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April 24, 2013

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Firm illegally outsources swill oil processing

ONE of the city's two companies licensed to process swill oil into biological diesel was ordered to halt operations for a month after it was found illegally outsourcing work to an unapproved plant in Jiangsu Province.

The company sold partially treated waste oil to the Jiangsu company then bought back the finished product, officials said.

The Shanghai Luming Environment Science Co was told to fix the problem during that time or lose its license, officials said. During the month, the oil will be processed elsewhere.

All swill oil sold by Luming has been treated so it could not be used in food processing, said Gu Zhenhua, vice director of Shanghai Food Safety Office. Some companies were caught in a crackdown illegally reusing swill oil for food.

Officials found Luming sold half-finished products to Jiangsu Jiemei Biological Emergency Co for further treatment to save costs. It would then purchase finished biological diesel fuel from the Jiangsu company.

Local authorities started investigating after receiving tips in early April, claiming a food oil tanker was transporting partially treated swill oil from Luming since January.

"The transportation company is an independent one that uses a food oil tanker instead of a tanker for dangerous chemicals to save costs," Gu said.

Luming told a Shanghai television reporter that it loses 480 yuan (US$76.20) for every ton of biological diesel it produces, but it can avoid losses by outsourcing to Jiemei, which uses a lower grade of technology. Gu said the city is considering subsidies for biofuel producers and users.

Luming, established in 2003, made a name for itself when it signed a letter of intent last year with Netherlands-based SkyNRG, a major jet biofuel supplier, to provide more than 10,000 tons of jet biofuel. Luming's refined biofuel was to be used by SkyNRG's client airlines, including KLM, Air Canada and Qantas. However, fuel from the Shanghai company didn't meet the Dutch company's standards and was rejected.

The city produces about 900 tons of waste oil each month, and most is sent to Luming and another local firm, Zhongqi Environmental Protection Co Ltd.


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