Carlos Campos
Director General
Biofuels de México
/
Insight

Social and Environmental Arguments for Biofuels

Wed, 02/19/2014 - 08:48

According to the Ministry of Social Development, there were 16.7 million people living under the poverty line in rural Mexico in 2012. For decades, the lack of opportunities in the countryside has forced millions to migrate either to urban regions or the US in search for opportunities. It is in this context that Carlos Campos, Director General of Biofuels de México, decided to enter the sustainable energy market. He claims that the biodiesel industry is an employment opportunity for a lot of economically disadvantaged people, particularly in the countryside. “Because of the magnitude of the biodiesel industry, you can provide jobs for people in abandoned areas. We are not going to substitute food crops for crops destined to produce biofuels; the land we use is already abandoned,” underlines Campos, who states that biofuels can bring much-needed money to these lands. Using biodiesel for transportation is their best known application. Biofuels de México is working with the largest transport enterprises, including Grupo ADO, a passenger transportation company with a fleet of 10,000 buses. Additionally, Biofuels de México also collaborates with LIPU, the leading transportation company ferrying employees and students. Both clients are interested in trying out new technologies and biofuels to understand how they can benefit from implementing eco-friendly solutions. On the downside, Biofuels de México is only able to supply a small portion of these large fleets since the transportation industry is reluctant to invest on scale given its need to keep costs low and stable. “It is hard to convince customers to pay more simply by relying on a green flag,” explains Campos. Biodiesel is generally more expensive than regular diesel, which is a subsidized fuel supplied by PEMEX. “We thought about subsidizing biofuels as well. We sought the government’s help and found no support for the idea,” explains Campos. He adds that biofuels will just have to succeed without subsidies as there is no point in funding an industry that cannot survive without the government’s help. Other options are cutting down costs and investing in new technology.

Mexico is already producing ultra-low sulfur diesel, which needs a product to make up for the lubrication lost during the sulphuration process. PEMEX could pay for the added value 

of biodiesel and still have lower costs compared to other options. “There is an opportunity in the oil industry since SENER was behind the idea of using biodiesel in this sector,” says Campos. The drilling industry provides another area of application because biodiesel can be used as an additive to maintain a determined consistency in drilling fluids. Campos sees the drilling industry as a potentially robust market because the sector has widespread activity in Mexico.

“Biofuels de México could supply one million liters per month, and could serve as a catalyst for the entire biofuels industry. The potential uses of biofuels should be further promoted, as they can be used in the agroindustry as well,” explains Campos. In spite of the market potential, Campos believes the biofuels industry in Mexico is lagging behind for political reasons and a general misunderstanding of the impact these fuels have on the economy. “Policymakers are afraid of negatively affecting PEMEX because it is a state company,” he claims and adds that, even if the biodiesel industry successfully thrived, it would never grow large enough to compete with PEMEX. This means the biofuels industry would actually contribute to the development of the energy sector, since PEMEX needs a strong vegetable oil and biodiesel supplier.

90% of Biofuels de México’s raw material consists of oil but Campos points out that there are no relevant policies for SAGARPA to foster the sector, leaving SENER powerless to act. Additionally, PEMEX’s suppliers need to have a strong focus on producing virgin oils, leaving the oil company having to import these products. Campos highlights the fact that the largest biofuel user in Mexico imports the source materials as a major obstacle to the national biofuels industry.

Biofuels de México originally became known for obtaining used vegetable oil from restaurants in Mexico City. Campos says that producing and using sorghum or canola oil to produce biofuels will not yield different results because the government’s attitude will not change. Therefore, there are not many options that can foster the sector’s growth. Making synthetic oil from waste, however, provides more opportunities. Biofuels de México representatives visited a German plant that produces a unit of biodiesel from every three units of biomass. Campos’s team realized that this was an attractive option as Mexico City produces approximately 10,000 tonnes of solid waste daily, which could be turned into one million liters of biofuels per day. Furthermore, this waste is just dumped, making it a current environmental liability and an economic burden for the city’s government. Campos proposes a special fund to mitigate the initial risks of implementing this technology in Mexico City. “If Biofuels de México buys this technology and demonstrates its feasibility, it would be easier for us to acquire more capital from investors and expand by installing similar facilities.” Regardless of future outcomes, Biofuels de México will continue with its restaurant campaign, which enables the company to raise awareness among the general population about the existence of biodiesel.