Semplicemente Green biocarburanti
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Module 11: Sustainable Business Entrepreneurship – Case Study

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Semplicemente Green biocarburanti

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Case Study - Simply Green Biofuels

Simply Green Biofuels

The Company

Simply Green Biofuels [1] offers green alternatives to home heating, diesel, and marine fueling in the seacoast New Hampshire and southern Maine area in the U.S.

The company’s flagship biofuel blends can be used without any changes to a customer’s heating system or motor vehicle engine. In four years, from 2007 to 2011, the company grew its customer base to more than 1,400 customers and, according to Biofuels Digest, established itself as one of the leading companies in the bioenergy sector nationally.

Its founder, Andrew Kellar, was named one the “25 Leaders for the Next 25 Years” by BusinessNH Magazine in 2009.


Company Biofuels

The company’s biofuels are locally sourced from waste vegetable oil (WVO). Typically, WVO is collected as recycled vegetable oils from restaurants and distributors. Once it’s refined into a petroleum-like fuel, it is combined with traditional petroleum products to make biofuel blends.

The company offers a bio heating oil product called BioHeat and biodiesel for motor vehicle use in three different blends. The only difference between BioHeat fuel and biodiesel motor engine biofuel is that BioHeat is blended with no. 2 heating oil, and biodiesel is blended with diesel fuel.

Biofuels Contribution to Reduction of Greenhouse Gas

Biofuels offer the potential to reduce greenhouse gas (GHG) emissions because the carbon in the plant matter from which biofuels are produced comes from the carbon dioxide absorbed by the plants from the atmosphere during their lifetime.
This is in contrast to the carbon in fossil fuels, which has been sequestered underground for millions of years and is released into the atmosphere as carbon dioxide when the fuels are burnt. Biofuels can lead to significant GHG emissions savings compared to fossil fuels.

Opportunity

One might think that Simply Green started partly out of necessity and partly out of Andrew Kellar’s passion and concern for the environment. Andrew Kellar identified an opportunity-a market niche that was not being filled-and he developed a business to meet that opportunity. But that is not how he or Simply Green got started.

In 2003, Simply Green was founded by Andrew as an erosion control and hydro-seeding business. It was a seasonal business that fit well with Andrew’s preferred lifestyle. It enabled him to pursue his passion for outdoor activities, including surfing in Mexico with his wife during the cold winter seasons in New Hampshire.

Environmental Impact of Diesel

As Simply Green’s hydro-seeding business grew, the company required additional trucks and equipment, which, in turn, required the use of more and more diesel fuel.

Andrew, with his love for the outdoors, became increasingly concerned about the negative environmental impact of his company’s use of diesel. This concern led Andrew to investigate alternatives.

Were there options for fuel that could still power his business but reduce his negative impact?

Biodiesel Market

Andrew had heard of people collecting grease from McDonald’s or other fast food restaurants and then using it to power their motor vehicles. This intrigued him and he started to see if there was a biofuel alternative to power the vehicles and equipment for his business.

Starting in 2006, Andrew started looking into the biodiesel market more deeply. At the time, there was limited availability in northern New England. He could only locate two gas stations that provided biodiesel, one that was somewhat close to his operating area and one that was two hours away. Also there was only one home heating fuel provider in the area that offered biodiesel, but it was not their main focus; instead, it was a specialty product that they offered.

Personal Change

For Andrew, a personal change was one of the major factors that convinced him to move forward into biofuels. Andrew and his wife, Ginger, received a phone call from the Florida Department of Children and Families. There were three young children that were in need of a home who were relatives of the Kellars. The Kellars took the children in.

Andrew’s new parenting role and responsibility got him to think about how he could positively impact society and the earth and also how he was going to help support the three new additions to the family. This convinced him to start the business.

