6 October 1995

Duty clobbers biodiesel

EXCISE duty is to be applied to UK biodiesel from Dec 1.

It will add 30p/litre to the price of biodiesel. According to biodiesel entrepreneurs in the north-east that will effectively price it out of the market and plunge the emerging British industry into more uncertainty.

EU rules mean duty must be applied by Customs and Excise before the government can grant a derogation. But the timing means a derogation in the chancellors November budget is unlikely, said the chairman of the North East Durham biodiesel working group, Co Durham farmer John Seymour.

Mr Seymour is working with British Biodiesel, a consortium of chemical, farming and seed companies.

It is producing biodiesel using a Middlesbrough chemical company, Chemoxy International. He is angry that government is continuing to leave the industry in limbo.

Mr Seymour said the company can produce rape methyl ester at 45-47p/litre from industrial rapeseed costing £122/t. Adding VAT and distribution costs increases the price to 55p/litre. Excise duty will add a further 30p, bringing the price to 85p/litre compared with an average price for Derv of 52.5p. &#42