24 July 2002

Government is the key to new biodiesel plant

By Andrew Swallow

PLANS are afoot to build Europes biggest biodiesel plant in the UK. However, nothing will happen unless the government recognises the environmental and economic benefits such an industry will bring and cuts the duty rate to parity with liquefied petroleum gas and compressed natural gas, warn campaigners.

That was the stark message the North East Biodiesel Partnership put to rural affairs minister Alun Michael, MPs and senior civil servants in the House of Commons last week.

"In essence what we are looking to do is build the biggest biodiesel plant in Europe," says Bill Bates, operations director of Biofuels Corporation, part of the partnership.

Given a duty break in the next Budget it would have the first of five planned biodiesel processing plants in operation for harvest 2004. Each would be capable of producing 125,000t/year of biodiesel.

Teessides concentration of chemical industry and deep water port facilities makes it the likely location.

Initially rapeseed would be crushed elsewhere, probably on contract. But once the plants are up and running building a crush facility to serve them is a possibility, says Mr Bates.

In theory, such an increase in local demand could drive prices up, says Grain Cos Gary Bright. However, Farmway chief executive David Laone points out that to secure supply to the biodiesel plants contracts would probably only be offered on a three to five-year term. Some vegetable oil could also be sourced from the world market.

The House of Commons reception was hosted on behalf of the East Durham Biodiesel Group of growers, by John Cummings, MP for Easington, Co Durham.

He is convinced that as more MPs become aware of the advantages and values of the green fuel, government will introduce policies to establish a domestic biodiesel industry. "I truly believe it is inevitable," he says.

East Durham Biodiesel Group and the North East Biodiesel Partnership say the only policy that is needed is a reduction in duty on biodiesel to parity with LPG and CNG.

Group chairman and farmer John Seymour believes a proportion of funds pledged to DEFRA in the Chancellors budgetary statement last week should be dedicated in that way (News, July 19).

"Our remit as farmers would be simply to provide the feed stock. But to have another market for rapeseed would be tremendous. The more markets we can get the better."

North East Biodiesel Partnership also includes fuel distribution and marketing company Petroplus, which plans to market a 5% biodiesel blend. Chemicals company Haltermann, Teesside Chemical Initiative and Terra Nitrogen are also involved. &#42

&#8226 Grower, processor and retailer consortium.

&#8226 Factory plans for Teesside.

&#8226 Could deliver 5% blend by 2004.

&#8226 Duty cut all that is needed.

New markets for British oilseed rape beckon – but only if government drops biodiesel duty to parity with favoured fossil fuels LPG and CNG.