Where has London’s oil gone?

As the illegal use of "gutter oil" to cook food in China continues to threaten public health, Olivia Boyd looks at an alternative use: powering a city's taxi fleet.

Its 8am on a bright September morning and rush hour in the forecourt at Uptown Oil. Every couple of minutes, one of Londons trademark black taxis pulls in at the filling station. The drivers, some of them yawning a little, some listening to the radio, make small talk with the attendants, before paying up and heading off, ready to find their next customer on the citys busy streets.

It is a scene repeated at garages around the capital, but with a crucial difference: the fuel going into these tanks has been used once already – as cooking fat in local restaurants.

Uptown Oil, located under a railway bridge in the borough of Southwark, south London, manufactures diesel from oil that has fried anything from fish and chips to English breakfast. It is one of only two commercial-scale operators doing this in the city, manufacturing an average of 25,000 to 30,000 litres of low-emission biodiesel every week, out of oil collected from nearby bars, restaurants and cafes.

Its directors – Nigel Jewison, John Upton and Jason Askey-Wood – believe it’s a business using local resources to help tackle some of the city’s most pressing environmental problems, as well as making money.

Like China, the United Kingdom is grappling with a waste-oil challenge. Catering businesses alone are estimated to produce between 50 and 90 million litres of waste cooking oil every year; add private households in and the number climbs even higher. In 2004, the government introduced a law stating that catering businesses must dispose of their used oil “responsibly”, but a lot of the city’s oil is still poured straight down the drain, clogging sewers up with fat, causing flooding, bad smells and rat infestations.

Simon Evans, a spokesperson for Thames Water, the utility responsible for London’s water supply and waste-water treatment, explains: “We clear about 55,000 blockages a year and most of them are caused by fat. It costs £12 million [119 million yuan] a year to clear those blockages. Our term for putting anything down the drain other than human waste or toilet roll is ‘sewer abuse’.”

As well as clearing its drains of fat, London is under pressure to clean up its air, and fast: in June, the government admitted the capital was unlikely to meet EU air quality targets for 2015 until 2025, while there are fears Britain could be fined up to £175 million by the International Olympic Committee if it is breaking EU pollution limits when the games start next July. The UK government is also committed to cutting carbon emissions by 50% by 2025 and 80% by 2050, compared to 1990 levels. It’s a heady mix of challenges. So, can small biodiesel companies like Uptown Oil really help tackle them?

Jewison holds up two test tubes of liquid – one murky, one clear. “Isn’t it satisfying to know the fuel that you’ve used in your car has already been used to cook your chips?” he asks.

It’s a good sales pitch, and his clients appear convinced: “It helps me with everything – the cost is down, it’s local to where I live, it’s good for the environment and it’s good for the engine,” says cab driver Mark Renshaw. “I’ve always been quite into green stuff and I came here and I’ve not been back anywhere since,” adds another customer.

Before getting involved with biodiesel, Jewison ran his own catering company for 20 years. With business partners Askey-Wood and Upton, he later moved into biodiesel – and Uptown Oil was born. In the early days, it was producing 25 litres twice a week just to fuel its own vehicles: today its facility has a production capacity of 50,000 litres.

After intensive filtration and treatment, a clear fuel arrives; ready for the waiting vehicles. Even the by-products are sold: glycerol for instance is used to make soap. The oil collection cans and cardboard and plastics sent to a company called Greener World that turns them into packaging.

Across town, in the north London suburb of Enfield, a two-man business called Pure Fuels is the city’s only other commercial manufacturer of “chip fat fuel”. It is a much smaller operation, producing 5,000 to 10,000 litres a week.

The directors buy in used oil from independent, licensed collectors, paying them between 25 and 50 pence for each litre they bring in, depending on the quality. The firm then puts the oil through the same process as Uptown, creating biofuel and selling it at the door.

In both cases, the product is much more environmentally friendly than regular fuel. Jewison says the carbon-dioxide emissions from the oil are about 80% below those from normal diesel, while particulates – tiny pollution particles associated with heart and lung disease and responsible for around 4,000 premature deaths in London each year – are 60% lower.

