Bio-fuels Alternative To Diesel

[Sing_Sling]

Well, the business model has finally taken shape and we're about to start our seminars and leaflet drops to the petrol stations around certain parts of Isaan.

By the end of this month we can have about 1million litres of PME (Palm Methyl Esther) refined to government specs ready to ship.

Our strategy has been to look at

1) Chayaphum

2) Udon

3) Khon Khaen

4) Looi

in that order, simply because of the distances from our refinery near Bangkok. The reason we are looking at this area is because a lot of the agricultural products come this way and trucks use diesel, lots of farmers using diesel and the cost of diesel is expensive now.

We'll be able to sell the PME to petrol stations for about 26baht and ask them to sell it below the diesel price, which is anywhere around 27.2+ at the moment.

Of course we've done our research, but I'd be interested to hear from non-Thais as to the chioice of first strategy targets and if the average diesel drivers, which is not really the main market, would switch to PME if it's cheaper and better for the environment.

I'm not promoting our stuff, therefore no names or anything like that, I'm just after some feedback.

Cheers

(I'll post this in the Business Forum as well, as it straddles Isaan and Business - if this is annoying or incorrect, please mods delete one or the other)

[farangnoi]

2 questions, are the Thai farmers interested? and not sceptical about bio-fuel?

Even in the western world people are sceptic or better to say "trow backing oil in you car, it's better for the evirmont, and a lot cheaper ??, How about my engine"

Other question, diesel powered generators (like household-engine kind) are the runing on bio-fuel aswell (sound interesting to me)

Few years back my budy in me, put a few gallon in a Land-rover 88 light weight, and it was working perfectly, even under heavy duty off roading.

Okay, it smelled like a fish and chips car, but it worked perfectly, untill the bearings run out, not because the palm oil, but because if the moteroil.

keep me posted, it's a very interesting topic

[Sing_Sling]

Middag farangnoi,

Thanks for your reply - - - I guess bio-fuel being promoted by the government helps and the seminars we intend to hold will go some way. We won't be trying to sell our stuff to the faremrs by appealing to their environmental conscience, rather their wallet - the environmental education will come as a by-product, so to speak.

In Europe there are stil sceptics, but almost all the vehicle manufacturing comoanies have given out lists of their cars that accept bio-fuels - and Europeans have been usingt he stuff for almost 30 years - but it did smell like a fritjes shop. We're pretty much the first to sell palm based bio-fuel to Europe simply because the EuroNorms specify a density which palmoil cannot conform to at a certain temperature, but the specs were written for Rapeseed - rapsoel. Now many of the customers are becoming less selkective as the price of bio-fuels in Europe is almost the same as fossil fuel as rapeseed oil is expensive due to givernment subsidies and re-used cooking oil is in short supply.

We'll see if it works in the long run, be we hope so.

Anything that runs on diesel can run on bio-fuels (just ensure that it is correctly refined) - that's why the diesel engone was invented by a guy called Diesel.

Cheers

2 questions, are the Thai farmers interested? and not sceptical about bio-fuel?

Even in the western world people are sceptic or better to say "trow backing oil in you car, it's better for the evirmont, and a lot cheaper ??, How about my engine"

Other question, diesel powered generators (like household-engine kind) are the runing on bio-fuel aswell (sound interesting to me)

Few years back my budy in me, put a few gallon in a Land-rover 88 light weight, and it was working perfectly, even under heavy duty off roading.

Okay, it smelled like a fish and chips car, but it worked perfectly, untill the bearings run out, not because the palm oil, but because if the moteroil.

keep me posted, it's a very interesting topic

[farangnoi]

I rembered, that in the telegraaf ( dutch newspaper) there was a guy who went every 2 weeks to ALBERT H. ( is/ was Tops "" in Thailand) bought ther 30 ltrs of cooking-oil and ...Yep, put it in his car with no problem. It went okay untill the he made the newspaper, and ofcourse the Dutch IRS, and was arned to stop his activities or face charges, because, is not paying duties

[Sing_Sling]

That's happened so often - when I was working in Hollnd the Albert Heijn had to stop selling the big jugs of oil as it was much cheaper than diesel . . . totally ridiculous. The same happened in Germany with Aldi having to stop selling any oils in 10litre or larger jugs.

European governments have been subsidising rapeseed growing to such an extent that they no longer can afford to and these subsidies will be severely curtailed on August 1.

In Thailand there really is no push from anyone to bring bio-fuels to market - imagine if even only public transport used bio-fules what an impact that would have on air quality. Images of those busses spewing that black crap out intot he atnosphere is frightening.

[kenk3z]

Since your refinery is close to Bangkok, why don't you sell your product to the Bangkok market?

I understand plenty of vehicles in and around Bangkok use diesel fuel, including small cars and trucks.

The original diesel engine was invented to run on peanut oil. There's some difference in compatibility between the "indirect injection (IDI)" older diesels and the newest "common-rail" engines. The older diesels will still burn the vegatable oil and properly prepared biodiesel with no problem. If refined well enough I think the common-rail cars will probably run biodiesel OK too.