Fate

As Andrew describes, fate may have had a hand in the situation: “What really kicked me over was that phone call. The phone call that we were going to be parents instantly…And, call it fate, call it whatever you want, but I had just finished doing a hydro seeding job for this one customer and I was researching online where the supply sources were and it said, for more information on our biodiesel, contact Tim Keaveney. And I looked down, this one evening, and there was a check from Tim K for the hydro seeding I just did.”


History of Biofuels

Biofuels have been around as long as cars have. At the start of the twentieth century, Henry Ford planned to fuel his Model Ts with ethanol, and the original diesel engine designed by Rudolph Diesel used peanut oil-based fuel. Discoveries of huge petroleum deposits kept gasoline and diesel at a low cost for the twentieth century, and biofuels were largely forgotten.

However, with the rise in oil prices, along with growing concern about global warming caused by carbon dioxide emissions from conventional fuels, biofuels have been regaining popularity recently.

Gasoline and diesel are actually ancient biofuels. They are known as fossil fuels because they are made from decomposed plants and animals that have been buried underground for millions of years. Biofuels are similar except that they are produced from plants grown today. [2]

Biodiesel Source

Biodiesel is a product that is derived from a renewable energy source, such as soybeans. The renewable energy source could also be other crops, such as corn, although corn is more typically made into ethanol for use by gasoline engines. It could also be recycled grease that comes from commercial fryers.

Biodiesel produced from recycled oils and grease is considered a second-generation biofuel, whereas the soybean would be, if it was grown as a virgin product specifically for it, considered a first-generation biofuel. There also are third-generation biofuels based on algae. [3]


Offset Carbon Savings

The greenhouse gas (GHG) emission reduction from using biofuels is not 100 percent when compared to fossil fuels. Carbon savings are partially offset by the energy that is needed for cultivation, harvesting, processing, and transportation of biofuels. This can represent a substantial fraction of the total energy released from processed biofuels and varies significantly between crops.

In the worst-case scenario, the production process may actually take more energy than can be produced when the biofuels are used, which undermines the potential environmental benefits. [4]

Changing Usage of Land

There may be carbon emissions associated with changing the usage of land to biofuel crop cultivation.

For instance, if areas that have not been previously cultivated, such as forest land, are converted to produce biofuels, then there may be significant immediate releases of carbon stored in the existing plant life and in the soil and also damage to biodiversity and the ecosystem.

These land use-change effects may prevent biofuel plantations from generating an overall reduction in carbon emissions until many decades of crops have been produced.

Public Policy Impact on the Market

The biofuel industry is subsidized by the federal government, like most other US energy markets, such as oil and natural gas. There is a $1 per gallon “blenders’” credit for companies that produce pure 100 percent biofuels and then blend in 0.1 percent heating oil or diesel fuel to produce B99.9 made from either first-, second-, or third-generation sources. This blending triggers the credit and allows the product to be competitive with traditional fossil fuels.

The biofuel industry is significantly impacted by changing public policies due to the highly politicized nature of discussions about climate change and the human influence on climate change in the United States. This has made it difficult to develop a business in the industry. For example, the blenders’ credit was repealed in early 2010 and it took almost nine months for it to be reenacted in the US Congress. During this period, many biodiesel factories were either in temporary shut down or in foreclosure, and this resulted in significant job loss in the industry. [5]

Bibliography
[1] http://www.simplygreenbiofuels.com

[2] “Biofuels: The Original Car Fuel,” National Geographic, http://environment.nationalgeographic.com/environment/global-warming/biofuel-profile.
[3] For more information on BioHeat and related products, see “Alcohol Can Be a Gas,” http://www.permaculture.com.
[4] “Biofuels—The Net Energy Debate,” SyntecBiofuel, http://www.syntecbiofuel.com/biofuels_net_energy_debate.php.
[5] Brett Clanton, “New Year, New Troubles: Biofuel Plants Idled by Loss of Tax Credit,” Houston Chronicle, December 31, 2009, http://www.chron.com/disp/story.mpl/business/energy/6794155.html.



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