Under government customs and revenue regulations, companies producing as much oil as Uptown have to arrange independent tests on its fuel once a month to make sure it meets EN 14214, the international biofuel quality standard accepted by automotive manufacturers. In Uptown’s case, one of its clients – the local council – has agreed to pay for the tests.

Once this low-emission fuel is ready, Uptown and Pure Fuels sell it straight on to a combined clientele of around 1,100, most of them taxis – London’s black cabs, which are responsible for 10% of PM10 particulate emissions from exhausts in inner London, until recently had to pass a twice-yearly emissions test, making biofuel a popular option for drivers.

Not all customers have four wheels: in a recent coup, Uptown brought global accountancy firm PwC onto its books. It will provide fuel for 25% of the electricity in the company’s flash new London headquarters, and 20% of its heating and cooling needs, accounting for about half of Uptown’s revenue.

It looks like a winning formula. So why aren’t more businesses doing it? Even if Uptown and Pure Fuels were ahead of the game, you might expect a more crowded marketplace by now.

One of the problems, explains Pure Fuels partner Kees ’t Hooft, is that a tight licensing regime and relatively high upfront costs means getting up and running in the first place is tough.

In order to operate as a biodiesel producer in the UK, a company needs permits from two government departments: the Environment Agency and Her Majesty’s Revenue and Customs (HMRC). “The first hurdle is something called a PPC licence, which takes almost half a year to materialise. During that time you need to have a site, you need to pay rent,” says ‘t Hooft. “We set the business up with very limited capital and had to rely on the kindness of strangers to help with anything from keeping machinery working to building relationships with established collectors.”

A fairly hostile automobile industry doesn’t help. Recycled vegetable oil won’t work in petrol engines, only diesel cars. And, while producers insist their oil works in all normal diesel engines, some car manufacturers only provide warranties for use of fuel with a maximum of 5% biodiesel. Renault and VW warrant their European vehicles for up to 30%, while Volkswagen and Scania stand out as firms that allow most of their diesel engines to use 100% biofuel.

Uptown’s logo can even be peeled off the company vans: if they take biofuel-branded vehicles into garages for servicing, then the biofuel gets blamed for every problem, Jewison says. 

One website, British Biogreen, displays a simple message on its homepage: “Due to various funding difficulties, polarised by the credit crunch…we regret to announce we will not be able to provide anyone, for the foreseeable future, with any biofuel.” ‘t Hooft remembers getting a call from the liquidators of another firm that closed before it had even started, checking if Pure Fuels wanted to buy its machinery.

Tax is another problem, says Jewison. At the moment, one of it’s key selling points is the oil is taxed at a lower rate than regular fuel, making the product around 20 pence cheaper per litre. But this differential is due to be dropped next year. “In fact, I think we’re probably the only recyclers in the world to be taxed. Because we do just recycling, I think we should be taken out of the tax scale altogether, which will cost the government absolutely nothing compared to the tax they should be taking from the fossil fuel companies.”

All of this makes for a fairly unstable market. “We don’t know what the future will be like and how our business will look in five years,” says ‘t Hooft. “We are a small company and we don’t know whether there is a place for a small company. Perhaps we’ll be bought up by a bigger outfit, or pushed out of the market entirely.”

Biofuel still only accounts for a small fraction of UK road power, according to Department of Transport figures: just 3.1% in 2010. Used cooking oil is the key ingredient, accounting for around a third of all biofuels on the road. But its market share is not yet significant enough for the government to compile figures. Meanwhile, out of London’s 21,000 black cabs, only around 1,000 choose to use pure cooking fat, and those only intermittently.

These figures sound like drops in the ocean, something that isn’t lost on Jewison. He says he tried to calculate how many years Uptown would have to operate to produce the equivalent of the 795 million litres of oil spilled in the Gulf of Mexico last year: “Let’s just say I would be working for a very, very long time.”

Olivia Boyd is assisant editor at 

This article was first published by Southern Weekend.