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McDonald’s UAE in Venture to Make Biodiesel From Cooking Oil

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July 3 (Bloomberg) -- McDonald’s UAE and privately held Neutral Fuels LLC formed a venture to produce biodiesel using recycled vegetable oil from the fast-food retailer’s outlets in the United Arab Emirates, the companies said.

The venture involves the Gulf nation’s first plant licensed to make biodiesel, the partners said today at a news conference in Dubai. The facility will have an annual output capacity of 1 million liters (264,000 gallons), said Karl Feilder, chairman of Neutral Group, the Dubai-based parent of Neutral Fuels.

“We are taking away the need to import diesel,” he said. Biodiesel from the factory in Dubai, the second-largest emirate in the U.A.E., will supply a limited number of companies at first and won’t be available for wider sale, Feilder said.

McDonald’s UAE, a unit of Oak Brook, Illinois-based McDonald’s Corp., uses more than 20,000 liters of vegetable oil at 90 restaurants in the Arab country, Managing Director Rafic Fakih said. It will convert all its delivery trucks to biodiesel as part of the program. Fakih and Feilder declined to estimate the venture’s cost or the savings they expected it to generate.

The U.A.E., home to about 7 percent of the world’s oil supply, has invested heavily in clean-energy technology as it seeks to diversify its economy away from crude hydrocarbons.

Risk analysts Maplecroft rated the U.A.E. last year as the country most likely to face pressure to reduce greenhouse gas emissions, ahead of nations with larger populations including the U.S. and Australia. The nation’s overall emissions from the burning of fossil fuels rose by a quarter from 2006 to 2008, the analysts, with headquarters in Bath, U.K., said on Nov. 17.

To contact the reporter on this story: Vivian Salama in Abu Dhabi at vsalama@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.

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