Neutral Fuels to expand in Australia

Neutral Fuels, a Dubai-based company that recycles used cooking oil into biodiesel, is expanding its operations to Australia, and plans to break into further markets next year.

The company feeds its biodiesel plants with oil used by McDonalds, and returns it as fuel for the fast-food chain's truck fleet. After a first plant was launched in Dubai last year, Neutral Fuels has agreed to extent the partnership with the restaurant to the Australian state of Victoria, where it has built a similar plant near Melbourne.

"We're working with McDonalds on the biodiesel programme and they've asked us to do Melbourne as their next step," said Karl Feilder, Neutral Fuels' chief executive.

So far, the Melbourne plant processes spent oil from over 100 outlets. McDonalds remaining 105 restaurants in Victoria will follow suit early next year. The fast food retailer wants all of the around 1,000 restaurants in Australia to be integrated into the programme by the end of 2013.

Neutral Fuels expansion into Australia was assisted by Victoria's government, which keeps an office in Dubai to attract investment into the state.

McDonalds and Neutral Fuels want to extend the biodiesel programme to other countries in Asia Pacific, Middle East and Africa. Mr Feilder says he is in discussion with four governments in those regions, and hopes to set up the programme in two more countries next year.

The Dubai biodiesel plant, set up in August last year, has recently had its capacity doubled to 1.5 million litres a year as the partnership picked up steam in the UAE. The Melbourne plant has an initial capacity of 1.5m litres per year, which will be upgraded to 6m litres as more restaurants are tapped.

In the UAE, McDonalds benefitted from a supply of diesel that is cheaper even than the subsidised fossil fuel sold at the pump. In Australia, where fuel is not subsidised, the savings will be even greater.

"Economically it works well for all parties concerned. It shows that being green doesn't cost the earth," said Mr Feilder.

After the needs of McDonald's truck fleet are met, Neutral Fuels is free to sell surplus biodiesel to other buyers, which it has already started doing in the UAE.

The fuel provider is a subsidiary of the Neutral Group, which advises companies on energy efficiency.