When diesel supplies run short the next best thing is soy oil or some other veg oil from the market. This was done in the Katrina hurricane disaster area in the US.

Is palm oil derived from the whole plant or just the coconut?

kenk3z

[dugdale]

I'm no expert on this subject at all however is the costing right ?

You plan to sell at about 26 Baht a litre and request the petrol stations to sell it at less than Diesel which is about 27.2 Baht a litre.

My initial thoughts are for this fuel to be attractive and to sell in a reasonable quantity it needs to be at least 1 baht per litre cheaper than diesel i.e. 26.2 Baht a litre. That equates to 20 satang per litre profit for the petrol station. What profit margin do they currently get per litre of diesel ? If it is more than 20 satang per litre why should they go to the trouble of selling your product when they are infact reducing their profit ?

I'm not wishing to knock your product just interested in your pricing policy.

Dugdale

[Leonid]

I'm no expert on this subject at all however is the costing right ?

You plan to sell at about 26 Baht a litre and request the petrol stations to sell it at less than Diesel which is about 27.2 Baht a litre.

My initial thoughts are for this fuel to be attractive and to sell in a reasonable quantity it needs to be at least 1 baht per litre cheaper than diesel i.e. 26.2 Baht a litre. That equates to 20 satang per litre profit for the petrol station. What profit margin do they currently get per litre of diesel ? If it is more than 20 satang per litre why should they go to the trouble of selling your product when they are infact reducing their profit ?

I'm not wishing to knock your product just interested in your pricing policy.

Dugdale

i agree with dug - I just wanted to ask what is price for 1 liter of normal diesel. Despite pricing, marketing and possible advertising on that. there should be a good explanation to ordinary people.

If this tested by local authorites they should give appropriate name, like eco-diesel or something like that.

BUT IT IS GREAT, that you started!!! please send me details in PM, i involved in that field for quite long.

p.s. there a should be a renewables exhibitions here at May and July

[Asian Frog]

Technical Question

What are the specifications of Bio Diesel? ( I want to compare with fuels used in aviation). I know in any case that it is nearly impossible to utilise in Aviation due to the very stringent and costly process of certification. It is just to see if we can foresee use of Bio Diesel one day in Aviation

Thank you

[Sing_Sling]

Excellent responses - thanks, guys.

All we can do is request the petrol stations to sell it at less than fossil fuel diesel, which should not be a problem as diesel is over 28 baht in some places, but it is up to the petrol station owners. Even if they sell PME at a lower price than diesel they will still make a higher profit as the oil companies ensure the profit stays with them - also, Thailand cannot refine enough diesel to meet demand - an excellent market opportunity in itself.

Also, when the profits come in we are thinking of opening up one bio-fuel station at time - - - that's another idea in the future, though.

Clearly Bangkok is a prime market, but our Thai partner is from Isaan and wants to support the local population and business with cheaper fuel. We actually make a higher profit sending it to Europe, but this is our/his way of 'giving' back, so to speak.

PME (palm methyl esther) is derived from the Oilpalm nut, the first stage of extraction has CPO (crude palm oil) as a result, the second stage results in RBD (refined, bleached, deodorised) and the third stage of refinement results in PME palm methyl esther, which is fine for most diesel engines - the few that don't accept bio-fuels are mostly among the older ones (10+).

I've attached the Thai government bio-fuel specs, which are a bit silly as they are simply a cut and paste of the EN and ASTM - not taking into account Thai weather, but we meet them anyway.

Aviation - no way at all. I'd even say never, simply due to the natural composition of bio-fuels.

BioDieThai_goverment_spec._48.pdf

[farangnoi]

Yesterday i was talking with a few cousins of the misses about this subject.

one of the cousins is songtew driver between Baan nong keang and Srisakat, i asked, if he ever had hearded about bio-fuel, his answer was prokpt no,no. Then I tried to explain it to him, in my best thaiglish and after he understood "cooking-oil in your gastank" He looked at me, with a face like, are you drunk already? My other cousin overhearded the converstation, and said "kh. Case talk bio-diesel chaimai? good good, you samart man!" and explained it to his/our other cousin. Who now looked at us, and probably thought, "they both drunk" He wasn't realy convinsed with the idea to put palm-oil in his car.

Here in srasaket are about 5 or 6 songtews maybe more, a large busstation, with busses going everywhere, trainstation. So I think there will be a market here aswell.

[Gary A]

Below is an interesting company. I also have a question. Since the bio diesel cleans your existing system of rust and other sediment are you worried that the product may put off consumers because it may clog their fuel filters? I have heard proponents advise users to add an extra filter until the whole system is cleaned up.

