He once failed to start a business and drove a taxi, and his mother was so worried that she cried. Lin Xiu'an, chairman of Youngray(DGM), a small oil treatment plant in Kaohsiung, why did he allow international oil giants to buy up waste oil that was not wanted by Taiwanese night market vendors and restaurants, and become the savior of carbon reduction in the global aviation industry?
Yongray(DGM) Chairman Lin Xiu'an (middle) turned waste oil from night markets into clean raw materials and developed intelligent recycling machines under the brand name DGM. The meaning behind this is that there is only one earth, so "Don't Go to Mars." On the left in the picture is R&D chief Wu Youjun, and on the right is chief financial officer Zheng Liwei. Picture source: Photo by Yang Yaqing
In early April, the oil tanker "Golden Sky" docked in Taichung, carrying more than 1,000 tons of low-carbon industrial oil produced in Taiwan and sent to the world's largest regenerative refinery in Singapore by Finnish oil company Neste, which has recently expanded its capacity. Sustainable Aviation Fuel (SAF) is added directly to aircraft engines, reducing carbon emissions by 80% compared to traditional fuel.
Boeing CEO Calhoun pointed out that SAF is the aviation industry's "only solution to achieve net-zero carbon emissions in 2050." According to estimates from the International Air Transport Association (IATA), SAF will help the global aviation industry reduce carbon emissions by 65% by 2050. , equivalent to an annual production requirement of 449 billion liters. As of last year, the production capacity was less than a fraction, with only 300 million liters globally and only more than 40 refueling points. As soon as the new production capacity was opened, it was immediately booked.
Taiwan’s savior that can help the global aviation industry reduce carbon emissions is Kaohsiung-based Wing Rui Industrial, which collects waste cooking oil from the oil pans of restaurants, night market vendors, and fast food restaurants across Taiwan and refines it into raw materials for SAF.
These oils must pass 33 quality inspections of the European Union. Under the requirements of the International Sustainability and Carbon Verification (ISCC), they must also provide traceable production history: who handles it, who clears it, and even which store provides it. Every drop of oil is Got it crystal clear.
Compared with the big brother Chengde Oil and Gas, which turns waste cooking oil into biodiesel , this small company with an annual revenue of about 350 million has chosen a different path: turning waste cooking oil into clean raw materials.
Not only does it sell to Neste, Youngray(DGM) also sells it to Shell of the Netherlands and BP of the United Kingdom, and to regeneration refineries in South Korea, Malaysia, Singapore, and Europe. It exports more than 10,000 tons every year. It is the only company in Taiwan that has been recognized by various international refineries and provides SAF raw materials. waste cooking oil treatment plant; earlier this year, it obtained Taiwan’s first waste cooking oil carbon footprint ISO certification.
Youngray(DGM) has set up stainless steel oil storage tanks at its factory in Tainan's Xinji Industrial Zone to collect waste cooking oil from all over Taiwan . (Photo by Yang Yaqing)
"I have never lost customers," said 49-year-old Lin Xiu'an, chairman of Youngray(DGM), speaking slowly and with shining eyes. He has been doing oil business all his life, and this is his second entrepreneurial venture to make a comeback.
When Lin Xiu'an was a graduate student at Taiwan Ocean University, he studied the technology of converting waste cooking oil into biodiesel. After working as a researcher at the Industrial Technology Research Institute for 5 years, he founded Jingteng Energy. Before Taiwan's biodiesel policy was blocked, he worked with Chengde Oils and Fats and Xindai Chemical are the three largest biodiesel plants supplying China Petroleum Corporation.
At that time, Jingteng had less than 30 people and its annual revenue could reach 1 billion. But within a few years of starting his business, he was forced to leave the board of directors due to disagreements with his ideas.
After a big fall in his life, Lin Xiuan did not go back to the Industrial Technology Research Institute to find a job. Instead, he continued to stay in Kaohsiung, where he started his business, and drove a taxi in front of a hotel for more than a year.
The two elders in his hometown in Keelung thought he would never recover. His father told him that his mother was so worried that she cried.
"I'm not losing heart, I'm planning," said Lin Xiu'an, who has been driving a taxi part-time to earn tuition since he was a student. The driver's seat is a space for him to calm down and think. If you return to ITRI, you will admit that you have failed in the business in this life; but if you want to start a business again to make biodiesel, which you are good at, you must build a treatment plant with economies of scale and invest at least hundreds of millions, and you will compete with major international companies.
He thought that the most common complaint among the foreign biodiesel industry colleagues he met at the seminar was the uneven quality of raw materials. Often, up to 30% of the entire container is water, sludge, and miscellaneous solvents and other impurities. The quality cannot be judged by the naked eye. The pipeline will be blocked as soon as the materials are added, and the machine must be dismantled and cleaned before restarting, which greatly affects the feed conversion rate and production efficiency.
Lin Xiu'an used to often return defective raw materials. He intuitively felt that there was a business opportunity here.
"I have known these little bees (the common name for self-employed waste cooking oil removal operators) from North, Central and South since Jingteng, and we are very familiar with them. They can bring out my turtle-hair personality and provide clean raw materials to buyers."
He scraped together 1.5 million yuan, contacted the CEO of the International Biodiesel Factory, and started buying waste cooking oil across Taiwan. After quality control and inspection, he became one of the few quality-controlled waste cooking oil exporters in the market.
He made the right bet. Youngray(DGM) was established in 2013 and made money in the first year, with revenue of more than 90 million yuan and only three employees including him. In 2019, Youngray(DGM) received a license to set up a treatment plant, and Lin Xiuan's turtle hair was fully utilized in the refining process.
