Market News Service - International Trade Centre

Fuel Sustainability
Fuel costs and carbon footprint
Distillation operations using fuel – typically
diesel or heavy fuel oil – have seen major
price rises over the last few years, and the
signs are that prices are going to remain high,
and that further upheavals in the Middle East
area have the potential to send them higher
still. Even without any consideration of
political disturbances, it is clear that global
demand has risen, and is continuing to rise,
and this is likely to keep prices where they are,
or to push them higher still. Fuel costs are a
major in distillation costs, and enterprises
have to find ways to reduce usage, and/or to
change to lower priced fuels. New boilers and
burners can offer significant efficiency savings
over old equipment, but important and cost
effective benefits can be obtained by
optimising insulation to minimise heat loss,
putting in heat recovery systems to make use
of waste heat, using simple solar collectors to
pre-heat water etc.
As well as trying to minimise fuel usage,
enterprises need to consider their carbon
footprint, and start to work on strategies to at
least minimise it, and then to start off-setting it.
This is starting to become an important factor
in the market, and will become increasingly so.
It is much better to be a leader in offering
carbon neutral product, than to be driven to do
it at the end and not have the time to identify
and plan for the best way to achieve it. Fuel
used is likely to be the major source of carbon
usage, although if crops are grown under
intensive systems, with irrigation and high
fertilizer inputs, crop production itself may
have a significant carbon footprint, which will
also need to be considered. Minimising fuel
used in distillation will reduce the carbon
footprint of the enterprise. After that, the
strategy changes to off-setting – either through
the purchase of carbon credits, or the
generation of credits (such as through
registered tree planting schemes). The costs
of this are not great, but the beneficial impact
Market News Service
Essential Oil and Oleoresins
– both to the environment and the business -
can be. As an indication, for each 10,000
litres of diesel used in a boiler, around 27
tonnes of CO2 equivalent (tCO2e) is released
– so that 27 credits are required to offset it.
Prices of credits vary depending on whether
they come from voluntary schemes or formal
CDM credit schemes, but at around
US$10/credit, the total offset cost would be
US$270 for each 10,000 litres used.
Alternatively, tree planting schemes could be
started, to generate credits. Schemes have to
run for a certain time – typically 15 years, but it
can be shorter – so that they may not be
suitable for fuel wood schemes. In the
voluntary sector RED credits (for avoided
deforestation) can be generated, and
boundary tree planting schemes (around
landholdings) are also accepted. Once the
carbon credit system is understood – and
frequently there are locally based
organisations that have made it their business
to understand the system, in East Africa for
example the Uganda Carbon Bureau is a very
good first point of contact – an appraisal of the
business can identify a range of ways through
which carbon usage can be minimised and
credits generated to move towards offsetting
the carbon footprint.
Enterprises that run wood fired distillation
operations – either an open fire or wood fired
steam boilers – also have to consider fuel
usage, as the same principles apply as for
enterprises using diesel. Wood is becoming
scarce, prices are rising, and burning wood is
generating a carbon footprint.
Uganda Carbon Bureau
Plot 47 Lubowa Estate
PO Box 70480
Kampala. Uganda
Tel/fax: +256 (414) 200988
Contact: Bill Farmer, Chairman
billfarmer@ugandacarbon.org