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Crude business

(Global Times)

11:07, October 10, 2011

"I really regret it. Had I known I was going to be sent to prison, I would have never produced the recycled cooking oil," said Liu Liguo, in tears after being arrested.

As part of a nationwide crackdown, Liu, the owner of the Jinan Green Bio-Energy Company, along with 31 other people, was detained by the Ministry of Public Security two weeks ago. More than 100 tons of illegal cooking oil were seized in 14 provinces, including Zhejiang, Shandong and Henan.

The crackdown started in July of this year and so far it has been the biggest campaign ever against the recycled cooking oil industry.

Recycled cooking oil, otherwise known as "gutter oil," is made from discarded cooking oil and kitchen waste, and then later recycled and used at restaurants and other public eateries, such as cafeterias and canteens.

Police revealed that difficulties in acquiring evidence pertaining to the manufacturing and use of illegal cooking oil have made it hard for them to uphold the law.

"The gathering, selling and production of gutter oil is trans-provincial," said Hong Jufeng, a police official with Ninghai county in Ningbo, Zhejiang Province.

In Liu's case, the seized cooking oil was purchased in Zhejiang Province, produced in Shandong Province, and then later sold in the provinces of Henan and Shaanxi.

Growing industry

In fact, the recent campaign exposing the illegal cooking oil industry has only been the tip of the iceberg. "In Pingyin county, where the Green Bio-Energy Company is located, there are at least four similar companies, some operating at a larger scale," said Hong.

Hong added that several biological high-tech companies and oil processing plants are also involved in the growing illegal industry.

As a result of large profits, the business of refining discarded cooking oil started around 2000 in Pingyin county.

"Larger companies can produce 120 tons daily, earning 200 million yuan ($31.37 million) a year," Liu said. However, his company is much smaller, and only produced around 30 tons a day.

There are many similar companies within a 200-kilometer radius of Ping-yin, Liu later confessed.

"Several companies also use chicken fat and duck fat to produce the cooking oil," Liu admitted, which is against the law in China.

Massive profits

Even though China has launched thorough campaigns to crack down on the recycling of cooking oil, more companies are still willing to take the risk to produce it because the profit margin is so big.

Gathering and selling drainage oil and then recycling it as fresh cooking oil has become a lucrative industry since cooking oil prices surged between 2007 and 2008, according to a Xinhua report.

The market price for one ton of gutter oil is 3,000 yuan ($439), which is only half of the cooking oil market price, China Youth Daily reported.

In one case, Yuan Yi, who sells recycled cooking oil, has earned a fortune. She owns three luxury cars, including a Land Rover, and several villas.

"The use of gutter oil puts the public's health in jeopardy because it may contain heavy metals, waste antibiotics, or aflatoxins, which are highly toxic substances that can cause cancer," Huang Fenghong, a deputy director of the Oil Crops Research Institute at the Chinese Academy of Agricultural Sciences, told the Global Times.

Huang noted it is difficult to distinguish between recycled oil and fresh cooking oil through its smell and color alone.

He Dongping, a professor at Wuhan Polytechnic University, said the Chinese population annually consumes about 3 million tons of recycled cooking oil a year.
"The best way to solve the problem is for the government to take on the responsibility of recycling kitchen waste, so that it can be stopped at the source," He said.

Several departments, including the food safety bureaus, quality supervision bureaus, and sanitary inspection departments have all played a role in supervising recycled cooking oil."Overlapped duties have created a power vacuum that allows violators to use loopholes to break the law," He told the Global Times.

A plan was drafted last month that required major eating establishments in Beijing to recycle their own waste.

Bu Shicheng, a deputy director of the Legislative Affairs Commission from the Beijing Municipal People's Congress said last Thursday if large restaurants and other eateries deal with their waste appropriately then it may solve the problem of using recycled cooking oil at its source.

However, the proposal has also raised skepticism with some insiders thinking it might be a burden on restaurant owners to purchase recycling equipment in order to remain open.

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