There is much knowledge about waste oil refining. In addition to removing impurities, moisture, chloride ions and organic solvents, the oil handed over from the fast food restaurant contains calcium and phosphorus leached from fried chicken bones, which must be suppressed when included in the total metal content. Youngray(DGM)'s quality is in place, and the refined low-carbon biobase oil can be used for various industrial purposes ranging from cutting oil to calendering oil. This time, the international oil giant's business is coming.
He was very confident in his oil. The first time he flew to the Netherlands to negotiate a purchase contract with Shell, he was questioned as to why the price quoted was higher than that of China. His response was, "Then just buy it directly from them."
"I have been the owner of a biodiesel factory, and I know that raw materials are very critical," Lin Xiu'an analyzed. China's raw material conversion rate is less than 90%, and it also costs money to process a large amount of sludge, which drags down the utilization rate; Youngray(DGM) can achieve the conversion rate 95%, which is not more expensive in conversion. Shell has since become a customer of Youngray(DGM).
In 2021, Youngray(DGM) launched a smart AIoT machine. After the store weighs the oil by itself, it will be immediately paid by a third party according to the recycling price. The money and goods are paid in full, and there is a video record.
Youngray(DGM) has deployed 18 units in Tainan Garden Night Market, Kaohsiung Youth Night Market and chain fast food restaurants, reducing oil collection costs by 80%. "The data is uploaded to the blockchain, and customers can provide raw data if they want!" Lin Xiu'an said proudly.
In addition to being handed over to cleaning teams and removal agencies for recycling, about 40% of Taiwan's waste cooking oil is recycled through bees, which gather buckets of sand into towers. Lin Xiu'an most hopes to use this machine to improve their working environment.
Youngray(DGM) places intelligent recycling machines in night markets and fast food restaurants to reduce the burden of oil collection, and customers can also view complete data. (Photo by Yang Yaqing)
Due to lack of manpower during the initial stage, Lin Xiuan once drove the car himself to collect oil. A barrel of oil weighs 16 kilograms. He carried the barrel back and forth from the KTV to the restaurant day and night. His clothes got wet and dry, and he fell seriously ill a week after collecting the oil.
"This job is really, really, really hard," he elaborated. Not only is oil collection hard work in the sun and wind, but it is also often delayed. When the store is busy or closed, if the oil cannot be received that day, it has to be arranged on another day. The car is very inefficient. "I just thought, didn't I come from ITRI? Didn't I have a technical background? Is there a smarter way?"
He bought several universal angle steels and a pump from a hardware store, hired an engineer, and improved the local steelmaking method step by step, and finally made an intelligent recycling machine. Not only can it be placed in the night market for vendors to deliver oil, but it can also be installed in restaurants with high-temperature resistant pipelines and connected under the fryer to draw oil.
This makes Little Bee's oil collection work faster and more flexible, and also allows customers to follow suit. "As long as it involves carbon reduction, there must be records for verification," observed Huang Shihong, deputy director of the Kaohsiung City Environmental Protection Bureau, who assisted Youngray(DGM) in setting up the machine at the Kaohsiung Night Market.
Lin Xiu'an always has this group of oil-collecting bees called "little bosses" in his heart. Not long after Youngray(DGM) Startup encountered a black-hearted oil crisis, the price of recycled oil plummeted to a quarter. Lin Xiuan skipped all the middlemen and bought it at the original price. He also provided the app developed by Youngray(DGM) for Little Bee to use, making oil recycling no longer a problem. It is a traceable cash transaction, and all information is transparent and open.
"When you work with Youngray(DGM), you are treated as a member of Youngray(DGM)." Chen Zhongyi, the head of Jieqi Enterprise Co., Ltd. is also a Little Bee. He worked with Lin Xiu'an during the Jingteng period. "He is the only one in Taiwan who directly works with Little Bee. Treatment plant, everything else relies on mid-tier traders.”
Lin Xiu'an hopes that clean raw materials from Taiwan can give priority to assist Taiwan's aviation industry in reducing carbon emissions. (Photo by Yang Yaqing)
Currently, there are about 20 little bees cooperating with Youngray(DGM). When Lin Xiuan first met, he always started talking about morality. When he met Chen Zhongyi more than ten years ago, he also started talking about the harm of waste oil flowing into the food system. Chen Zhongyi observed that in order to make money, some bees sometimes mix high-acid oil, feed oil and even carcasses of dead animals with oil. The quality of cooperation must be controlled from the perspective of character.
When the system and machines are proven feasible in Taiwan, it will be possible to export the entire factory and even set up joint ventures overseas.
"For example, Italy only recycles 30% of its waste oil. This equipment and system can be used to force the oil out," Lin Xiu'an thought. When the global SAF shortage is severe, it might be possible to use clean raw materials as a bargaining chip to demand international cooperation. The SAF refinery gives priority to supplying Taiwan Airlines.
However, Youngray(DGM)'s new business model to innovate recycling efficiency must first prove that Taiwan can force out more oil.
According to estimates from the Environmental Protection Agency, Taiwan produces about 80,000 tons of waste cooking oil a year. Industry insiders observe that this is not enough to satisfy the production capacity of existing large manufacturers such as Chengde and Hesheng Storage, a subsidiary of Shengyi Chemical. Whether Youngray(DGM) can win against the major manufacturers in the battle for oil is the next challenge for business expansion.
In the early days of starting a business, Lin Xiuan was scolded by his mother for not doing the good work of the Industrial Technology Research Institute and reaping the benefits of starting a business. Asked him, were the two elders relieved when they were invited to the Presidential Palace to receive the Gold Medal Award last year? "Anyway, they nag because they love you," Gui Mao's son said about his family, and became shy for a moment. "We just do our best and don't let them down or embarrass them."
(Editor: Wang Lihua)
