Issue 4, 2017. August-September

   

LIQUID GOLD: A NEW LIFE FOR GEORGIA'S COOKING OIL

An Irish drilling expert has overcome obstacles in local mentality and the market to create a niche for recycling used cooking oil.

Inge Snip

Every day, a small minivan cruises through Tbilisi from restaurant to restaurant, hotel to hotel. Filled with large metal containers, the driver has to be careful not to make any sudden movements, or he risks spilling the valuable load he transports: old cooking oil.

The minivan is part of Jeffrey Kent's new venture: collecting old cooking oil, cleaning it, and sending it to Europe to have it repurposed as biofuels.

Kent, an Irish drilling expert, moved to the Caucasus over 10 years ago after having worked in Australia, Indonesia and Romania, to drill at the Marneuli gold mine in southern Georgia. He currently owns a drilling company called Well 3 Drilling.

Six years ago, a friend from Ireland told him how he was collecting old cooking oil to have it repurposed as biofuels by companies such as Shell and BP. In the EU, 5.75 percent of all fuels need to come from a renewable source, otherwise additional taxes need to be paid.

"Old cooking oil is valuable now," Kent tells Investor.ge, "and it could be collected like the jarti [Georgian for scrap metal] guys collect scrap metal, but it wasn't happening in Georgia."

More than Profits

However, the possible profits that could be reaped from starting a grease collection business were not the reason Kent and his Georgian business partner decided to start it. In Georgia, Kent tells Investor.ge, the old cooking oil-which is mainly from cooking fried chicken and bacon-is sold to farmers who come by the restaurants and hotels. These farmers then use the old cooking oil, mixing it with ground corn, to feed it to their livestock.

"It's like animal cannibalism," Kent says, seemingly disgusted. And it not only feels unethical to feed chickens with chickens, and pigs with pigs, but it is also quite dangerous, he adds.

When animals eat the remains of their own species, prion diseases, a group of uncommon and deadly brain diseases, can be spread quickly. These prion diseases, such as bovine spongiform encephalopathy (BSE)-also called Mad Cow disease-can be transmitted to humans as well.

The European Union banned the use of animal by-products in animal feed after the outbreak of BSE in 1994. The U.S. implemented a similar feed ban in 1997. An outbreak of a different disease, the so-called Foot and Mouth Disease (FMD), led to tighter regulations in 2008, even though this virus is rarely passed to humans.

Georgia, however, has no regulations in place on the contents of animal feed. "The Ministry of Health is more occupied with making sure kids wash their hands," a disappointed Kent says about the attempts he and his business partners have made to try change the regulations.

And convincing restaurants and hotels to sell their old cooking oil to him instead of to farmers, even after explaining the dangers of selling to the latter, was not easy either.

Three Years of Negotiations

It took Kent three years to get the first container ready, as the only ones wanting to join were those with international management, well aware of the issue, such as the Radisson and the Sheraton.

In addition to the lack of education about the dangers of using used cooking oil in animal feed, farmers pay more for the product: Kent can offer businesses 20 tetri per liter, while the farmers pay 50 tetri per liter.

Kent detailed the trouble he had interesting local restaurants, noting, however that McDonald's recently joined his initiative, after Kent was able to speak to the general manager.

Exported to the EU

Kent's's company, oillio, is fully certified and his oils are thoroughly tested. After their employee collects oil, it is filtered, leaving a greasy residue of fries, chicken, bacon and other foods. The residue is sold as well to the EU, where companies use it to make soaps.

Unfortunately, producing biofuels from the old cooking oil in Georgia itself is almost impossible, Kent tells Investor.ge.

"Not only is there too little old cooking oil, but the government taxes biofuels the same as regular fuels, making it too expensive," Kent says, adding that it could only work if biofuels would fall under some sort of exception.

"The legislation has to change," he added.

But this hasn't stopped Kent, who just as easily ships and sells it to Europe. And recently he also opened an Armenian office with a former Australian co-worker from the drilling industry and a local Armenian, expanding the oil collection business beyond Georgia's borders.

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