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Suddenly, what was considered a ‘junk’ suddenly became a gold mine, the fuel giants started to ‘torn’

Few people expect that, in a market that is at the “hottest” level in decades, animal fats and greases will become a sought-after item.

They are all essential components of the eco-friendly diesel engine production chain – a multibillion-dollar business that fossil fuel giants like Exxon Mobil and Chevron are racing to capitalize on. Maximize the advantages in California and Canada.

Prices of vegetable oils, used cooking oils and fats are skyrocketing. In the past, for decades, the fat trade was very little known and not very much cared for. In some countries, waste grease is even considered a threat because it harms the environment and production workers.

“They used to be just small sellers of products. But now, they’ve become the people with the most attractive jobs,” said Patrick Bowe, CEO of The Andersons crop business in Maumee, Ohio.

Bowe himself has recently set up a division to sell this ingredient.

Suddenly, what was considered a waste product suddenly became a gold mine, the fuel giants rammed their heads - Photo 1.

Biofuel prices skyrocketed

After the Big Oil giant entered the green diesel war, many companies have pushed forward their goal of reaching net zero emissions by half a century, while increasing the use of biofuels. The trend is boosting demand for a range of raw materials, such as soybean oil, driving their values ​​to all-time highs today, April 21.

According to David Elsenbast, president of Iowa-based AgriBio Consulting LLC, the prices of used cooking oil and animal fat have both hit “unprecedented” highs in the past year. He estimates the market for leftover cooking oil in the US has skyrocketed from $700 million to $2.5 billion, in just a decade. Tensions between Russia and Ukraine are one of the reasons why these “raw materials” are so sought after and contested.

Fossil fuel companies are trying to figure out how crude oil is traded. Buyers and sellers of vegetable oils, used cooking oils and animal fats are seen across the food and agricultural markets, but only a handful of American investors see a golden opportunity.

Unlike petroleum, which is extracted from the ground and flows through pipelines, biofuels are diverse in supply. They are collected from many farms, restaurants, processing plants, and traders can only buy and sell a relatively small amount, then transport them by road, rail or on barges. . Therefore, in the current context of supply stress and driver shortage, the transportation of biological materials can be interrupted at any time.

Meanwhile, to make renewable diesel oil, the chemical composition of natural oils and fats will be changed through the use of high-pressure hydrogen and the removal of oxygen. As a result, fuel will be put into pipelines and directly replace conventional gasoline.

Suddenly what was considered a waste suddenly became a gold mine, the fuel giants rammed their heads - Photo 2.

Used cooking oil

According to a vegetable oil expert, job offers related to this field appear at least once a week. Employers often offer candidates a salary of up to 800,000 USD/year, double the current level in order to attract high-quality human resources.

To keep up with the trend, many fossil energy companies are also starting to acquire biofuel producers. For example, oil and gas operator Chevron Corp. is planning to buy Renewable Energy Group for $3.15 billion, or 10 times its estimated profit this year.

“Owning the raw material system and business relationships is a big driver of value for this deal,” said John Campbell, CEO of Ocean Park investment bank specializing in biofuels. said.

According to: Bloomberg

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Vu Anh

Following Economic Life

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