A university project into closed loop systems led Bio-bean co-founder Arthur Kay to set up a business that takes waste coffee grounds and turns it into biofuels. Andrea Lockerbie lines up for a latte
People in the UK clearly love a cup of coffee - the coffee shop market alone is predicted to grow 4.5% a year over the next five years and exceed 20,500 outlets by 2018. And with the rise in consumption of coffee comes the waste created when it is produced. It is a waste stream that has, until now, generally found its way into the general disposal route, or possibly an alternative like composting or anaerobic digestion, along with other organic waste.
But new company Bio-bean, which recycles waste coffee grounds into both biodiesel and biomass pellets, used to power transport and buildings, is hoping to change the current status quo. It is a neat, closed-loop idea, and can already count London Mayor Boris Johnson as a fan. He has described it as “absolutely full of beans” and loves the concept of a coffee-powered London bus.
About 18 months ago, co-founder and chief executive Arthur Kay came up with the idea for Bio-bean when he was studying architecture at university. He was looking into designing closed loop systems and how a building’s waste could be used to generate its power, and happened to be designing a coffee shop and roasting facility. As he looked into it further, he found that, by combining three bits of technology, which Bio-bean now has the patent for, he had the seed for the Bio-bean business, and got some initial funding from the Greater London Authority to take the idea on and set up the company.
According to Bio-bean, London’s coffee industry currently produces more than 200,000 tonnes of waste coffee grounds a year. The company has identified three main sources of coffee waste it plans to tap into:
- retail coffee outlets, such as high street chains and independent coffee shops;
- instant coffee production sites, which Kay explains produce “an absolutely massive amount of waste from a handful of sources” so making it both economically and environmentally advantageous to collect from; and
- what he calls ‘coffee waste aggregators’, such as shopping centres, airports and train operators, who manage their waste under a single contract, making it easier to extract large amounts of coffee waste from in one collection.
In essence, Bio-bean wants to encourage waste producers to separate their coffee grounds and extract that waste stream for processing. This offers a collection cost saving for the waste producer and a tipping fee saving for the waste contractor.
Intercepting the coffee waste and diverting it to Bio-bean’s plant involves the company working closely with waste management contractors. Bio-bean has no plans to have its own collection vehicles, so partnership with third party collection services is crucial.
This is something Kay is keen to stress, particularly that Bio-bean would complement rather than compete with existing contractual arrangements. He explains: “People assume it is going to be competing directly with them and they would rather maintain the contract. We are not looking to engage in a contractual basis, we are simply looking to extract that very specific waste stream.”
He adds: “We can essentially offer both the waste disposal of the coffee grounds, i.e. give [the coffee waste producer] significant savings on its waste -and the collection partner a significant cost reduction in its service because we offer a significantly reduced gate fee for this.”
Bio-bean charges a collection fee, but it does not charge a gate fee: “So it is a zero-gate fee solution compared with sending it for incineration, landfill, composting or whatever it happens to be. For big contracts, both instant coffee producers and retail outlets, [our model] results in overall waste management cost savings of sometimes up to 75%.”
Kay realises that communicating where the benefits are and what the savings would look like over the long-term is key. The business will charge based on weight, generally using a skip to collect the waste or bags if there are space restrictions. In central London, for example, it has been using a bag model with waste management company First Mile, as these are more suited to the sources of waste.
“First Mile is doing specific contracts in specific areas of London. But in other areas of the UK and also in other areas of London - for instance with Network Rail’s stations - we are working on a contract at the moment where we can put a skip on-site and collect that skip, which is a solution that works well for them as well us,” he says.
For a waste aggregator source, like Network Rail, all the outlets would separate their coffee waste into bags, with those bags going into the skip for collection either weekly or bi-weekly. A de-bagger at the plant then removes the bags before treating the coffee waste.
But how easy would it be to get coffee outlets to separate out their coffee grounds? Kay says in trials to date, Bio-bean has found that outlets were generally already separating out their coffee waste behind the counter, although it was tending to go into the general waste stream.
He adds that about 70% of a coffee shop’s waste comprises grounds, so, on average, shops produce a bag of coffee waste each day.
Currently, Bio-bean has a pilot plant in north London, where it has been operating large scale trials for “a handful of large scale producers of waste”. It will then scale up that facility to about 25,000 tonnes of coffee waste a year.
“We have undertaken a large scale feasibility study as well as taken on the investment to build the facility. We are looking to be up and running for that in Q1 of 2015. All the leg work has been done [and now] it is more about simply implementing it,” Kay explains.
“The reason this is economic at this scale is because you are producing two fuel products from a single waste stream. You are extracting the oil and turning that into biodiesel and then you are turning the waste from that process into a biomass pellet that can be used for powering that building system.”
The biodiesel, which can be used in any form of diesel engine, will offer about a 10% saving on conventional fuel; while the biomass pellets, which can be used in biomass boilers, will also be competitively priced. This fuel would be offered to the waste contractors it works with, as well as high street chains or instant coffee producers, so that they are able to close the loop on waste.
Kay stresses that there is no ‘one size fits all’ solution, so Bio-bean might work in partnership with a single waste management provider, it might contract directly with a waste producer or even subcontract out if the waste producer wanted a single partner for all of its waste.
The uptake “has been pretty phenomenal to date” according to Kay, with the business “working up contracts for most of the high street chains at the moment”. He believes that there is an appetite for something of this nature from coffee waste producers, looking to gain value from their waste and close the loop. On top of that, he believes the economic benefits over large contracts with some of the big chains could result in savings of £10,000-£100,000 a year – savings which kick in immediately.
On paper the case for Bio-bean looks compelling. If London proves successful, Kay hopes to replicate it elsewhere, with his sights initially set on other cities in Europe and also the US, where coffee culture is equally ingrained.
HOW BIO-BEAN WORKS
Step 1: waste coffee grounds
London’s coffee grounds and instant coffee factories produce over 200,000 tonnes of coffee waste a year. This is currently incinerated, sent to AD or disposed of in landfill.
Step 2: collected
Bio-bean uses a coffee waste recycling infrastructure to collect the waste and transport it to its local processing plant.
Step 3: recycled into biofuel
Bio-bean uses an innovative, patented technique to process this coffee waste into two advanced biofuel products: biomass pellets and biodiesel.
Step 4: powering London
Bio-bean sells its advanced biofuels to London’s businesses, where it is used for powering buildings and transport. Its fuels are highly calorific and 100% carbon neutral, providing a cheap, clean, locally-produced alternative to conventional fuels.