Are we better off using
more fossil fuel? No
World Energy has solidified
its standing as the second
largest biodiesel producer
in North America by
looking ahead and
changing with the times.
“I have been in many different
businesses over the last 20 years,” said
founder and CEO Gene Gebolys. The
company got its start in Quincy, MA, in
1998 when he purchased the biodiesel
division of Twin River Technologies
on maxed-out credit cards. World
Energy now operates
seven manufacturing
facilities, including
recent purchases of
a renewable diesel
facility in California and
two biodiesel plants in
Ontario, Canada.
The company’s
journey mirrors the
evolution of the
biodiesel industry.
“When we started there
was no market, so half
the first decade was
spent not only creating
a market but creating a
reason for there to be a
market,” he explained.
“The biggest thing in
the early development
of the industry was
trying to sell biodiesel
to fuel suppliers so
that they would deliver
it to their fleets. Not
surprisingly, none of
them wanted to buy
it, so we had to go and
sell it to the fleets and
then buy what the fuel dealers supplied,
which was hauling and input and then
sell downstream to fleets.”
World Energy was acquiring end-use
customers and serving them from a
network of distribution outlets around
the country. “We were very focused on
a direct customer interface and getting
folks that had never heard of biodiesel to
specify it in their fuel requirements.”
The arrival of the biodiesel tax credit in
2005 ushered in a new market dynamic.
“The tax credit gave us a competitive
advantage in Europe, so the business
became one of international trade,”
Gebolys said. “Then once the Renewable
Fuel Standard (RFS) was phased in around
2010, we had a standard-driven market
for the first time. This showed promise
that manufacturing of biodiesel would
be required. It was in the transition in
2008 and 2009 that we started to lay
the groundwork for what we now are,
and we continue to transition today. We
are kind of coming full circle, where the
downstream distribution and delivery all
the way into fleet applications are again
emerging as key components of success
in this business.”
World Energy has learned to cope
with the idiosyncrasies of biodiesel
financing. “Because of the risk profile in
this relatively complicated industry, it
may be better suited to nontraditional,
higher-risk capital rather than more
mature capital,” he said. “This is a very
difficult industry to explain to a financier.
With the uncertainty around the tax
credit, many traditional financiers run
for the hills. If we had more predictable,
projectable growth, you would start to
see more and more capital coming in
to the space, and with that the cost of
capital would get cheaper and cheaper.”
The financial challenges make it hard
to put together an efficient operation
that extends from manufacturing to
distribution, Gebolys said. “On the one
hand, it’s a serious obstacle, but on
the other hand it’s a real opportunity.
If you are able to put together higher-risk,
higher-reward capital, you can get
to scale and efficiency that are hard to
achieve otherwise.” He noted that most
of World Energy’s manufacturing facilities
are acquisitions that were built by others.
Producer
Gene Gebolys
CEO, World Energy
34 Biodiesel Success Stories