Fossil fuel subsidies making biofuels uncompetitive in UAE

January 4, 2012 |

In the UAE, biofuel and energy-efficient cars are making inroads but fuel subsidies are undermining demand. Currently, biodiesel is being used to power some commercial fleets in the UAE, but the low price of fossil-based diesel is preventing the wide-scale adaption.

While recycled biodiesel is commercially viable compared to fossil-based diesel, biodiesel made from plants such as corn and grain is more expensive, and cannot compete with conventional fuel. The case for using corn and grain biofuel is further hindered by the limited scope for growing the feedstock in the region.

According to the Neutral Group, a company that advises companies in the UAE on how to improve fuel efficiency in commercial fleets, conventional diesel is about a third cheaper in Abu Dhabi than in Dubai, and about a third cheaper in Dubai than in Australia. Neutral Fuels, a subsidiary, has built a plant in Dubai that recycles used cooking oil from fast food chain McDonald’s into biodiesel, which is used to power the restaurant’s trucks. Since opening six months ago, two more companies have started using the recycler’s biodiesel.

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Category: International

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