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An innovative business model: turning domestic used cooking oil into renewable “fuel” for education and entrepreneurship

Periodic Reporting for period 1 - InnovOleum (An innovative business model: turning domestic used cooking oil into renewable “fuel” for education and entrepreneurship)

Reporting period: 2018-03-01 to 2018-08-31

Approximately 854,000 tonnes of used cooking oil (UCO) are produced in households across the EU every year. Most of this UCO is directly disposed of down domestic household drains or thrown away into landfill with detrimental effects on the environment, including soil and water systems. This also leads to the loss of a valuable resource, since UCO is a highly sought after commodity, as it can be easily converted into biodiesel.

The EU biodiesel industry has a capacity of over 21 million tonnes, but currently only produces 11.6 million tonnes of biodiesel. The collection and conversion of domestic UCO into biofuel could help close part of this gap. However, the biggest challenge for domestic UCO is the economic viability surrounding the logistics of its collection, since each household produces small volumes of oil. Coupled with market uncertainties related to the price of UCO, the cost of fuel, exchange rates etc, it is therefore not surprising that in the vast majority of European (and other) countries efforts to collect domestic UCO are fragmented, if at all available.

InnovOleum provides a viable solution to the logistical problem of used cooking oil collection, by making schools community collection hubs. Schools benefit from InnovOleum in two ways: (1) part of the proceeds from the sale of the collected UCO is returned to schools to be invested in green infrastructure and green technologies, and (2) UCO becomes a vehicle for hands-on environmental education at schools, both through the provision of training and through the integration of green technologies in the day-to-day curriculum.

InnovOleum is an established action in Cyprus, with 376 participating schools (out of the ca. 500 schools in Cyprus). Additionally, 200 businesses donate part of their UCO to their neighbourhood’s school as part of their CSR policy.

The success of InnovOleum has attracted international interest, and there is therefore a business opportunity. As such, ISOTECH aims to develop a “blueprint” that will allow the replication of InnovOleum in other countries, through a social franchise scheme. This requires the development of a concrete but flexible business plan. Thus, the objective of this proposal is to undertake a feasibility study that will identify the main bottlenecks and how to overcome them, the initial set of target countries for the project’s replication, the strategy for replication, milestones, costs and forecasts, and management plans.
The work implemented and the results achieved in the six months of the action’s durations, are as follows:
1. Mapping of key stakeholders in target countries, followed by informal interviews done face-to-face or via telecommunications to gauge interest in the implementation of InnovOleum and to gain a better understanding of education system structures in each country. First, an initial list of possible target countries was prepared, based on information gathered either through ISOTECH’s international contacts or through search in databases and contacts with Embassies of potential countries in Cyprus. The first list of possible target countries included Croatia, Greece, the Republic of Ireland, the United Kingdom, Norway, Italy, Georgia and Spain. The second step concerned key stakeholder identification. The stakeholders identified through ISOTECH’s network, were either local SMEs or local NGOs, regional administrations, or key personnel from the Embassies of these countries in Cyprus who either provided ISOTECH with information or with contacts etc.
This process resulted in a “short” list of four countries with a great interest and/or potential for the implementation of InnovOleum. These four countries will be InnovOleum’s first target group. Specifically: Croatia, Greece, Georgia and the United Kingdom.
2. A desk-based study was then undertaken to better understand the legal and regulatory frameworks in each of the targeted countries, and how that might affect the implementation of InnovOleum.
3. The desk-based study on the legal and regulatory framework was closely linked to the market study that was implemented for Europe in general and the target countries in particular. The market study identified, where possible, information on the amounts of UCO produced, collected and transformed, UCO prices, demand and supply; UCO to biodiesel conversion potential; UCO management from domestic and commercial sources; and potential competition.
The market study demonstrated that Croatia and the United Kingdom are good initial countries for replicating InnovOleum.
4. Based on all the previously gathered information, it was decided to proceed with the model of social franchise for the internationalisation of InnovOleum, and a franchising strategy was developed.
5. Finally, a business plan including a feasibility study was developed. The feasibility study concludes that the social franchise model is economically viable both in terms of the franchisees and the franchisor.
The project allowed ISOTECH to investigate the feasibility for franchising its InnovOleum concept. The outcome is a viable social franchise model that ISOTECH aims to implement immediately. The implementation of this model is expected to have positive economic impacts on ISOTECH (in terms of annual turnover growth and increase in the number of staff), on the involved schools (in terms of funds returned to schools to be invested in green infrastructure and technologies), on the master franchisees (increased revenue streams for NGOs) and on the unit franchisees (income for unemployed youth).
Additionally, the project is expected to have significant environmental and social impacts as it will divert large volumes of domestic used cooking oil from inappropriate disposal, it will increase the EU production of biodiesel, it will offer self-employment opportunities to unemployed young graduates and will help schools become more sustainable.