried dumplings, egg rolls, fried wontons and other culinary classics, China is the world's largest consumer of cooking oil. It also generates the most waste oil—millions of tons every year. Although it is illegal, some unscrupulous entrepreneurs filter the waste oil from restaurant fryers, sewer drains, grease traps and other sources, then sell it to street vendors and small restaurants for re-use. This "gutter oil," as it is called, does not meet the standards of regular cooking oil, and it contains carcinogens and other elements that can cause severe illness. But it has one definite advantage: It is cheaper than the real thing.
Shutong Liu founded his company, MotionECO, to fight this problem by offering a better way to use recycled cooking oil. You could say that his story began back in 2011, when he was a student in the Netherlands. That year, KLM Royal Dutch Airlines made its first flight from Amsterdam to Paris using bio-kerosene produced by biojet fuel specialist SkyNRG. Shutong was so impressed that he went to work for SkyNRG while completing his master's thesis, "The Potential of Biofuel and Waste in China."
"When I saw that in Europe, there was already a sophisticated way to make biofuel from waste cooking oil and then use it in sustainable public transportation, I couldn't help but wonder, 'Why can't we do that in China?'" said Shutong.
The advantages are clear: The fuel produced from waste can help reduce greenhouse gas emissions by as much as 90 percent while also dramatically cutting the particle pollution, sulfur dioxide and other pollutants in exhausts. And biofuels are often more attractive than solar power or other forms of clean energy, given that little or no additional investment is needed to upgrade traditional engines. Finally, in what could only be called a win-win, the process also provides a safer and more reliable way to dispose of waste cooking oil.
Shutong concluded that there was a potential market in China, and in March 2015, following his return home, he founded MotionECO. The next year, his company was selected as the finalist from China in Chivas's "The Venture," an international contest that rewards social entrepreneurs who are using their business as a force for good.
Shutong has discovered that one of his biggest challenges is the efficient recovery of used cooking oil. There is no system in place yet, so someone who sells to a legitimate waste-oil recycler today may sell to a gutter-oil producer tomorrow. In order to attract loyal and reliable suppliers, MotionECO has set up a public, transparent and traceable process from production to sales. This appeals to chain restaurants, which are reluctant to risk their reputation by selling waste oil to illegal sources. It also a plus with some large firms, which consider consumer goodwill and sustainability issues along with economic benefits when establishing company policies.
Another big hurdle is price. Gutter oil sells for more than biofuel, so gutter-oil producers can buy waste cooking oil at a higher price than legitimate recyclers can. The fact that gutter oil is illegal is often of little consequence to waste-oil sellers, especially small and medium-sized enterprises with thin margins. "Our team and our partners have to be patient," said Shutong. "Food safety is critical to everyone."
The general climate is improving though, now that the Chinese government is cracking down on gutter oil. It has notably established a food traceability system and has pushed restaurants to monitor more closely the safe disposal of their used cooking oil. Meanwhile, MotionECO has introduced a "safe-oil league" that vets and certifies members, a move that it hopes will increase its supplies and foster good relationships with restaurants.
MotionECO currently sources the majority of its waste cooking oil from the Sichuan-Chongqing area in western China and from the mouths of the Yangtze River and the Pearl River. Shutong has visited some of the filthiest waste cooking oil collection sites in China to learn how they operate. He joked that he can tell where waste oil comes from just by looking at the color: In the Sichuan-Chongqing area, it is is typically red like the area's spicy hotpot; near the mouth of the Yangtze River, it is usually dark because locals there favor soy sauce and other seasonings.
As awareness of the advantages of the recycling economy increases across the country, Shutong has started to collaborate with local governments. MotionECO's partnership agreement with the city of Nanjing, for example, kicks off at the end of 2017. In this first phase of the project, named Green Oilfield, city buses and sightseeing coaches will be powered by biofuel made from local waste cooking oil.
MotionECO now has 5 employees and is on track to reach a turnover of 3 million CNY (US$ 457,000) this year. Yet Shutong said he has no specific timeline for his company's development. His patience seems to be matched only by his determination, reflecting his strong belief in the importance of his crusade. As he told the audience at a recent TED talk in Suzhou: "We will continue to promote the development of biofuel in China through the recycling of gutter oil, turning one of society's big problems into the solution to another one."