Daniel Gomez Íniguez
View from the Top

Mexican Players in the International Biodiesel Market

Wed, 02/19/2014 - 09:00

Q: How is the Mexican bioenergy industry positioned internationally?

A: The bioenergy market in the US started growing because the army developed a strategy to reduce its dependence on imported fossil fuel The sector went from producing 0.5 million gallons per year in 1998 to 1.2 billion gallons last year. There are currently 196 large certified biodiesel facilities in the US. The country has a sound regulatory framework and subsidizes about 30% of biodiesel with tax incentives. In comparison, the Mexican biodiesel industry has not been developed. People here have a closed mind toward the idea of biodiesel competing with diesel. But diesel is subsidized and biodiesel is not, so there is no way it can compete.

Q: What initially moved you to create Solben?

A: Solben was started six years ago by a group of young engineers interested in biodiesel. Every time we went to a conference on renewable energy, the focus was on solar and wind but we were especially interested in the development of biodiesel technology in Mexico. We were told to buy technology in Europe, Brazil, or the US, but we did not believe that buying international technology would be effective if we wanted to reactivate rural areas and teach farmers to operate that technology. That led us to consider developing Mexican technology for biodiesel production. We had no money, no business plan, and we did not belong to any business association so we thought about creating an NGO. We would ask for money from the government, we would get a grant to develop our technology in five to 10 years, and we would develop and commercialize patents. However, we never got the grant so we started developing new strategies that were sustainable and generated income. We do not depend on money from sponsors, donations or the government, we developed the company by reinvesting our profits. Right now, 80% of Mexican biodiesel facilities use Solben technology.

Q: How does Solben distinguish itself from international competitors?

A: The international market has two options for the biofuels industry: enormous biodiesel plants and small biodiesel facilities. The first ones centralize 100,000 liters of oil per day and then distribute it to clients. However, those plants faced the problem of having to centralize raw materials and started struggling because of the lack of feedstock. The problem with small biodiesel facilities is that this equipment can be bought online but might not actually produce biodiesel. If you put what those plants produce into a motor, it might not work due to the low quality of the biodiesel, leading people to claim that biodiesel does not work at all. Instead of following the centralized model, we started introducing a distributed focused on high quality standards. We are also developing new models to not only sell our technology, but to let others lease and operate it while splitting the profits of the biodiesel production. We are getting into the biodiesel production industry, which is why we are taking the leasing model to the US. Another advantage we have internationally is that we develop customized solutions. Being able to adapt to change, to innovate, and to anticipate the next stage in technological development has allowed us to position ourselves in the international market. We have a global vision but are acting locally so that we can transform the local environment and then become global.

We promote distributed energy models where the technology follows the feedstock, which helps to cut logistics costs and create self-sustainable communities that consume the fuel. Jatropha, castor oil and other feedstock have been tried in the market, but Solben has developed a multi feedstock technology that can adapt to local conditions and produce cheaper oil to ensure a faster return on investment.

Q: How important are community relationships for the biofuel sector and for Solben?

A: Our objective is to increase the quality of life in rural areas, first in Mexico, then in the world. We know energy can both generate jobs and increase the quality of life of those living in rural areas, by increasing salaries, creating awareness about renewable energy and providing better education that could lead to the creation of technology. We need to teach people in rural areas that they can develop certain high value added products locally to create sustainable communities where the oil is produced, transformed and consumed.