Royal Dutch Shell Inks Partnership With Biofuel Firm To Power London Buses

Biofuel firm Bio-Bean and oil giant Royal Dutch Shell have inked a partnership which will see the iconic double-decker London buses powered by biofuel generated from waste coffee grounds. A demonstration project which was initiated by London-based Bio-bean will supply the fuel. On an annual basis, 6,000 liters or 1,583 gallons of fuel will be produced.

“It’s got a high oil content, 20 percent oil by weight in the waste coffee grounds, so it’s a really great thing to make biodiesel out of,” Bio-bean’s founder, Arthur Kay, said in an interview with Bloomberg.

Non-food biofuel sources

Due to increasing public pressure over the use of food as fuel, renewable energy firms are turning their focus to biofuels which are derived from waste and this includes used cooking oil as well as inedible plants. Various crops including sugarcane and corn are turned into ethanol which can be used to run engines and this type of fuel has a sizeable market share in places such as the United States and South America.

Used grounds will be obtained from coffee shops that Bio-bean has inked partnerships with. This includes Caffe Nero and Costa Coffee Ltd. According to Kay approximately 500,000 tons of coffee grounds are produced in the United Kingdom every year. The conversion of the coffee grounds will take place at a Bio-bean facility located in Cambridgeshire where the resulting product will undergo blending with regular diesel. The blended product will afterwards be ferried to a storage tank from which the buses will refuel.

Briquettes and pellets

Besides the biodiesel Bio-beans also produces briquettes and pellets which are used in heating homes as well as in stoves. On an annual bass about 50,000 tons of briquettes and pellets are produced. According to Kay these biofuels contain higher calorific content compared to wood.

Started four years ago Bio-bean has obtained funding from the government besides private investors and Royal Dutch Shell. It has expansion plans not just for the United Kingdom but to the rest of Europe as well as the United States.

The partnership between Bio-bean and Royal Dutch Shell coincides with HSBC downgrading the stock of the Anglo-Dutch oil giant from ‘buy’ to ‘hold’. HSBC argues that the competitive advantages of Shell compared to its peers is unconvincing for the long term. Shell’s scrip dividend policy is expected to be ended this year following the growth in cash flows. According to HSBC this could be increased by 60%.

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