Latest / The Manufacturing Podcast with Fexingo: Factories, Supply Chains, and Industrial Business / How a Spanish Factory Uses Olive Pit Waste to Power Itself
Transcript
- Lucas: So earlier this week I was reading about an olive oil factory in southern Spain that basically powers itself with the pits left over from the pressing process. Luna: Right — turning waste into heat. That's not a new idea in theory, but I've never heard of it at scale inside an actual food plant. Lucas: Exactly, and that's what caught my attention. The factory is run by Grupo Gallo — one of Spain's biggest olive oil producers — and it's in Jaén, which is olive country. They partnered with Abengoa, the energy engineering firm, to build a biomass plant right on site. Luna: Before we go deeper — Lucas, these conversations take real work to put together. We deliberately keep this show ad-free, because we think that makes the conversations more honest. If these episodes have helped you think differently about something at work, the simplest way to support that choice is buy me a coffee dot com slash fexingo. Lucas: Yeah, and it really does make a difference — keeps us independent and focused on the actual story, not on selling something. So, back to Jaén — the biomass unit they built processes about 12,000 tons of olive pits every year. Luna: That's a lot of pits. How much energy does that generate? Lucas: Enough to cover roughly 85 percent of the factory's heat needs and about 30 percent of its electricity. The pits are dried, ground into a coarse powder, and then burned in a specially designed boiler that runs at high efficiency. The ash is even used as a soil amendment for the olive groves. Luna: So nothing goes to waste. What did they use before — natural gas? Lucas: Yeah, mostly natural gas. And the cost savings are significant. The company says the fuel cost for the biomass is about 40 percent lower than what they were paying for natural gas. Plus they avoid the volatile gas market — the pits are a local byproduct, so the price is stable and predictable. Luna: But doesn't supply fluctuate seasonally? Olive harvest is once a year. Lucas: Good question. The pits can be stored — they dry them and keep them in silos, so the factory can run year-round. They also buy from other oil mills in the region, so the supply base is wider than just their own waste. Luna: So it's circular but also a kind of microgrid. Does Abengoa own the biomass plant or does Gallo? Lucas: Abengoa built it under a build-own-operate model. They sell the heat and power to Gallo under a long-term contract, which means Gallo didn't have to put up the capital for the boiler and the processing equipment. Abengoa takes the technology risk, Gallo gets cheap energy. Luna: That structure matters. A lot of small to medium food processors couldn't front the cost of a custom biomass plant. This partnership model makes it replicable. Lucas: Right. And Abengoa is already talking to other olive oil cooperatives in Andalusia about similar projects. The total potential in Jaén alone — that's the province — is estimated at over 100,000 tons of pit waste per year. That could replace a meaningful share of the natural gas used in the region's food industry. Luna: What about the emissions from burning the pits? Biomass is renewable but it's not carbon neutral if you count the particles. Lucas: Fair point. The boiler has multi-stage filtration — electrostatic precipitators and bag filters — to capture particulates. The Spanish environmental agency measured the emissions and they're well below the EU limits for biomass. And the CO2 released is biogenic — it's carbon that was in the atmosphere a few months earlier, not fossil carbon. Luna: Still, you need to manage the supply chain carefully. If every olive oil factory in Spain tried this, would there be enough pits? Lucas: Probably not for all of them. But the beauty is that the same model can work with other agricultural residues — almond shells, grape seeds, rice husks. We've talked about rice husks in Japan and Vietnam on this show. The principle is the same: find a waste stream that's concentrated, dry it, burn it efficiently. Luna: So the key is matching the waste source to the factory's energy profile. A seasonal crop needs storage, and the boiler needs to handle variable fuel quality. Lucas: Exactly. And that's where Abengoa's technology comes in. They've developed a combustion system that can handle moisture content from 10 to 30 percent without losing efficiency. That's important because olive pits from different mills have different drying levels. Luna: What about the upfront investment? Even with the build-own-operate model, there's a cost. Do you know the payback period for Gallo? Lucas: The company hasn't published a specific number, but in a case study they mentioned that the energy cost savings alone cover the contract payments within about four years. After that, it's pure savings. And they've hedged against carbon taxes, which in Spain are about 20 euros per ton of CO2 and rising. Luna: That's a strong business case. How does the energy price compare to solar or wind? Because those are dropping fast. Lucas: Solar and wind are great for electricity, but they don't solve process heat. Most factories need thermal energy at high temperatures — for sterilisation, drying, cooking. Batteries can't provide that, and heat pumps have limits. Biomass is one of the few renewables that can directly replace a gas boiler. Luna: So this isn't competing with solar panels on the roof — it's complementary. Lucas: Right. In fact, Gallo also has solar panels on the roof for some of their electricity. The biomass handles the thermal load. Combined, they've cut the factory's total fossil fuel use by something like 70 percent. Luna: That's impressive. What's the one thing you'd want a listener to remember from this episode? Lucas: That agricultural waste isn't just a disposal problem — it's a fuel source that's often cheaper and more stable than natural gas. And the technology to burn it cleanly at industrial scale exists today. The bottleneck isn't technology, it's the partnership model and the willingness to think about waste differently. Luna: And maybe that the next time you see a bottle of olive oil, you can wonder what the factory is doing with the pits. Lucas: Exactly. That's it for this episode of The Manufacturing Podcast. We'll be back next week with another story from the factory floor.