O2Diesel, Corp.: Company Report100 Commerce Drive

Suite 301

Newark DE 19713

Phone: (302) 266-6000 Fax: (302) 266-7076 http://www.o2diesel.com/

Industry : Business ServicesEmployees : 15Exchange : AMEX

O2Diesel Corporation (O2Diesel) is a development-stage company, which has developed an additive product designed to enable distillate liquid transportation fuels to burn cleaner by facilitating the addition of ethanol as an oxygenate to these fuels. As of December 31, 2004, the Company's operations continue to be primarily focused on performing product tests and demonstrations. O2Diesel's core product, O2D05, is a fuel additive that can be made from soybean oil, other vegetable oils or animal fats. The additive stabilizes and enhances the blending of fuel grade ethanol with diesel fuel. Blending O2D05 with ethanol and various grades of diesel fuel in turn creates a clean burning fuel called O2Diesel. In March 2004, the Company began operations in Brazil through its 75%-owned subsidiary, O2Diesel Químicos Ltda.

[Sing_Sling]

"...and explained it to his/our other cousin. Who now looked at us, and probably thought, "they both drunk"

I can imagine the reaction, probably quite similar to what you'd get in many parts of the world. Absolutely, bus depots and the like are prime candidates, bedankt farangnoi - high consumption and miserable air pollution. Seriously, in Bangkok last week we were stuck behind one of hese awful busses and we almost choked even though we were in a cab.

We've thought about using additives for the local market , but have found that the CPFF is fine for Thai weather conditions - as well we don't use them for our poducts to Europe as the customer can add them if he wishes. I have not heard about the filter clogging poblem through 'cleansing' , but I'll check up on it -it always amzes me that no matter how much research you do, there are always so many more issues that pop up . . . Thank for that, Gary.

I guess we've not had that problem, if it is one, as the cars in Europe are generally newer and therefore would have less rust an other contaminants.

[Carmine6]

Not to beat the subject to death, but I don't really understand your pricing. You're saying the stations can price below 27 or 28 baht when they're buying at 26 baht? Seems like a big risk taking a Diesel pump offline to sell Bio-Diesel when there's not really much profit in it.

Might be better to start them off with a high profit until people are ok with the fuel.

[Gary A]

If you Google biodiesel fuel filter clogging you will get hundreds of hits. Here is a good one.

Here is the link the below came from; http://www.npnrg.com/NPE/biodiesel.aspx

Biodiesel May Initially Result in Increased Fuel Filter Clogging

Biodiesel acts as a solvent and, just like using a concentrated fuel additive designed to clean fuel injectors, it will loosen deposits that may be built up along the walls of the fuel tank or fuel lines. Particles from these deposits will be trapped in the fuel filter, which may need to be changed after initial biodiesel use. Most deposits will be removed after just a few uses of biodiesel, and so more frequent fuel filter changes will not be an ongoing maintenance issue. Biodiesel concentrations of B5 or less will not result in any solvent issues. Concentrations of B20 or more may.

Many car buyers are making the switch from gasoline to diesel engines to experience the benefits of renewable biodiesel. For those who are perhaps otherwise unfamiliar with diesel engines, the prospect of changing fuel filters may seem to be a rather prohibitive requirement. In fact, diesel fuel filters are commonly changed during regularly scheduled maintenance (''oil changes'') performed on virtually all diesel engines. For this reason, diesel fuel filters are engineered to be made readily accessible as a spin-on component that is easily removed and replaced, unlike the more permanently installed fuel filter on a gasoline-fueled car. The diesel fuel filter can therefore be replaced by even the most unaccomplished ''mechanic.'' In most instances, these filters will be successfully replaced in five minutes time using nothing more than a filter wrench. [back to biodiesel precautions]

I'd really hate to see people turned off because of a GOOD problem. I can just hear my Thai neighbors;

"No good, dirty, make filter no good."

[Leonid]

I'd really hate to see people turned off because of a GOOD problem. I can just hear my Thai neighbors;

"No good, dirty, make filter no good."

Sing, did you run any tests on that kind, and what were results of that?

[Sing_Sling]

Not to beat the subject to death, but I don't really understand your pricing. You're saying the stations can price below 27 or 28 baht when they're buying at 26 baht? Seems like a big risk taking a Diesel pump offline to sell Bio-Diesel when there's not really much profit in it.

Might be better to start them off with a high profit until people are ok with the fuel.

Hi Carmine, thanks for getting into this. Petrol station owners make far less than we tend to think on the pump - somewhere in the vicinity of 10-20 stg - - - so we're hoping they'll opt for a higher profit while still keeping the price reasonable. There are a few ways of persuading them, but first it has to be seen as a profitable entry for them.

Gary and Leonid - we did do running tests in Europe - particularly Germany, France, Italy and the UK with diesel cars, tractors and trucks - no problems cropped up at all so far.

You definitely have a point as the trucks and farm machinery in Thailand are older and probably have more contaminants in the engine. As I'm not an engineer by any stretch of the imagination I have asked one of them to look into it.

Seriously, thank you for bringing these things to my attention - I will look at the ones I understand and pass on the ones that I can't.

I tend to live on the premise of :"A man's gotta know his limitations"

[Leonid]

call me when next test will be. first article for free, by engineer and without limit for you.

[Sing_Sling]

Thanks again for the feedback, I really do appreciate it. (might be a free tank of petrol in it for you if you drive a diesel )

[Sing_Sling]

call me when next test will be. first article by engineer and without limit for you.

спасибо Thanks very much, Leonid!