Muck and brass in Latvia

By bne IntelliNews April 15, 2013

Mike Collier in Riga -

If the ability to attract the attention of real decision-makers is key to a successful international business, then Greenworld Fuels is a company to watch.

"We had President Putin on our stand at a trade fair in Russia," says Paul Barratt, chief executive and one of the main shareholders of the UK-registered but Latvian-based company. "Of course we were delighted, but we were even more amazed that he stayed for 20 minutes and asked a lot of detailed questions. He was very well informed."

Barratt repeated the trick at the Northern Future Forum in Riga in February when, after giving a five-minute presentation to a variety of prime ministers and other bigwigs, he was then grilled for a good 20 minutes by British Prime Minister David Cameron, suddenly rediscovering his former interest in the green economy.

Barratt is no novice when it comes to Baltic business, having previously developed a company called Blue Mountain Peat before selling it for a tidy profit to the Germans.

Greenworld consists of several companies from R&D to manufacturing with offices in London, Sao Paulo, Moscow and St Petersburg, but is essentially divided in two parts: one dealing with waste collection and logistics (featuring ingenious underground communal garbage dumps that can hydraulically emerge from beneath Scandinavian streets like the base of a small-scale James Bond villain), and the other processing the captured waste and turning it into fuel-grade ethanol.

The production facility is in Bolderaja, a small town near Riga whose past as a Soviet submarine base means there are still a fair number of skilled engineers and scientists available to recruit to help the company become a major player in waste disposal - an industry that clearly is only going to grow and grow. "We decided to start with a clean sheet. Most existing waste management systems just concentrate on small facets looking for revenues from different waste streams. We thought the only real way to approach it is to look at the end-to-end system from waste collection all the way to energy," Barratt tells bne.

Not causing a stink

The centrepiece of that desire is the company's unique 6-hectare ethanol production plant, which sees raw household trash arriving at one end and fuel-grade ethanol emerging at the other, having been transformed into pulp biomass in between. According to the company, it can already work at around 94% efficiency (ie. only 6% going to landfill) with a near-100% figure possible within three years.

The amount of ethanol produced varies according to the nature of the waste going in, but output would typically be around 250-350 litres per tonne of waste. Incredibly, in just 72 hours a bag of trash can be transformed into bioethanol.

Greenworld has already signed orders for three facilities in the South Korean capital of Seoul and another in Smolensk, with Russia clearly a target market. A feasibility study has identified that 25 such plants would be enough to service a city "the size of St Petersburg" and a smaller metropolis of 2-3m - the type of city that abounds in Russia - would need around 15 plants.

Backing up its potential for Russian expansion, Greenworld has won the backing of the Academy of Science in Moscow, which carried out due diligence on the production process and gave it the thumbs up. "Our target is that the waste never moves more than 10 kilometres from its point of collection. Rather than have very big landfill sites or huge factories we have small, compact systems," Barrat says. "That means waste moves in a sort of spoke and wheels system. Our optimum size is something between a 180,000- to 250,000-tonne-per-year plant. It gives us a very small ground space located on the edge of urban areas and means we can continually receive waste. We aggressively control odours and the most important factor is that there is no external waste storage - everything comes straight in."

So no stinking, rotting piles of waste blighting the lives of nearby residential districts and causing other health hazards - which also makes planning applications easier once people are convinced that waste treatment plant around the corner is actually rather pretty and doesn't stink to high heaven. "The key is to get a pure biomass stream without releasing toxins. We've spent the last two to three years developing this separation system and we then use best available technology to complete the process using other partners such as the Danish enzyme company Novozymes who have supported us with their own R&D," says Barratt.

Once the ethanol is produced, it can be de-natured for blending into the fuels of local retailers or it can be shipped to other markets. The potential for such a product is immense, regardless of the additional green benefits of the production method. It is estimated that EU countries alone will use around 325bn litres of transport fuel per year by 2020, with ethanol consumption reaching 12bn litres.

EU regulations stipulate that 10% of automotive fuel must be biofuel by 2020. Unlike biofuel produced from crops such as rape, cellulosic ethanol of the type produced by Greenworld does not require increasing areas of land to be given over to fuel crops. "Market potential is huge and will grow progressively with added value over time as demand outstrips supply," Barratt says.

The eastward orientation of the company is mainly down to the short-term nature of waste contracts in the west - a point Barrat made strongly to the British prime minister. "It's impossible to attract the investment to build a facility like this with a five-year waste model," he says. "Generally we would be looking for at least a ten-year contract to make it feasible and give decent payback time to the investors."

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